Invisible Brand

argues Anthony Thomson

A few weeks ago I took part in a Financial Services Forum involving senior marketing practitioners and academics, to consider some of the branding issues facing Financial Services in the ‘new’ e-commerce environment.

Reflecting on the debate afterwards, I got a strange sense of déjà vu.

It occurred to me that successful e-commerce is not so much about inventing a new marketing paradigm, but about reapplying the very principles that made the industry so successful in the very beginning.

Let me share some thoughts on the subject with you.

In the past, many of today’s leading financial services companies, including banks, building societies and life assurers, grew out of the notion of mutual interest.

Friendly societies, building societies and mutual life companies were the norm, rather than the exception they are today. In both an emotional and a ‘real’ sense, it was true to say that customers owned these companies.

Furthermore, most of the early financial services companies served specific communities. Banks and building societies served regional communities; friendly societies and life assurers often served specific trades or professions (Clerical Medical is a good example).

Companies knew their customers and their needs, and the customers appreciated this understanding.

Now, most of this has gone. Market conditions, commercial imperatives and, to some extent, corporate egos have determined that the majority of mutual businesses have either de-mutualised or been acquired. Growth, mergers and acquisitions have largely removed the differentiation that provided affinity between the companies and the customers who comprised their communities. Research shows how today’s consumers view financial institutions as ‘faceless’.

Contrast this with what’s going on in the world of e-commerce.

Many of todays’ successful e-commerce sites are based exactly upon the concept of mutuality. Take Letsbuyit.com. The principle on which it is founded is that of like-minded individuals ‘clubbing together’ to drive down prices for their mutual benefit.

Look at successful on-line communities, such as Vavo for the retired and pre-retired, where people come together with a common interest and share information about themselves openly.

Where traditional companies are concentrating on a kind of ‘customer relationship management’ which, roughly translated, means ‘find out what they want so we can sell them more of it’, e-commerce companies take a different approach. Through chatrooms and bulletin boards they encourage customers to say anything that comes into their heads about what they like and don’t like, providing not only feedback to the company but also a reason to visit the site.

And some dotcoms, extending these themes of mutuality to their logical conclusion, are either selling or in some cases even giving away their equity to their customers and community members, so that they become owners of the business as well as participants in it.

What is going on here? It seems clear that the facility for the internet to generate (or re-generate) communities has struck a chord with a very large proportion of the people who use the web. It also seems clear that those businesses who fully understand this and pro-actively facilitate it (rather than simply pay lip-service to it) are more likely to be winners in the new economy. In short, e-commerce could lead to a return to mutuality for the financial services industry.

Maybe e-commerce does require a new marketing paradigm. Or maybe we can learn more from our history than we might have first thought.