Forrester’s TRUE Brand Compass explores consumers’ attitudes about specific brands, evaluating the extent to which the brands command preference, referral and price premiums. Together, these success metrics combine to create what Forrester calls “brand resonance.” To arrive at a brand’s resonance, Forrester evaluates it on four attributes -- being trusted, remarkable, unmistakable, and essential.
By evaluating consumers’ responses within an industry vertical, Forrester can identify those attributes that are most important for driving brand preference, referral and price premium within that category. In the past, Forrester has performed its TRUE Brand Compass research for verticals such as health and beauty and food and beverage. Now, the research firm is applying its TRUE Brand Compass to financial services.
It will come as no surprise, I am sure, that being trusted is the attribute that drives the most brand resonance for financial service firms. Of course, trust is no small challenge for the finserv industry right now; as the report notes, we are in “an era where the reputation of many financial institutions has been tarnished,” and as a result, “financial service brands must work harder than ever before to regain consumer trust in their brand.” (For some examples of how financial service firms are working to solve the trust gap, check out my blog post and presentation deck from the recent LIMRA/LOMA Social Media conference.)
The Forrester study finds that being a trusted brand in financial services helps to build advocacy and preference, but that is not sufficient to create pricing power. To earn a premium price, brands have to become essential by making themselves irreplaceable in consumers’ financial lives. How? I know this is going to rock your world, but Forrester says the secret is “having products and services that meet (customer) needs, producing the highest-quality products/offerings, and providing good value for the money.” (Shocking, I know!)
The meat and potatoes of this thoughtful and informative report is the TRUE Brand Compass data furnished on specific brands such Visa, MasterCard, American Express, PayPal, Fidelity, Capital One, Citi and Bank of America. A few of these brands are doing well, creating brand resonance, trust and pricing power, but Forrester found that seven of the 10 financial service brands surveyed are laggards.
Forrester’s TRUE Brand Compass approach and findings are especially relevant to the financial service industry as it continues to struggle to win back trust after the 2008 financial crisis. Five years into our weak economic recovery, the industry still has a great deal of work to do to encourage greater trust. Social media can be part of the solution, but it is just as likely to be a driver of problems until financial service companies succeed in earning greater advocacy, improved Word of Mouth and more trust.
For more on this report, please see Tracy Stokes’ blog post on Forrester.com, or download/purchase the full report at http://bit.ly/ForresterFinServTRUE.