Ep. 30 – Three Strategies any Business can Adopt from Challenger Banks, How BODYARMOR Overtook Powerade, and Banks Activating on Twitch?
🌐Traditional, incumbent banks are facing a tidal wave of challengers in their industry. Technology and regulation have lowered the barrier to entry for new products, and the shifting landscape of culture and attention has created an opportunity to build banking brands that people truly care about. Challenger banks still have a long way to go to capture meaningful market share from the incumbents, but it’s clear they’re winning the hearts and mindshare game.
Before diving into what these challenger marketers do differently, it’s important to remember that the best marketing is a great product. Many challenger banks are growing quickly because they offer a superior product and user experience. But a great product alone does not drive hyper-growth; a great product paired with a great brand and great marketing does. Challenger banks match their product innovation with marketing innovation, deploying an entirely different go-to-market model than the banks they challenge.
Part of the reason challenger banks have more effective and efficient marketing is because they are unburdened by legacy systems and culture that slows them down and stifles innovation. But if you boil down what these challengers are doing, it turns out the principles and practices can be applied to any business, no matter the size. You don’t need to be a start-up to be a challenger.
Here are the three most important strategies any business can take from challenger banks to help them grow faster:
1. Build purpose-led brands
Being purpose-led isn’t just about having a brand strategy. It’s about bringing a brand to life internally and externally through the stories you tell and the actions you take.The most successful brands are those with a clear, consistent brand purpose that comes from who they are already. These companies do not need a big, fancy creative agency to come up with an ‘out of the box’ purpose for their brand; their purpose is already evidenced in who they are, what they believe, and how they act. In other words, their purpose is not dictated by a marketing campaign, it exists within the business and flows outward into the messaging. Finding a company’s purpose is an act of excavating what’s already there, not constructing something new.
A homegrown, all-natural brand purpose leads to marketing that’s more authentic and impactful – the business can walk the talk of the brand. You’ll be able to more naturally and sustainably act on the purpose you claim to promote. The word “act” is used intentionally. It’s not enough to talk about your purpose, you need to live it. Most companies don’t and miss out on a huge opportunity to connect with consumers. Havas Group found that 75% of brands could disappear tomorrow and people wouldn’t care. If your brand has an impact on the things consumers care about, they will care about you. Challenger banks deliver on their purpose and have an impact on the conversation or cause they believe in. Varo Bank’s tagline is “A bank for all of us.” Sure, that sounds great, and maybe your tagline does too. But Varo’s is great, once you see how much they’re actually doing in the real world to make it happen.
How much of an impact is your brand having on what you say you stand for? Make sure there’s no gap between what you promise and what you deliver.
2. Be obsessively customer-centric
Being customer-centric is one of those things that every financial institution talks about but very few do well. As a cohort, challengers are very good at being customer-centric in how they think and act in their marketing mindset and model. Habito is a great example. If you take a look at the U.K. company’s “about us” page, you’ll see their entire story speaks to fixing the pain points of the average mortgage customer (putting an end to “mortgage hell”). Their purpose becomes their branding: their messaging rings true to the consumer – because it is! – and consumer trust is gained and maintained. Good marketing in any organization is about putting the customer at the center of what you do an why you do it, but many organizations lose that focus as their brand and business scales.
No matter the size of your business, get back to basics — put the customer at the center of everything you do. This may manifest as more of a cultural change than an operational one, but it has enormous ramifications in all parts of the business. Weave this into the day to day by making the customer the start and end of any conversation you have internally by finding fun and engaging rituals to remind people to focus on the customer. You could start a monthly session with your marketing team where you step into your customer’s shoes in order to experience your brand and business through their eyes. Click around on your website, search for relevant terms, watch and listen to your content, go through the buying process for your product, poke around on your app. Or you could take a page from the Amazon playbook and always leave an extra chair in every meeting to represent the customer.
3. Focus on insights, not data
Data is the new oil, right? Let’s dig into that analogy…For most things, the oil itself actually isn’t useful: it’s the raw material that then has to be converted into the fuel we need to power our cars and homes. Data is only useful once it has been converted into insights. Every CMO in the world is thinking about how to collect and surface as much data as possible. Challenger CMOs are focused on collecting and surfacing the right data to deliver the insights needed to understand and influence their audience. Challengers aren’t data-driven, they’re insights-driven through data.The best brands and marketing campaigns are always ones that are based on a profound, relevant and differentiated insight. Challenger banks are great at finding these insights in the data and using them to shape their brand-building and business growth initiatives. Part of their advantage in this area stems from the communities they build around their brands. Their marketing teams spend time listening and interacting with customers, mining insights that can be harvested into product or marketing improvements.
Monzo is a challenger brand that best exemplifies this principle. From the very beginning, they’ve had community.monzo.com – where customers can get help, interact with the business and each other, and (most importantly) post feedback and ideas. The insights from that community have directly led to a better product, more purposeful marketing, and customer advocacy.
Think about how you can get more insight from the data you have, think about how your team can spend more time listening to your customers. One of our favorite hacks for this principle is to start asking, “where’s the insight?” whenever someone comes to you with a new idea or initiative (bonus points if you channel Wendy’s Where’s the Beef ad when you do). Sure it’s a bit gimmicky, but it will remind your team (and you) what you’re really after: meaningful insights.
If you’re in the financial services world, you’re probably already aware of some of these strategies and tactics challenger banks are using. But have really thought about how you can apply them to your own business? And if you’re not in FS, there’s no reason you can’t do the same. Innovation in one industry is almost always applicable to innovation in another industry if you dig down to the core insight, philosophy, and practice that’s driving it.