Does Brand Equity Matter to Financial Services Brands?

Anne Rivers

Managing Director

DOES BRAND EQUITY MATTER TO FINANCIAL

SERVICES BRANDS?Anne R ivers

Manag ing D i rec to r, BAV GroupFebruary 2018

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“If this business were to be split up, I would be glad to take the brands, trademarks and goodwill, and you could have all the bricks and mortar—and I would fare better than you.”

—John Stuartformer Quaker Oats chairman

BRAND ASSET®

VALUATOR (BAV®)

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THE WORLD’S LARGEST DATABASE OF BRANDS

52COUNTRIES SURVEYED

$150MMINVESTED

1.2MMCONSUMERS & GROWING

23YEARS OF LEARNING

56,000DIFFERENT

BRANDS

75CONSISTENT

METRICS

CATEGORY AGNOSTIC

COMPREHENSIVE BRAND MEASURES OF HEALTH, PERSONALITY AND LOYALTY ACROSS INDUSTRIES

WIDELY PUBLISHED AND VETTED BY ACADEMICS

TIED TO FINANCIAL PERFORMANCE

WE MEASURE BRANDS ON FOUR PILLARS OF BRAND EQUITY AND MOMENTUM

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DIFFERENTIATION RELEVANCE ESTEEM KNOWLEDGE

Unique Meaning Appropriateness Regard Understanding

Relates to margins, loyalty and cultural currency

Relates to market penetration Relates to perception of quality and respect

Relates to consumer experience

B R A N D S T R E N G T HF u t u r e G r o w t h P o t e n t i a l

B R A N D S T A T U R EC u r r e n t O p e r a t i n g V a l u e

WE PLOT OVER 3,500 BRANDS IN THE US TO SHOW RELATIVE BRAND EQUITY

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NICHE/MOMENTUM

NEW & UNFOCUSED EROSION

LEADERSHIPMASS MKT

DIF REL EST KNO

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entil

e …

DIF REL EST KNO

Perc

entil

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DIF REL EST KNO

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BRANDS WITH BETTER EQUITY PERFORM BETTER IN THE MARKET

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BAV® BRAND ENERGY INDEX OUTPERFORMS THE MARKET The 50 s t rongest ga in ing brands, as measured by our brand equi ty metr i cs ,

cons is tent ly outper form NASDAQ and S&P 500

$0

$5,000

$10,000

$15,000

$20,000

$25,000

$30,000

$35,000

$40,000

S&P 500

CAGR: 1.79%

CAGR: 2.77%

CAGR: 4.29%

Source: BAV, USA, All Adults, Half-Years, Dec 2001–June 2016

* Dollar value based on half-year returns of the BEX, NASDAQ and S&P 500 on a hypothetical $10,000 initial investment

* BEX Index returns weighted by change in brand strength for each period

WE HAVE TIED BAV® BRAND EQUITY TO VALUATION METRIC ACROSS CATEGORIES

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Among Non-Profits, Brand Translates to Donations

BostonRedSoxNewYorkMets

NewYorkYankees

BostonCelticsDallasMavericks

LosAngelesLakers(2006)

MiamiHeat

NewYorkKnicks

DallasCowboys

NewEnglandPatriotsNewYorkGiants

NewYorkJetsPittsburghSteelers

BostonBruins

NewYorkIslanders

NewYorkRangersPittsburghPenguins

y=19.264x+96.248R²=0.66

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

0 10 20 30 40 50 60 70

Fran

chise

Value

($mill)from

Forbes

BrandAssetfromBrandAsset®Valuator

In Sports, Brand Equity Predicts Franchise Value Country Brand Strength Drives Economic Power Globally

Intangible Assets per Dollar of Sale

NICHE/MOMENTUM

MOST FINANCIAL SERVICES BRANDSEND UP IN THE ERODED QUADRANT

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NICHE/MOMENTUM

NEW & UNFOCUSED EROSIONLEADERSHIP

MASS MKT

DIF REL EST KNO

Perc

entil

e …

DIF REL EST KNO

Perc

entil

e …

DIF REL EST KNO

Perc

entil

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DIF REL EST KNO

Perc

entil

e …

SO DOES BRAND MATTER FOR BANKS AND FINANCIAL SERVICES?

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YES – IT IS THE ONLY THING THAT MATTERS

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UTILITIES

BANKS AND UTILITIES CORRELATE AT 85% AND FACE SIMILAR CHALLENGES

BANK

REGULATION

RISK MANAGEMENTMITIGATION

OPERATIONALEFFICIENCIES

CUSTOMERSATISFACTION

MARKETINGAND

BRAND

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HOW BRAND MATTERS

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DRIVES CONSUMERS THROUGH THE FUNNEL

CONNECTS WITH VARYING CUSTOMER GROUPS

DRIVES FIRM VALUE

1.

2.

3.

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BRAND ELEMENTS DRIVE FIRM VALUE FOR FINANCIAL BRANDS

1.

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BRAND HELPS YOU CONNECT WITH EACH CUSTOMER GROUP

2.

0

50

100

0 50 100

BR

AN

D S

TREN

GTH

(Ene

rgiz

ed D

iffer

entia

tion

& R

elev

ance

)

BRAND STATURE(Esteem & Knowledge)

Millennials

Females

Hispanics

HHI $100k+

HHI $50k+

HHI $75k+

Males

Democrats

Republicans

Small Businesses

Enterprise Decision Makers

Boomers

American Bank Brand by Audience

Brand Considerers

Brand PassionatesBrand Users

Base: BAV, USA, 2017; Various Audiences

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BRAND DIFFERENTIATIONDRIVES CONSUMERS THROUGH THE FUNNEL

3.

Base: BAV, USA, 2017; All Adults

Credit Card Brand

020406080

100

020406080

100

Bank Brand

020406080

100

020406080

100

020406080

100

020406080

100

D R E K

020406080

100

020406080

100

D R E K

D R E K D R E K

D R E K D R E K

D R E K D R E K

KNOW

CONSIDER

USE

LOYAL

BRAND DIFFERENTIATION IS WHAT THE FINANCIAL SERVICES CATEGORY LACKS

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0

20

40

60

80

100

Citibank BankofAmerica Chase T-Mobile AT&T VerizonFiOS(Internet) XFINITY LevelUp ApplePay Square PayPal.com Kickstarter Facebook Microsoft Amazon.com Google Apple

ENERGIZED DIFFERENTIATIONALL ADULTS

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SO THE QUESTION IS, DO REGULATIONS, RISKS OR OPERATIONAL CHALLENGES

MATTER TO BRANDS THAT ARE CONSIDERING JOINING THE FINANCIAL

SERVICES SPACE?

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50

100

0 50 100

BR

AN

D S

TREN

GTH

(Ene

rgiz

ed D

iffer

entia

tion

& R

elev

ance

)

BRAND STATURE(Esteem & Knowledge)

Niche LeadershipVISA

MasterCard

Bank of America

Discover Card

Wells Fargo

Chase

American Express

TurboTax

Citibank

Capital OneCiti

Merrill Lynch

Equifax

Charles Schwab

Quicken Loans

Credit Karma

FICO

LifeLock

Quicken

Experian

NYSE

Fidelity Investments

Barclays

Vanguard

Moneygram

BloombergHSBC Sun Trust

Kickstarter

TaxAct

TD Bank

Ally Bank

U.S. Bancorp

BB&T Bank

Deutsche Bank

Regions Bank

Key Bank

UBS

SAP

Square

Samsung Pay

Sharebuilder

Paychex

Guardian Life Insurance

Deloitte

XeroVoya Financial

Credit Suisse

Accenture

Santander

NewDay USA

Thomson Reuters

RBS

RBC

KPMG

LevelUp

Venmo

American Family Insurance

MetLife

UnitedHealthcare

USAA

JPMorgan Chase

NASDAQ

HOW WELL POSITIONED IS YOUR BRAND?

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QUESTIONS

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H O W P E O P L E

ENGAGE

MORE HOLISTIC INSIGHTSA N D A D E E P E R , C L E A R E R U N D E R S T A N D I N G O F T H E C O N S U M E R J O U R N E Y

W H AT P E O P L E

DOW H AT P E O P L E

THINK

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THANK YOU!FEBRUARY 2018