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Stuart Lang, Founder and Creative Director of We Launch, shares his insight on brand convergence with Finance Monthly.

In the world of finance, the convergence of two institutions – outside of an M&A - is uncommon. Beyond this, we rarely see two financial brands come together for a common cause. However, when it does happen, it’s critical that they present a clear and unified proposition if they are to achieve success. And the value of that should not be underestimated; the Marketing Accountability Standards Board, whose research from 2018 found that brands contribute an average of 19.5% enterprise value.

Playing your cards right

So how do you successfully unify two brands, without losing the individual equity of each? And how do you present it to prospective investors and convince them to trust the new brand the way they did the old?

Therein lies the biggest challenge.

Different firms have different histories. Different people. Different clients and case studies. They probably have different messaging and imagery styles. And sometimes – different cultures.

Taking advantage of each distinction and bringing them together harmoniously can be a tricky task to comprehend. Brand Value as a monetary value consists of a number of interconnected factors - everything from financial forecast to brand strength and the role that brand plays in the day-to-day business.

The first step towards brand unification is deciphering what makes each business unique and how (or why) to dial up that essence in a unified proposition. After that, sitting down with stakeholders - both internal and external - and pinpointing their motivations is key.

The first step towards brand unification is deciphering what makes each business unique and how (or why) to dial up that essence in a unified proposition.

As well as knowledge of your competition through detailed auditing, which can also help clarify what sets your brand apart from others, whether it be positive or negative.

This depth of understanding will then inform which qualities to amplify and which to put to one side. In a game of Top Trumps, the victor is the one who knows which card to play in order to win a hand. The same thinking applies here. Identify the strongest individual criteria for each brand and take advantage of it. Whether it be the seniority of relationships, calibre of past deals, global reach, or the strength of the existing brand, choosing the right qualities and combining them strategically will help improve your odds of success.

Being as clear and frank in what you want to achieve with such a proposal is the number one goal. Your new brand's visual language needs to present a unified and clear value proposition, running a thread through all of your communication channels as a joint business.

A recent study from RedhouseBrand, analysing 25 financial sector brands, found that clarity in messaging was a key value for these brands to pursue. Being open and honest with what your brands are and what the new venture is really trying to achieve will go a long way to making it legitimate in the eyes of any new or existing stakeholders.

Nevertheless, sometimes that means making a considerable change - which can be difficult. Taking a risk can be the quickest way to stand out in a cluttered market however, and businesses shouldn’t be afraid to embrace that. Finance is about taking risks and if it means building a bigger and better brand together then it's most likely the best option to consider.

Considering the right people for the job 

It is also worth considering who you bring in to collaborate with you on crafting a fresh approach. A brand is a valuable business asset, and whilst risk of change does offer the opportunity to win big, it’s much more reassuring when that risk is calculated and in the hands of experts.

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If you do bring in branding experts, make sure to fully immerse them in your world and be honest with them about your ambitions. This means putting them in front of stakeholders, your investors and letting them reach out to clients. The more information they have on why you are doing this and how the brands are currently working as independent entities, the more likely they are to implement the changes needed.

This fine balancing act was exactly what M&A advisory firm JEGI CLARITY’s refresh as a single, unified brand faced. Two singular entities with proven track records in their respective markets, they needed to align themselves with potential investors who had no prior knowledge of them. Working closely with their leadership teams and forming a strong understanding of both businesses in their own right helped us translate the qualities that made them successful into a seamlessly unified brand proposition.

It was crucial this was maintained not just at a macro level but threaded through all communication materials – whether big or small. If all brand materials, from messaging to imagery to the website and social, can sing to one another then they can better emphasise the objective of the joint mission.

Seizing the opportunity to unite

The 2019 edition of Brand Finance’s GIFT report stated that intangible assets - such as your brand identity - account for 48% of overall enterprise value, so time is always of the essence. Putting any kind of brand reinvention, whether through necessity or not, on the back burner is always going to be the wrong thing to do. It is always worth remembering that your competitor is probably already hard at work on a new look or campaign to communicate their offering. So not putting the attention into yours now, could mean that you are pushed down the pecking order before you even have a chance to start.

Being ahead of the crowd is the best way to make the biggest impact and show that your value proposition is the best around. Acting decisively is far better than remaining static – because those that sit still run the risk of being overtaken by others.

eCommerce is booming and it looks like it’s here to stay, with some 24 million sites across the globe selling an array of products and services. There are many factors that have led to this phenomenon — from ubiquitous connectivity to the ease of building a website, right through to the millennial desire for more flexible, remote working arrangements. Plus, there's the added attraction of being your own boss from the outset. There is no doubt that the future is looking rosy for e-commerce. Nasdaq research indicates that by the year 2040, around 95% of all purchases will be online. The question isn’t if or when, but how to open an e-commerce business that can grant you the biggest gains for your investment. Below, Karoline Gore shares her advice with Finance Monthly.

B2C or B2B?

The two most common e-commerce business categories are B2C (companies selling items to individual consumers) and B2B (those selling to other businesses). Each has its upsides and downsides. For instance, practically anyone with an enterprising mind and a good business plan can set up a B2C business, since you can keep costs and production low until demand deems it is time to step up your game (and your investment). On the other hand, competition is high in this industry and your team has to be solid (and big) enough to answer questions quickly, deal with customer complaints, and the like. With B2B, orders are likely to be large but may be less frequent. B2B also imposes a stronger pressure on companies to lower profit, since other companies will undoubtedly aim to attract your clients with more attractive prices.

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Thinking Out of the Box

If you have a product that is in high demand or you find a niche market for something you are selling, it is key to utilise a model that will boost customer loyalty so you can have a sustained income while thinking of how to expand or broaden your target. One that is working quite well is subscription boxes. Within a period of just four years, this market expanded by an impressive 890%. If you are thinking of launching a subscription company, ask yourself if you can deliver goods on time, do so regularly, and include something that gives your clients real value. This could be an item that is difficult to access (such as a designer or bespoke piece), a discounted item, or a new product to discover. When calculating costs, don’t just think of the goods and packaging. but also of those involved in website and brand design, web hosting, and incorporation fees.

What Companies are Achieving Success?

Some of the most successful e-commerce businesses to date are following one of a select group of models, including dropshipping. Many startups choose to work with this model via Amazon, but competition in this marketplace is tough. It might be a better idea to use a platform like SaleHoo, Spocket, or Oberlo. The latter, for instance, will allow you to see how many page views, sales, and star rankings items have. Other successful models include private labelling (you order the product you develop from a manufacturer then brand, develop and sell it); and wholesaling (to private customers and other businesses). The model you ultimately choose depends on your target market, the nature of your product, your budget, and your short- and long-term goals.

Some of the most successful e-commerce businesses to date are following one of a select group of models, including dropshipping.

Finding Inspiration

Top e-commerce companies that started small may provide you with the inspiration you need. Take a model as seemingly simple but brilliant like Beer Cartel — a craft beer service that introduces urbanites to unique bottles from all over the world. See how sustainability and profitability can work hand in hand in companies like Bundle Baby, which makes eco baby diapers in the cutest colors and prints imaginable. Think of how the founders of Bella Bean Organics used their own farm-made products to enlighten gourmets on everything from homemade pasta to flavor-packed tomato sauce or traditional toffee treats.

The market for e-commerce is so wide that making your mark on it will involve research, vision, and commitment. Do your research before starting, so as to identify market and demand. Opt for a model that is going strong. Finally, put love and care into every aspect of your business, including your branding, social media, and packaging.

Gen Z (age 4-24) represent a fundamental break with every generation in human history – they've never lived in a non-digital world. Their attitudes are different to older generations, giving us a sneak peek into the future of human behaviours. Motie Bring, General Manager for Global eCommerce at Worldpay Merchant Solutions,

Gen Z’s stature, spending power and influence will grow as they enter the workforce and their predecessors head into retirement. As the generation whose behaviours will reshape commerce over decades to come, their importance to global retailers cannot be ignored.

Organisations need to implement both immediate and long-term strategies that ensure they’re being heard, with attention to three key areas.

Be Personal and Authentic

Rapid urbanisation, population growth, and the rise of mobile and online commerce has fundamentally changed society’s notion of individuality. Shoppers have swapped in-store experiences for the speed and convenience of shopping online. But, more recently, we are seeing Gen Z consumers placing a renewed focus on the individual and rekindling the one-to-one roots of commerce. For this demographic, one size doesn’t fit all: Gen Z are looking for personal experiences that fit their values and lifestyle and keep them excited.

Fused with the data that makes personalisation possible, technology is powering the possibility of one-to-one customer experiences in the digital age. Mass consumer culture doesn’t sit well with a generation that is immersed in individual expression. Retailers are moving away from talking to segments to focusing on people.

According to findings from the newly released Worldpay from FIS 2020 Global Payments Report, 60 percent of Gen Z believe that it is important for brands to value their opinion. 35 percent feel their favourite brand understands them as an individual.

Gen Z have a healthy sense of skepticism and so it is critical for brands to be authentic. Learning how to navigate the world in the era of “fake news” and having their digital lives saturated with messages of questionable quality and authenticity makes Gen Z discerning critics. They recoil from brands that fail to adhere to their values.

According to findings from the newly released Worldpay from FIS 2020 Global Payments Report, 60 percent of Gen Z believe that it is important for brands to value their opinion.

Provide a Mobile Friendly Experience

Brands seeking to earn the favour of Gen Z will need to cater to their payment preferences. Like the generation itself, Gen Z’s payment preferences are more digital, more social and more mobile-focused than any other generation.

Gen Z uses digital services and mobile wallets more frequently than their predecessors. Over half use digital wallets at least once a month, three quarters use a digital payment app from financial service providers and others, while 79 percent use peer-to-peer (P2P) payment apps at least once a month. Digital access in the United Kingdom is very high: internet penetration in the country is one of the highest in the world at 95 percent of the population, according to the Worldpay from FIS 2020 Global Payments Report.

Accepting a range of smartphone-based digital wallets is vital to serve a generation that has largely bypassed using plastic cards as a payment method. Tailoring the right mix of digital wallet acceptance is key. Although globally recognised brands have proportionally large share, digital wallets are resisting homogenization with local and regional alternatives thriving around the world.

Innovate for a Hyper-Connected Generation

Gen Z isn’t instinctively drawn to the same banking, payment and investment tools as their parents’ generation. They want financial products and services that deliver practicality and convenience. Gen Z consumers are also savvier on what companies can deliver, and increasingly expect the same level of experience regardless of whether they are shopping on Amazon, ordering a pizza, or liaising with their financial service provider.

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From peer-to-peer services that are increasingly being accepted for business-to-consumer transactions, to direct debits; from checking to satisfy recurring payment arrangements, to purely digital banking services: Gen Z is ready and eager to engage with cutting edge financial services and payment innovations.

Alternative financing options that emphasise shorter flexibility—such as “buy now pay later” services find themselves fitting with generational need. According to the Worldpay from FIS 2020 Global Payments Report, these trends are on the rise in the United Kingdom: these payments are expected to grow 39 percent annually and are on course to double their global market share by 2023.

Establishing meaningful connections with Gen Z is a long-term approach, but one that requires focused attention. Merchants seeking success must explore how they can formulate and implement strategies with appropriate care, yet with the urgency that Gen Z increasingly expects.

About the Data

Figures quoted are taken from data published in Worldpay from FIS 2020 Global Payments Report unless otherwise stated or referenced. For research methodology, please refer to page 128 of the report.

The novel coronavirus (COVID-19) has had an enormous impact on the world in terms of human health and longevity. It is also impossible to deny the effect COVID-19 is having on the global economy. Many powerful nations, including the UK, have experienced a depreciation in their currency since the first cases of the virus were reported. From an automotive perspective, things may appear very grim at the moment. The closure of auto plants in Europe, North America, and Latin America could result in a reduction in global production by as many as 1.4 million vehicles. In the US, Ford Motors has not had an easy start to the year and on Monday, March 23rd, the company shut down its factories in South Africa, India, Vietnam, and Thailand amidst an increase in COVID-19 cases in these regions. With the company’s shares falling by 38% since the start of the year, consumers can’t help but wonder whether this is a superb buying opportunity in disguise.

Have Faith in the Brand

Although Ford has faced a number of obstacles in recent years mostly thanks to an aging product line in the US and several slip-ups in China, the future does not look entirely bleak for the prominent US company. Even in spite of the uncertainty cast over the industry by COVID-19, there are quite a number of reasons to have at least a degree of confidence in the future of the brand. Not only does Ford continuously rank highly in peer reviews, but it also sports a very moderate debt load that is surprisingly well-structured. The manufacturer also has ample funds at its disposal that will enable it to withstand a slump such as the one we are currently experiencing.

Aging Product Line Set to Get a Youthful Boost

While Ford’s aging product line might have acted as a strong deterrent as far as investments were concerned, new additions to the line will boost the company’s profit margins significantly in the next few years. Toward the end of 2019, Ford released updated versions of some of its best-selling models to date: the Escape and Explorer SUVs. Some of the models set for release this year include the brand-new Bronco Sport, as well as updated versions of the highly-popular F-150 which, to date, has been the company’s golden goose. It is important to note that, starting this year, Ford will only be manufacturing two cars: the 2020 Mustang and the 2020 Ford Fusion. There will be no new models of the Fiesta, Focus, and Taurus released during 2020.

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Hi-Tech Auto Investments Will Start Paying Off in the Near Future

Although COVID-19 may cause a number of delays in the automotive industry, there are set of notable efforts in place that are looking very promising. This includes, but is not limited to, the imminent release of several electric car models including an electric version of the Transit Van and F-150 as well as the Mustang Mach –E sports SUV. These technologically-advanced vehicles are predicted to play a big part in not only enhancing the company’s bottom-line but also repair what has been failing the company.

While a recession is becoming a very real possibility in the US, the fact that Ford is trading at only 6.5 times its expected earnings for the year is making its shares exceedingly fascinating right now. Only time will tell, however,  whether now is the perfect time to invest a good portion of funding into one of the most well-known car brands in the world.

As a company leader, you will be doing everything possible to grow your business, but what is the true impact of good, strong branding, and why is marketing so important? Read on to unearth some of the key financial benefits that you will stand to reap when you decide to improve your brand model.

Increased awareness and revenue

Making more people aware of your brand's existence will stand you in better stead in your attempt to increase your revenue, there's no doubt about that. Fishermen and women cast bigger nets if they need to catch more fish, and you need to make more people aware of your services if you want to draw more customers and turn over a greater profit.

You can increase your brand awareness in a number of different ways. If you have a big marketing fund to tap into, you can go ahead and promote your brand on a plethora of different online mediums. Don't worry if you don't have a lot of cash left in your advertising reserve, though. Having a small marketing fund doesn't need to spell disaster for you in your attempt to increase your brand awareness. It just means that you have to be more strategic in your attempt to ensure that your branding model is easy to remember. Companies such as Monzo and N26 have already made a conscious effort to ensure that their product marketing campaigns are alternate and more memorable than most. Monzo have tapped into the impact color has on the memory by making a bright orange credit card available, while N26 have striven to help their audience 'make a statement' by offering them their patented Metal card.

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It's not just debit cards that can make your brand stand out from the crowd, however. There are a plethora of ways for you to advertise your business in a memorable fashion. You could, for example, print your company name and logo on items that your consumers are likely to use on a day-to-day basis, such as drinking mugs. Going down this route will help your brand to remain at the forefront of your audience's mind, simply because your consumers will come across it whenever they use the product that you have opted to print on.

Decreased price sensitivity

Price sensitivity describes the way in which demand for a product changes based on how the price of said product changes over time. It is the degree to which elasticity in cost impacts customer buying habits. As expected, price hikes generally act as a customer deterrent in this instance. For example, should a barbershop raise its prices by an extra few dollars to cover certain costs, it will be liable to lose customers due to the fact that the same service is available close by… only cheaper.

Sometimes, due to economic inflation or personal financial difficulties, price rises are necessary. With a good branding model in place, however, you will be able to limit the impact price sensitivity has on your ability to draw customers going forward. By branding your business as a leader in its field, people will still feel inclined to bring you their custom despite the fact that your products/services are more expensive than others in your market. Think about it this way, would you shy away from paying an extra dollar for Coca-Cola's original taste when your only other alternative was a store's own version of cola? Chances are, not likely, and so this is important to remember.

Marketing is of great importance to any sector, but each industry has its own pitfalls and problems it needs to avoid when it comes to developing its marketing campaign. If you’re already running a FinTech business, or are planning on starting one, there’s a few obstacles you need to be aware of in order to market your brand effectively.

Below Where the Trade Buys provides the following guide to help you navigate effectively through the world of marketing.

Social media avoidance

Social media can seem like a difficult arena to step into — it’s huge, the competition is astounding, and your customers can speak to you directly, in front of a massive audience. In fact, many sectors have fallen foul to ignoring and avoiding social media. According to Incisive Edge, banks were a prime example of this, citing a report from Carlisle and Gallagher Consulting Group that revealed 87% of consumers perceived social media usage by banks as being dull, irritating, or unhelpful.

But social media is where your audience is, and it’s where many spend a large amount of time. Securion Pay noted that an effective marketing campaign needs to consider Millennials, of who 84% have smartphones and 78% are on them for more than two hours every day. Embrace this and establish a strong presence on social media! Just make sure you have an effective plan for each channel — content for Twitter might not work as well on say, LinkedIn.

Also, social media is a great way to build a rapport with your customer base. Even in the event you get negative feedback, the way you deal with it will be seen just as much as the original comment. You can turn a negative into a positive: show ownership of the feedback and resolve it quickly. If you ignore it, the chances are the unhappy consumer will feel stung that you have ignored their attempt to reach out to your directly and give you a chance to respond. They will turn to other websites to tell other people of this experience. As social media and customer services expert, Jay Baers says: “A lack of response is a response. It’s a response that says, ‘We don’t care about you very much’.”

Saying too much, too soon

Do you have big news? Great! But before you rush off to tell the world, take a moment to pause. Would the news be better used slowly? Incisive Edge advises FinTech companies to consider an embargo if you’re heading to a trade show soon.

Basically, you can still create a press release about your exciting news or innovation plans, but don’t release it immediately. Place an embargo on it, so that your press sources can’t publish the news until a certain date, such as the trade show or another effective date for your company. This not only stirs up a sense of excitement, but it also lets the journalists and content writers have more time to write an engaging and detailed piece.

Ignoring offline

You may feel that as a primarily online company, your marketing strategy needs to have an online focus too. But the world of offline marketing is still going strong, and it’s a great way to build your brand and get it noticed.

For example, Delineo reported on some highly effective FinTech marketing campaigns, including offline print marketing. In the report, a robo-advisory firm was shown to have created a brilliant offline campaign that saw printed adverts placed through the underground tube network. People don’t have great signal on their phones at underground stations, so tend to notice and read printed adverts more!

As a start up, you might not have enough in your marketing budget to pull off such a wide-spread campaign but consider the use of printed media elsewhere. Are you headed to a trade show or exhibition soon? Seek out a provider of PVC banners and get your brand and goals printed up for your stand! Banners are a great tool at exhibitions and tend to be more effective than digital ads at these events, with customers recalling the brand from a banner long after the show has ended.

Ads with poor language use

You should be making use of both online and offline media in your marketing strategy, but you’ll need to make it as powerful as possible. There’s no use having a well-placed digital advert or a beautifully designed banner if the language used is dull and uninspiring.

Often overlooked, the use of language is a complex skill that can make or break your intended message. There’s a reason why so many people study language at high academic levels!

Consider the intended outcome of your marketing. What are you trying to tell the customer? At a basic level, new technology is designed to solve a problem, so tell your audience this. Words like “innovative”, “cutting-edge”, “rapid”, and “simple” can help address technology woes such as slow loading apps or complicated processes. After all, FinTech is a disruptive innovation — tell the world how it’s shaking up the banking and financial sector.

It’s important for your business to stand out for the right reasons. FinTech is a fast-growing sector, so it’s vital that you keep ahead of the game. Keep your marketing strategy strong and wide-reaching with these campaign tips.

Sources: 

https://www.callboxinc.com/b2b-marketing-and-strategy/fintech-marketing-strategy-tips/

https://blog.incisive-edge.com/blog/6-fintech-marketing-strategy-tips

https://www.delineo.com/culture/4-fantastic-fintech-marketing-campaigns/

https://securionpay.com/blog/6-marketing-trends-fintech-industry/

http://www.brightnorth.co.uk/whitepapers/Image_Quality_and_eCommerce.pdf

https://skift.com/2016/05/13/why-the-tourist-brochure-is-still-surviving-in-the-hotel-lobby/

https://www.forbes.com/sites/rogerdooley/2015/09/16/paper-vs-digital/#7de095dc33c3

https://www.pinterest.co.uk/pin/307300374549933402/

https://www.ama.org/partners/content/Pages/6-dos-and-donts-of-promotional-product-marketing.aspx

https://expandedramblings.com/index.php/tripadvisor-statistics/

https://www.prnewswire.com/news-releases/print-ads-in-newspapers-and-magazines-are-the-most-trusted-advertising-channel-when-consumers-are-making-a-purchase-decision-300424912.html

https://www.forbes.com/sites/matthunckler/2017/02/01/jay-baers-top-3-tips-for-acing-customer-service-in-the-age-of-social-media/#1cbbd1764a08

https://www.forbes.com/sites/rogerdooley/2015/09/16/paper-vs-digital/#31d49c533c34

https://blog.techdept.co.uk/2014/12/marketing-technology-words-marketers-need-to-know/

Results from the second quarter of a year-long research study reveal how investors view the performance of a range of different players in the autonomous vehicle (AV) market, providing for each firm, the percentage of investors who judge that company as ranking in the top five for having the most investible Autonomous Vehicle technology.

Manufacturers

In the survey, conducted by international law firm Gowling WLG and economic research agency Explain the Market, Tesla (26%) topped the charts when it comes to investor confidence in AV manufacturers - closely followed by BMW (22%).

IT giants

For the world's biggest IT companies, investors ranked Google (35%) as the business with the highest potential for success in the AVmarket. This is markedly higher than other giant brands which investors feel are yet to make an impact - notably Baidu (2%), Uber (8%) and Apple (11%).

Tech brands

The survey also reveals Bosch (54%), Tata Elixsi (36%) and ParkWhiz (29%) as the most investible tech brands in the AV tech sector, according to UK investors.

Guy Shone, CEO Explain the Market said "When it comes to driverless tech UK investors are showing a deeper level of interest and a stronger commitment than ever before"

Stuart Young, partner and head of Automotive at Gowling WLG said: "When it comes to the AV sector - research shows UK investors are backing innovation from a wide range of sources. UK Investors clearly have confidence in both the old and the new, the big and the small. They are tracking the best ideas and conditions whether they come from start-ups or corporate giants."

Since the survey's Q1 results, there have been some subtle shifts in investor mood regarding the barriers towards widespread AV introduction. Whilst concerns about unclear rules and regulations have slightly diminished, doubts about a lack of collaboration between industry and government appear to be increasing.

The progress of smart cities projects is also an increasingly important factor to investors when it comes to making a decision to invest in the AV market.

As our economy enters a new period of instability, the importance of monitoring investor attitudes increases. This is the second wave of a year-long study of over 1,000 investors. The ongoing tracker study will track the confidence, attitudes and opinions of UK investors to the AV sector and reveal what investors really want as the sector develops. The study will also probe the real barriers and factors that impact confidence.

(Source: Gowling WLG)

In the eyes of multinational financial institutions, fintech innovators have moved from game-changing competitors to crucial allies. Ben Butler, Corporate Partner at national law firm Bond Dickinson gives Finance Monthly a rundown of the current progress between financial services, banks and fintech start-ups.

Customer demands and developments in technology have forced banks to think and act in a new way. In an industry in flux, the benefits for small and large companies of collaboration and building on each other’s strengths are clear.

The difference between well-established financial organisations and their start-up counterparts in many ways couldn’t be starker. The former can struggle to be agile, weighed down by processes and legacy – but they are often bolstered by their size, brand recognition and access to finance. All of which is in much shorter supply for small fintech companies: designed to be nimble, with digital talent at their core, they are at the same time constrained by their youthfulness in the market.

In a period of change and disruption, fintech startups are now key players in the digital transformation strategies of the established giants – and the most innovative amongst them can prove to be valuable partners.

Our new economic study Close Encounters: The power of collaborative innovation found that large financial companies took part in 1,864 such deals with UK SMEs in the last four financial years. £31bn is known to have been invested in these deals between the 2013/14 and 2016/17 tax years. The financial services industry is far ahead of any other sector in the UK.

But what are the five key areas organisations should consider and discuss frankly when entering into such deals?

  1. Motivation 

Beyond the fair arrangement on the financial settlement, it is important to think practically about how differing motivations might play out as the relationship develops. Is one side looking for a quick result, with the other more focused on the long-term benefits of the partnership? Or could it be a defensive move on the part of the larger player in an attempt to remove the product from the hands of competitors – in which case the future may not look so exciting for the SME?

The nature of such deals means that the players in the small organisation will inevitably be focused on making the most from their distinct offering, while the corporate will instead have an eye on delivering against the investment. The most successful alliances nevertheless bring two organisations together that are aiming for a shared outcome, and motivated by the desire for continued innovation.

  1. Culture 

Corporates often struggle to marry the objective of maintaining process-driven behaviours while still encouraging innovative thinking. Working together with a more agile SME might create a greater strain on this, and both parties need to carefully consider what this balance will look like in the new partnership.

The smaller partner will also need to be sure they can cope with the tighter controls that might be demanded of them, and the stricter processes that will likely come from working within a more established structure. Founders are often key for deals, but they should know what their exit route options are, should they find themselves in a less dynamic and rewarding environment.

  1. Brand 

In the wake of the financial crisis, maintaining trust is front and centre of mind for organisations when looking to maintain a positive brand. So it is perhaps unsurprising that one of the biggest concerns arising from such deals is the reputational threats they may bring with them. Both parties need to be upfront from the beginning about a potential need for conformity and a possible loss of independence for the SME as a result.

Attitude to risk can also differ greatly for start-ups, and this can sometimes be incompatible with the compliance restrictions faced by large organisations. Understanding these challenges, some small organisations choose to go through regulation in advance of approaching the banks.

  1. Tax 

At times, objectives can conflict when it comes to optimising tax: the corporate may qualify for Research and Development tax relief from the deal, while the SME shareholders may each be entitled to Entrepreneurs' Relief. In these circumstances, it can be in the interests of the corporate to secure more equity; yet those in the SME may want to hold on to a large enough stake so that they are eligible as individuals for the other scheme. This can be extra challenging when there are lots of shareholders, as the equity has to be spread more thinly.

  1. Exit

Our research highlighted the popularity of minority stake purchases, which accounted for 75% of deals in the industry – three times as many mergers and acquisitions (25%). This may reflect the challenges that can arise from M&As which involve fully integrating systems and processes. Or it may be a sign that financial services firms are becoming savvy to the short-term exit strategies that seem to be ‘of the moment’, and that they are looking for something new – such as the recent trend towards selling rather than listing.

For corporates looking to purchase future value as well as intellectual property, a full acquisition is a less attractive option as a long-term innovation strategy.

However, minority stake purchases won’t always be a suitable answer for the smaller party. To get around such opposing interests, entrepreneurs might want to ensure the earn out is structured around the long-term prospects of the organisation and the future leadership, or perhaps around innovation goals rather than revenue generation.

Data & content management have a visible impact on a business, whether done correctly, in half measures, or not at all, and can have adverse effects on a firm’s reputation, operations, and in the long run, vision. Here Katie Rigby-Brown, VP of global financial services at SDL, discusses the currency of content in a global financial economy.

Arguably in one of the world’s first global industries, financial services organisations are no stranger to the challenges of managing an intercontinental customer base.

However, financial service organisations are now embracing digital revolution in the race to survive against a back-drop of fintech competition, the hangover of reputational damage, and increasing regulatory compliance. Yet this is also presenting new challenges for how firms with a global employee and customer base handle their content.

One thing is certain, whether boutique or behemoth, the need to engage, capture and retain your customers at speed and without compromising data protection, anti-bribery, or corruption law, irrespective of location or language, is now greater than ever before.

Traditionally, financial service organisations have managed their multi-lingual content in one of three ways; using in-house teams, local niche providers or trusted freelancers, or a hybrid of both. A myriad of systems currently exists to create, store and publish content; from managing marketing content and regulatory publications to managing customer information, policy documentation and learning programmes. At best, the sheer volume of options available causes businesses to overspend much needed cash. At worst, irreparable reputational damage is caused and companies receive financial penalties for non-compliance.

Many will know that while this silo model worked historically, it is not a scalable solution for today’s environment. The rate of content production has increased sevenfold and added to increasing regulation, often unique to each country; this model simply isn’t sustainable anymore.

As the industry becomes more digitalised, forward thinking, and interconnected, and at a rate incomprehensible to most, we must ask what this means for business and how to succeed in such an environment.

One way financial service organisations can succeed in this new digital environment is by taking control of their content ecosystem. A piece of content goes on a long, protracted journey, passing through content optimization software many different hands before it reaches its target audience. By having a strong grasp on where all content is and who it is with, from beginning to end, businesses reduce the risk of non-compliance with market or data regulations.

Having a tight grasp on the content ecosystem from end-to-end is critical for organizations who want to avoid fines or reputational damage. When content management is a top priority, the chance of physical or electronic content going missing or falling into the public domain is greatly reduced.

Another crucial way to succeed is to leverage your own existing assets. This is a catch-22 for many companies who may have style guides for some areas but not for others - standardising these can be a challenge, especially when trying to maintain legacy. However, customers today expect companies and brands to communicate to them in a certain tone of voice that still manages to be personable.

The easiest (and cheapest) way to make the most of existing company assets and to take control of brand tone of voice is by maximising the investment that’s already been made. Most companies already have an established tone of voice. But instead of starting from scratch, creating style guides that show how to use that tone of voice in target markets will ensure the hard work already done doesn’t go to waste. This will also help to reduce the chances of being non-market compliant in those territories.

It may sound obvious, but using the right technology for the right use case is essential. A mixture of on premise, saas or hybrid solutions that support your content classification and organisational appetitive for cloud will allow you to respond to the challenges presented by agile fintech competitors, personalising, targeting and protecting your content.

Understanding the challenges that need to be overcome and finding the right technological solution to solve them could be the difference between a successful campaign and a reputational crisis. While financial service organisations are no stranger to dealing with global communities that require different content usually all at the same time, organizations that do not embrace the speed of change will fall foul and ultimately fail. Can your business risk playing fast and loose with data and brand reputation? The likely answer is no – so take action now before it is too late.

Here Jamie Diaferia and Benjamin Thiele-Long of Infinite Global provide Finance Monthly with expert insight on the growing needs of branding and why the right balance of considerations will allow your business’ brand to thrive among the competition.

Last month, Brand Finance published its Global 500 report which saw Lego regain its position as the world’s most powerful brand. But while it’s hard to refute that the ultimate and overriding purpose of building a powerful brand is to make money -- after all the business of business is business -- it raises the question: Why do some brands fare better than others in establishing their brand strength in the market?

Whatever sector a company works in it needs a unique reason to exist, something to set itself apart from competitors. The skill is in how it communicates this reason, and history has given us examples of brands that have failed and those that have succeeded against the odds. When we talk about ‘brand’, we must go beyond the look and feel of the product or offering that a company provides. Instead, brand sits more with the idea of reputation and how this is leveraged to make a company successful.

Firstly, there’s a question to be asked: What is the purpose of a strong brand? For a commercial brand the starting point must always be ‘to make money’. However, when you look at companies like Google, Apple and Walmart, these are companies that are regarded as doing more than simply generating a profit -- they also attract customers, build loyalty and motivate staff.

The enduring strength of Lego’s brand is without doubt linked to both its simplicity and the breadth of its appeal which spans generations and genders, treasured by households for its ability to inspire creativity and nostalgia. What is most interesting about Brand Finance’s research, however, is that Lego scores highly on a wide variety of Brand Strength Index (BSI) measurements including; familiarity, loyalty, promotion, marketing investment, staff satisfaction, price premium and corporate reputation.

The matrix of factors that contribute to the BSI are worth exploring further, as they demonstrate that brand power is not dictated by the size of the organisation but factors such as loyalty and staff satisfaction, which are far more difficult to control and measure.

It’s also interesting to see that brand power is not unique to any particular sector. The top 10 most powerful brands according to Brand Finance’s research, all of which achieve a AAA+ rating on the BSI, spread across a range of sectors including banking, tech, media and professional services. So, it appears that brand strength relies on much more than just generating a large customer following.

Building brand power relies on leadership placing equal importance and resource on internal and external factors and audiences. Lego’s bounce back from near bankruptcy in the early 2000’s is largely attributed to the appointment of Jørgen Vig Knudstorp, a former McKinsey consultant and the first person outside the founding family to run the company when he was appointed CEO in 2004.

Knudstorp was able to stem the bleeding by selling off peripheral businesses such as theme parks and video games, and discontinuing unpopular ranges in turn ensuring that all products were compatible with the core offering both in their look and mechanical compatibility.

Rather than accrediting his revised strategy for Lego’s return to form, Knudstorp attributes the company’s ongoing success to its employees and customers. When asked about turning Lego around, he points out that employee engagement serves as the foundation of the company’s reward system, while customer loyalty gives Lego the chance to serve multiple generations of family members. Prior to the turnaround, Knudstorp noted that Lego had taken this loyalty for granted by stretching the brand too thin. Instead, he wanted Lego to be an irreplaceable but also irresistible brand for children.

The balance, achieved perfectly within Lego, was in rewarding financial value creation with having creative and engaged employees. In Knudstorp’s words, creating a culture where at the end of each year he could stand in front of everyone and say, “thank you for doing all of the things I never asked you to do”.

How is this done? It’s not about control where people are simply doing what they are told, because that simply creates bureaucracy. Instead, it’s about communicating to stakeholders, both internal and external, the reason for doing things, the context. Creating clarity of culture and strategic choice in turn gives clarity of purpose, i.e. Why do I want to do a good job?

Brands can spend a fortune on communicating their message and values to customers, in the hope it brings them to their doors. The value of selling a brand promise, rather than simply the product, to consumers has long been understood. Increasingly, there is equal importance in the approach of ‘internal marketing’ – communicating brand values to employees.

It’s a very simple premise: Employees, whether working for a consumer brand or a professional services company, are more likely to get fired up and remain engaged if they feel they are doing something that’s actually worthwhile. Steve Jobs, for example, was renowned for being less concerned about making a profit than ‘thinking differently’, yet Apple became the most profitable company in history.

In a recent TED talk, Simon Sinek argues that the most successful companies have products, cultures, and marketing strategies that all stem from their raison d'être. This is why companies like Apple and Tesla have grown into such powerhouse names – consumers and employees alike know exactly why the company does what it does (and in the way it does), because it helps both audiences meet the human craving for authenticity, purpose and meaning. In this same way Lego’s focus on core values and its alignment of commerce and culture enabled the toy manufacturer to put all the pieces together again.

The customer experience is at the heart of every brand’s interaction with its consumer. For financial service brands, experience has become even more important to consumers who are increasingly accustomed to taking more control over their financial affairs - brands are judged by their products, communication and interaction too. Below, Finance Monthly hears from Kirsty Maxey, Managing Director at Teamspirit, and Caroline Bates, Group Board Director at Chime Insight & Engagement Group, who give us their thoughts on how your business can better its brand by investing in the individual.

In recent years, the Financial Services marketplace has changed beyond all recognition. We have seen the emergence of challenger banks, mobile only brands and other disrupters that were once a rarity but are today an everyday experience for consumers increasingly accustomed to taking more control over their financial affairs. Changing regulation means that consumers have no choice but to take decisions they have never taken before, such as in the recent pension freedoms.

Meanwhile, the brands who were hard hit by the credit crunch have by no means gone away. Many are upgrading their back-end service and CRM systems and embracing innovation with as much enthusiasm as the challengers. They are playing to their strengths, using their reach and resources to flex their muscles. Others are seeking a more meaningful connection with consumers, repositioning themselves around their heritage, their values and their social purpose.

At the same time, consumers are no longer merely passive, or even grateful recipients of products and brand messages and are increasingly vocal in their criticism of those which don’t deliver on expectations. The concept of instant gratification, once confined to the FMCG and entertainment categories, has made consumers raise their voices – and brands, likewise, raise their game.

In the light of this change and in the wake of the Referendum, Chime Insight & Engagement and Teamspirit set out to identify the key drivers and dynamics within this new landscape. We sought to understand how consumers feel about Financial Services brands, what their expectations are in terms of brand behaviours and the criteria against which they are evaluating their choices.

To this end, CIE/TS conducted proprietary online research in Q4 2016, surveying a nationally representative base of 2,000 UK consumers on 20 consumer FS brands across multiple dimensions grouped under 4 key metrics named as the four E’s:

The brands included traditional leading banks, insurance and financial planning providers and payment providers and solutions.

Better customer experiences

The study found that consumers are backing financial brands that don’t just do good, but do more. They want brands that put their purpose into action, with better products, better customer experiences and better communication and interaction, not just better ethics.

The best performing brands have taken their social purpose and put it to work as a set of operational behaviours, in terms of the products they develop, the unmet needs they address and the customer experience they deliver rather than a more passive ethos of values and beliefs that sounds good, but ultimately serve little practical purpose.

The top drivers for Experience were:

By contrast, being contactable via social channels such as Twitter scored poorly with respondents. Only 13% considered this essential to their customer experience.

This shows how ultimately people want to feel that they matter to the brand and that their problems and needs are the reason why the brand is in business. “It’s not what you do, but what you do for me” is the prevailing theme when it comes to experience

Customers vs non customers

The results also revealed interesting differences as well as correlations in the attitudes of customers and non-customers of the surveyed brands. By giving customer and non-customer audiences equal weighting, regardless of the actual sizes of the audience, we were able to gain new insights into the high scores in the study overall of brands that have very small user bases but big reputations and conversely, brands which enjoy very high penetration but without the corresponding fame.

We were able to use this data to create 4 separate segmentations, which could be applied to each E in turn and also to create an overall market map.

Authentic brands included First Direct, Apple Pay and Nationwide. These are the brands that have a high degree of consistency between the external promise and the internal experience. They include Apple Pay, First Direct, Money Supermarket, Nationwide and Prudential

Discovery brands, which included PayPal and LV= are the brands that you need to experience in order to fully understand. In PayPal’s case, for example, it makes perfect sense, because if a person has never used it, they are unlikely to appreciate its security and convenience in any meaningful way.

Seduction brands, which include TSB, Santander and Standard Life tend to be those which have recently raised their profile in the market, through advertising or a new strategy, driving awareness and interest among non-customers whilst it’s business as usual for existing customers.

Outcast brands, which perform poorly with both customers and non-customers tend to be those with a legacy of a poor reputation.

It’s also interesting that the findings around the attributes on which customers rated a brand most highly, were often different to those chosen by non-customers. This suggests that what brands are promising in their marketing messages is not reflected in the customer experience and highlights the importance of ensuring that the brand and its customers are telling the same stories in order to present a united front.

Drilling deeper

The research study also looked at the perceptions of customers vs non-customers individually per ‘E’, that is specifically for Experience, Engagement, Ethics and Evangelism. This provided some interesting insights into consumer attitudes towards these brands and the factors behind what it takes to get an Authentic positioning.

Overall, although customers of all the brands in the survey rated them more highly that non-customers, there were some important differences that help to shed new light on how brands can ensure internal and external perceptions match and that the journey from non-customer to customer is seamless, satisfying and inspires the right storytelling.

When it came to experience, the Authentic brands of Apple Pay, First Direct and Money Supermarket had higher scores for both non-customers and customers than across the 4 Es overall. This would indicate that higher than average expectations by non-customers are matched by higher than average experiences by non-customers. By comparison, Nationwide and Prudential both scored lower for both groups on this measure, although still above average. This would indicate that despite scoring above average for both customers and non-customers, Nationwide and Prudential’s Authenticity is driven by something other than ease of doing business (our experience measure).

For engagement, every Authentic brand except Money Supermarket had a lower (although still above average) score for both customers and non-customers compared to their overall score. This would indicate that likeability is a less influential factor than might be assumed. But it’s interesting that for Money Supermarket, engagement is a driving factor in its Authentic positioning, perhaps as a result of its recent marketing campaigns.

Similarly, for evangelism, all the Authentic brands scored lower than against their overall score, albeit still above average. Apple Pay and First Direct in particular have a much bigger difference between their customers and their non-customer scores for propensity to recommend, showing how both brands rely on their customers to recommend them

By contrast, when it came to ethics, every brand in the Authentic quadrant scored more highly with both customers and non-customers. This contrasts with the broader findings in which respondents were ascribed an equal weight and experience was seen to be the key driver. When we attribute equal weight to customers and non-customers regardless of the actual relative sizes of the audiences, it’s ethics that really matters.

First Direct scored very highly with both groups, but particularly with its customers with 85% agreeing that they do the right thing. Prudential likewise scored particularly highly with its customers for ethics, with an 89% score, showing how its reputation for integrity and reliability as embodied in the Man from the Pru, is still an important part of the company’s brand equity.

Online vs branch customers

We also discovered some key differences when it comes to online vs branch customers. The need for personal attention is considerably more important, with 81% of branch customers considering staff with authority to solve their problems being their most important criteria, but only 30% ranking an easy to use online or mobile service as their number one. This shows how branch customers clearly don’t believe that an online or mobile service is an adequate substitute for a face to face experience and will lack the empathy and personal responsibility they need.

Nationwide performed very strongly on the measure of Experience with 76% of respondents believing that the brand is easy to deal with. This most likely reflects Nationwide’s commitment to being easy to deal with, attributing its mutual status to its customer-centric approach and bringing its ethos to life in its operations. It’s worth noting that Nationwide have recently reverted to calling itself a Building Society again in order to differentiate itself in the market – and create some clear water between it and the banks.

Verbatims from the research bear this out:

“UK based customer care centre, always answer phone quickly and resolve problem/answer query with minimal fuss”.

“Their website is simple to use and when you have a query they get back to you very quickly”

By contrast, branch users rated being told when there is a better deal or offer available and long standing experience in the financial sector more highly. After all, they won’t be able to shop around and keep up to date in the way that online users can, and are unlikely to have connected with the brand via social media, so will be more reliant on brands letting them know directly, in this case, via the branch. What the research shows is that branch customers are just as keen on the latest news and best offers as online users are, so should be looking to their branches as a real-world information hub.

To some extent, this can be explained by the demographic differences between online and branch users, who are naturally older. However, it does illustrate the vulnerability gap that online brands need to fill and need to not only claim, but prove, their reliability in order to be recommended to the older demographic.

Perception is reality

Perhaps the final point worth making is to never underestimate the halo effect of delivering a great experience and having a strong brand image. Both Apple Pay and First Direct score particularly highly among non-customers, demonstrating that perceptions of a good experience can be strong drivers of recommendation, as well as actual experience.

In Apple Pay’s case, as the only brand to score highly among both customers and non-customers, reflects the strength of the Apple brand’s halo effect on perceptions of the product and the attributes that even non-customers automatically associate with it.

All of which comes back to financial services communications benefitting from a clear brand purpose, demonstrated through behaviours. It gets both customers and non-customers talking and leads to brand evangelism. It doesn’t get better than that.

Global brand consultancy The Partners recently launched a comprehensive study entitled ‘To Be Or Not To Be’, which reveals what Britishness means for brands post-Brexit.

The Partners surveyed 1,000 consumers across the UK to garner the general public’s perception of British brands, and combined this insight with in-depth interviews with leading marketers to establish the value of British provenance for brands today.

The study found that many brands experience an identity crisis when trying to leverage a modern sense of Britishness. From a lack of clarity about who the target consumer is and their preferences, to a difficulty in identifying a defined set of British attributes, Britishness is becoming an increasingly complex aspect to employ, particularly for British brands positioning themselves as global entities.

Surprisingly, for a country known for its patriotism, the survey showed that just 25% of people consider a brand’s British heritage to be the most important factor in their purchase decision. This compares with 54% of participants rating the quality of product highest, 36% valuing customer service above all else and 29% placing emphasis on the brand’s individual culture and values.

But the survey also revealed a paradox: despite the majority of respondents believing that Britishness is not important when making a purchase, a significant 42% believe that brands should emphasise their Britishness more post-Brexit in order to appeal to a wider range of global consumers.

The Partners encourages brands to take advantage of these contradictions. This apparent ambivalence about the value of Britishness can be seen as an opportunity to redefine the roles that brands play in a world where being ‘British’ is no longer enough to compete in an already saturated market.

The report argues that by balancing the tension between the traditional notion of heritage and the ‘fresh themes’ and modern ingenuity at the heart of Britishness, brands will succeed with new and existing audiences, both in Britain and on a global stage.

This ability to balance the dualism inherent in Britishness is supported by the opinions of the marketers that The Partners surveyed, and is an attributing factor to the success of some of our most-loved British brands. This includes the BBC, which was voted the most admired British brand by 46% of participants in the survey.

The survey revealed that the top five most-admired British brands are:

  1. BBC
  2. M&S
  3. Cadbury
  4. Boots
  5. The Post Office

Sam Evans, strategist at The Partners, said: “Brexit has provided a moment for reflection on what Britishness represents. It also provides a choice, a fork in the road where brands can continue to assimilate in a global order of homogeneity or can choose to re-familiarise themselves with the ingredients that make Britishness a potent force. We believe that now, more than ever, it’s time for British brands to reclaim their Britishness. It’s in the interests of brands to build on and develop the positive associations for a new era.”

(Source: The Partners)

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