MBA directs resources toward image, emerging markets

Northwestern Financial Review, Jul 15-Jul 31, 2005 by Bengtson, Tom

Members of the Minnesota Bankers Association met in Duluth, June 26-28, where leadership discussed plans for promoting the industry and for reaching out to emerging customer segments.

Greg Burger, Minnwest Bank Luverne, Minn., invited bankers to think about a current industry problem in a new way. "Think about identity theft and how it affects your bank. I'm not talking about your customers. I'm talking about your business. Commercial and community banking is becoming the victim of the very thing we try so hard to prevent for our customers; we continue to allow our competitors to steal our identities," Burger said.

"As bankers, we have traditionally enjoyed a high level of prestige and a strong sense of security with our customers. We've worked very hard for this position in the market. The wanna-bes of this profession certainly don't want the rules and regulations of banks but they want to be bankers. Credit unions and their cousins want to take our image and our customers. One glance at the numbers will tell you that unfortunately they continue to be successful. We are losing market share with no end in sight. Credit unions top our list but we also contend with Farm Credit Services, insurance companies, car companies, mortgage loan companies, realtors and on and on and on.

"So what can we do? Whether we like it or not, it has become very difficult for our customers to tell the difference between them and us. While it is extremely important for us to lobby our government officials for a level playing field, we really need to take the effort to the next level. We need to go to the public and explain why we are different from our non-bank competitors, and why their communities would never be the same without committed and concerned community bankers.

"I'm asking you to tell our story to the community and also to the state that we serve...it is now our responsibility to educate - or maybe I should say re-educate - the public, as well as the politicians about the strength of our commitment and our importance to the community. Only let's do it in our words.

"It is my intent during the coming months to bring the strength and the talents of the MBA to bear to help tell that story. Our competitors are doing a good job of establishing our image in a way that is not very becoming and certainly not true. It is my hope that we can begin the process of redeveloping our image and stature in our communities in the direction that we choose."

Burger explained that he will chair a new MBA Image Task Force that will develop a variety of tools that will make it easier for bankers to bring their success stories to local reporters, elected officials and other opinion leaders. Burger acknowledged that other MBA chairmen have focused on industry image enhancement in past years and said the time is right to re-establish it as a top priority. He said his 2005-2006 chairmanship will only be a starting point in an effort that could take years.

Gary Geiger, Heritage Bank in Willmar, Minn., thanked bankers who participated in the association's Day at the Capitol and in its Washington, D.C. trip during his chairmanship. He called those two events the highlights of his year. But as he handed the gavel over to Burger, he challenged his colleagues to think about the impact of growing minority populations in Minnesota and how they are affecting the banking business. Geiger said that in his own community of Willmar, Hispanics now make up 22 percent of the population.

"The minority population in Minnesota is growing faster than the white population," Geiger observed. "We need to address this as an opportunity, not as a problem."

During the past year, Geiger served on an advisory group that guided Gov. Tim Pawlenty's Emerging Markets Homeownership Initiative. As the advisory group tried to determine why minorities own fewer homes than whites in a state that boasts the highest rate of home-ownership in the country, Geiger said he began to see the need for an MBA group to look at issues surrounding emerging markets.

Geiger said MBA recently put out a call for task force members, and a group of 12 people was formed. It will focus on helping bankers reach out to emerging markets through three kinds of efforts: education, marketing and human resources.

The convention's two-day slate of presentations re-enforced the themes of public relations and emerging markets. Boston-based author Larry Gulko gave bankers insight into the power of branding, and the importance of building a brand. 'Tour brand is your single most important asset," Gulko said.

Gulko said the most successful businesses focus on a single product or service. Those trying to be "everything to everyone" suffer, he said, citing retail department stores as an example.

While many businesses offer advantages that logically trump competitors, Gulko said companies that connect emotionally with customers have a much better chance of succeeding.

"The sum of your customer experience is your brand," he said.

MBA has spent the last year evaluating its own brand and will be unveiling a new branding initiative soon, said MBA Director of Marketing and Communications, Debra Hurston. The organization already has launched a redesigned web site, and a new logo is set to be released soon. Burger said now that the association has looked at its image, it is time to help bankers work on the industry's image.