It is very common to find financial services firms wasting time pursuing clients who are actually not the right fit. When clients can’t differentiate between firms, they make choices based on other factors, such as price, rather than more important factors, such as the genuine value and expertise you bring to their particular situation.
Branding can pay off for financial services companies by offering a strategic solution to these and other common business development and retention issues. Specifically, here are the top four problems that branding can solve:
Differentiation in a commoditized market
- The financial services world, including the boutique offerings, is getting more and more crowded. When you (or your current or potential clients) compare your firm to competitors’ firms, you (and they) can’t clearly understand the differences. A well-articulated brand clarifies your position in relation to your competitors. It enables you to connect more powerfully with those potential clients who most likely want what you uniquely offer. It also enables you to establish deeper bonds with current clients, making it less likely for them to replace you (what is unique is irreplaceable).
- Word of mouth
Referrals are a critical source of new business for your firm. A strong brand is easy for your referral sources to explain. If your clients (or their influencers and trusted advisors, such as attorneys) can’t easily articulate how your firm is better and different from your competitors, their efforts to refer you are far more difficult and less effective.
- Commoditized Price
You are competing on price. A strong brand moves you away from being a commodity and enables you to charge a premium that reflects your actual value to your clients.
- Confusing messages
Each person responsible for business development in your firm gives a slightly different answer when asked to describe your firm and say how it is better than and/or different from competitor firms. This may seem harmless, but if you and your team aren’t on the same page about how you are better and different, then your business development efforts will be less efficient and less effective. When everyone is working from the same brand understanding, you can identify the most promising potential clients and craft the most effective pitch based on the true vale your firm offers.
So next time you think that branding will cost a lot of money that could otherwise go directly to profit, think also about the problems that it will solve for you. In the long run, they are many.