CMO Perspective: A Creative Wave in Financial Services
January 3, 2008
Anne Finucane is a reluctant maverick: No CMO works farther away (in Boston) from a senior management team (in Charlotte, N.C.) that values her guidance in the positioning of one of the world's best-known financial-services institutions. And it's safe to say that Finucane is a breed apart, in that it is probable no other CMO of a Fortune 500 company has won - along with her team - numerous creative recognitions and awards while serving for several years as head of broadcasting for Hill, Holliday, Connors, Cosmopulos. And, rarer still, she comes to her position with not just agency creative credentials, but extensive account-management experience - stripes she earned when she moved out of broadcasting to lead client management at Hill, Holliday and helped the firm pull down Ad Age's prestigious "Agency of the Year" honors.
"Do I think marketing is a core competency of banks?" Finucane asks. "Well, I think there has been more recent recognition among financial institutions that it is absolutely critical to growth. With the consolidation in our industry and broadening of products, services, and delivery channels, competition has escalated. Distinguishing ourselves from the competition requires operational excellence - and innovative, effective marketing." And it's just that kind of recognition that she helped bring to Bank of America in February 2007, when the company's first brand repositioning in four years broke during the telecast of the Academy Awards.
"You need to reposition a brand when conditions fundamentally change at a company," she says. And Bank of America's "Bank of Opportunity" positioning addresses the transition of that financial institution to what Finucane calls "a universal bank which seeks to become our customers' first choice and repeated choice for all their financial needs."
Although Bank of America is the country's largest online bank operation (www.bankofamerica.com has consistently been among the top 30 Internet properties in the United States and is the highest ranked bank Web site) and uses its site to aggressively market its products, Finucane remains a staunch advocate of a fully integrated marketing program that includes such traditional media as television ("a major marketer has to be on television. We have to be where our customers are and where our competitors are"). She also believes in the power of news media ("the press is an important part of the overall reality of how you're going to be externalized"), as well as the entire blogosphere ("if a blog is founded on some belief and has enough people attached to it, we need to pay attention").
Finucane was chief marketing officer of FleetBoston Financial when that institution was acquired by Bank of America in 2004. At that time, she served as Bank of America's Northeast president and took on the responsibilities of managing the transition throughout Fleet's former footprint (Maine to Pennsylvania). In addition, she had oversight for market leadership and setting the overall corporation's brand efforts in the region. In 2006, she moved into the global CMO position. In addition to her global marketing responsibilities, she oversees the Bank of America market presidents network, and its public policy, corporate communications, and philanthropic efforts. (Bank of America is one of the world's largest corporate philanthropists, giving away more than US$200 million each year.) She is also the managing director of the bank's political action committee, she chairs the Bank of America environmental council (which oversees a $20 billion initiative to support the growth of environmentally sustainable business activities to address global climate change), and she serves as a member of the corporation's management operating committee.
Strategy+Business (S+B): Your background is pretty unique in the universe of Fortune 500 marketing managers. It's not just that you came from an agency - there are lots of people in senior marketing positions with an agency management background. But you came from the creative side of an advertising agency that did some pretty breakthrough work for companies such as John Hancock and Infiniti. And given that, your appointment as CMO of a financial-services company seems slightly counterintuitive. How did your background prepare you for your current assignment?
Finucane: I started my career working for the mayor of Boston in the office of cultural affairs as an information officer. It was there that I picked up some sense of politics, an invaluable lifelong tool. My next stop was the Boston Westinghouse television station (WBZ), where I served as creative services manager, and we managed everything from public relations, to set design, to creating advertising in coordination with the rest of the Westinghouse television group. From there, I moved on to Hill, Holliday, Connors, Cosmopulos - an independent agency in those days that's now part of Interpublic. I did start on the creative side, and oversaw the agency's broadcast work. In time, I moved over to the account side, and later ran client management.
After 14 years and the birth of my fourth child, I left the agency and started my own consultancy. In terms of the agency work, I thought, "Pizza at midnight and another new business pitch is more than I can handle." I fully intended to make consulting my career and maybe achieve a little more balance and personal time in my life. I started with four clients - State Street Bank, Shawmut National Corporation, Partners HealthCare, and Hill, Holliday. Things grew more complicated when Fleet Financial Group bought Shawmut. Fleet had grown to become the largest bank in New England, was moving its headquarters to Boston, and wanted a seasoned head of marketing.
That was in 1995. My initial goal was modest: to just try the corporate world and see what it was like to operate as a marketing officer in what I thought was a huge corporation with more than US$84 billion in assets and 35,000 employees. The next eight years saw enormous change in the financial-services industry throughout the U.S. For anyone in my job at that time, mergers and acquisitions defined the nature of our work and pushed us to adjust to our industry, legislation, and customers at a pace we never could have anticipated. There was more movement in the financial-services industry during that period of time than had occurred in the 50 years that preceded it.
In fact, that was the biggest business break of my life. I had a complete immersion into how the financial-services business works.
And I found that my agency background helped. Advertising agencies cram for a business exam every day on their clients' behalf. You're constantly learning the clients' business, first in a new business pitch and later as a partner seeking to help your clients grow their business. At Fleet, I learned the nuts and bolts of our businesses through each of the deals that we completed. The lessons learned went well beyond marketing and included understanding what the analyst community focused on, as well as the factors beyond earnings that made our stock rise or fall.
We completed half a dozen deals in that eight-year period of 1995 to 2003. And then, in 2003, Bank of America acquired Fleet. Here was a financial-services company that, in the same time frame, had been North Carolina National Bank, NationsBank, and then Bank of America. It had gone through the same metamorphosis as many banks throughout the country, but with greater success. Bank of America announced it was acquiring FleetBoston in October 2003. We closed the next year, in April of 2004. Initially, I served as president of the bank's Northeast division. I took on the additional role as chief marketing officer for Bank of America globally in March of 2006.
S+B: Working with an agency with a global reputation for creativity, you were able to tell your clients: "Be patient. We're doing something very different for you, but it's going to work out well for you." You believed it. And your belief paid off, in time, with sales and profitability. How have you brought that gutsy, intuitive edginess into a highly competitive financial-services sector?
Finucane: The financial-services sector makes very bold moves. Through organic growth and acquisition, Bank of America has made some of the boldest moves of any industry leader and become the first and only coast-to-coast bank. And we were the first U.S. bank to invest in the first IPO of a large Chinese bank, China Construction Bank. Major investment and our management's foresight have propelled us to be the leader in the online banking space.
Each and every day, you have to be prepared to answer four simple questions: "Do we have the right people? Have we given them the right tools? Are we doing all we can for our customers and business clients? And, ultimately, can we definably demonstrate that we're helping promote the financial health of the company?" Measurement tools have become a lot more sophisticated today than they were when I was in the agency business.
By using our unmatched knowledge, analysis, and insight, we anticipate needs and deliver unparalleled innovative and integrated financial solutions. We create opportunity for our customers, corporate clients, and the communities in which we work and live - here and around the world. Determining the marketing ROI requires lots of data: not just sales numbers, but such specific brand measurements as "likelihood to recommend" or "likelihood to purchase the next product to buy." There are demographic and geographic considerations in measuring that success, not to mention "share of wallet" and profitability. And then, of course, there is that daily feedback called stock price. And we look at all of that. But none of that is a substitute for the willingness to make strategically smart and bold moves.
S+B: Your boldest move at Bank of America came earlier this year [in February 2007], when you used the Oscar telecast to introduce a new positioning for the company.
Finucane: A business needs to reposition a brand when things fundamentally change at that company. So much had changed at Bank of America in the four years since we had launched the "Higher Standards" brand positioning. Bank of America had more than doubled in size, moving from 24 million households to 56 million households. We had become the number one credit card in the nation and in the U.K. Today, we are the number one small-business bank and the number one private bank. We have 50 percent more affluent customers than we had only three or four years earlier. We have made strong investments in China Construction Bank, and in Santander Serafin in Mexico.
All of that has happened in the last four years. And that growth, in aggregate, made Bank of America a distinguishably different company than we had been when we employed Higher Standards as our brand positioning. Four years ago, Higher Standards was the right value proposition for Bank of America. As a theme line, it addressed a continuing promise to ourselves - as associates of a company - and to the marketplace as a whole that we operate at the highest standards of integrity, straightforwardness, openness, and honesty. It was a message to a post-Enron, post-WorldCom, post-9/11 atmosphere, when a company's trust, its integrity, and its word were critically important against a very difficult backdrop.
A year or two ago, we began to look at that promise and examine what we'd accomplished. And what we discovered was that we had indeed raised our profile. We learned that our various constituencies - our associates, the people who work for our company, and the customers we serve - believe that we do indeed operate successfully with integrity and trust.
But the downside was that even though we had improved our overall customer-satisfaction scores, the "what's-in-it-for-me" perspective for our customers wasn't as clear as it needed to be. Today, we do business with more types of people, in more geographies, with more diverse demographics. We provide more advice to more affluent customers. We do business with more small businesses, and our industry expertise and sophistication in products for large corporate customers set us apart. With that many customers in various businesses, we can anticipate needs with greater insight and deliver our products with greater ubiquity.
And that was our aha moment. We knew we had to get much more aggressive at telling our customers, "We see what you see." We had to translate all our growth and financial leadership positions into something that individuals, businesses, communities, and investors could value as a competitive advantage for them.
So we went about the work of determining a brand positioning that's unique, that's compelling, and that's competitively advantageous. We did the things you would expect us to do: We interviewed customers, employees, the analyst community, and senior leaders who were developing products or running businesses. We plotted our competitive advantage in products, services, and distribution tools.
Because we provide financial services to more people than anyone else in the U.S., we understand our customers and can anticipate their needs and the imperative to deliver unparalleled, innovative products and services that meet those needs. And our customer base is more diverse and in more categories than anyone else. From basic checking accounts, to credit cards, to trading, to asset management, to corporate and investment banking, to whatever the future holds, we've built a universal bank where customers can come for all their financial needs.
In tandem with our customer base, we have an unmatched distribution capability that not only covers most of the United States, but also is capable of getting products out quickly and efficiently. And that's part of Bank of America's model - establishing ourselves as a major force in our businesses, in key geographies, nationwide.
S+B: How did all this analysis translate into a new positioning?
Finucane: It's always about seeing our business from the customer's perspective. We felt our positioning needed to reflect our ability to better anticipate our customers' needs and perspectives. We have great insights into our customers, we can deliver more innovative products and solutions with greater distribution than anyone else, and we can prove it. There's a nice balance in that message.
Furthermore, we wanted to take advantage of our name, Bank of America, and so the line that you see is, "Bank of America, Bank of Opportunity." It speaks to the opportunity that customers - individuals and large companies alike - see. The concept of opportunity is a dominant American sensitivity that resonates globally.
S+B: How long did you have to wait before you knew that "Bank of Opportunity" had made a connection with consumers?
Finucane: The anecdotal feedback was immediate. Of course, we'll keep reviewing it, measuring effectiveness.
There's a real temptation to evaluate the brand apart from the products. We don't go down that path. We link them. Our brand is tied to the performance of our individual products, our services, and the satisfaction of our customers.
S+B: With so many different kinds of product in play, how do you track your marketing performance to determine if your investment is paying off?
Finucane: Marketing can be seen as an expense or an investment. And there are a couple of ways that we bring accountability to our work. For instance, for a direct-mail campaign for a credit card, ROI is fairly straightforward. You look at what it costs to produce and send the mail, and what you yield in terms of cards booked. You do the math and come out with the ROI. We know going into the process that, industry wide, direct mail is an expensive tactic with low new account yields, but it is definable. At Bank of America, however, we have a real long-term advantage when it comes to direct marketing. In 2005, when Bank of America bought MBNA, we significantly increased our opportunity to reduce costs over the longer term. We have 5,800 banking centers. It costs about half as much to sign somebody up online as it does in a banking center, and it costs about three times as much to do the same job by direct mail. Over time, online and banking center distribution channels help our associates make more money for the company, at a reduced marketing cost.
For the more general marketing efforts, the big factors we look at are sales and revenue generated by specific programs. We'll look at the overall sales. And we'll compare those numbers geographically and demographically. We have the competitive data that will produce a strong variable analysis of what it costs to make a program run successfully.
From a brand perspective, we'll then examine that specific program from a couple of different views - among them, "likelihood to recommend" and "next-purchase consideration." To me, those are some of the most valuable metrics we use.
Altogether, the measurements jell. Strong brand scores along with geographic and demographic trend data and sales and revenue numbers provide a robust report card.
S+B: You mention Bank of America's aggressive program to diversify its presence and its customer base in the last few years. How does that strategic shift affect the company's positioning?
Finucane: In the simplest terms, historically there were manufacturing companies and distribution companies - a theory nicely outlined in David D'Alessandro's Brand Warfare. You were one or the other. Procter & Gamble, for instance, was a prototypical manufacturing company, and FedEx was a distribution company.
Today, that sort of categorization - with sharply differentiated platforms - doesn't hold. Many companies, like Procter & Gamble and FedEx today, manufacture and distribute.
The combination allows a company to become a "destination brand." And Bank of America is focused on being a destination brand. We not only "manufacture" banking products and services, we also provide advice through our corporate and private client relationship managers - and we distribute products and services through our sales force, our 5,800 banking centers, and online to 20 million customers. When you think of doing anything in the financial-services arena, we want to ensure that you feel compelled to give us strong consideration.
Marketing's job is to create a demand for our expertise, products, services, and channels. And, when we've become your destination, we want you to come back again and again, for a variety of services. This holds true for consumers, small-business investment services, and corporate and investment banking.
S+B: The financial-services sector is fortunate in that it has so many ways to stay in touch with its customers. How does Bank of America make use of those points of contact?
Finucane: In the U.S., we do more business with more types of customers in more types of businesses than anyone else in the financial-services space. And electronically that presence has expanded exponentially, as we're also the largest online bank. That capability has given us a tremendous ability to expose our customers to other kinds of Bank of America experiences. Customers don't go online just to check their accounts; they pay their bills and flag products online. They seek information, balance the books - small-business operators can run their payroll through our online services. You can transfer funds and pay bills over your cell phone. Building out our Internet services has been an important platform.
S+B: What are some examples of Bank of America's innovation in staying in touch with its customers?
Finucane: Well, Americans aren't savers. Yet consumers want to save for the future, whether it's for a car, a home, retirement, or their child's college tuition. That said, they often don't know how to get started. So our consumer banking partners developed a new product innovation called "Keep the Change," in which every time customers make a purchase with their Bank of America debit card, we round the purchases up to the next dollar and transfer the difference from their checking account into their savings account. Buy something for $5.87 and you'll add 13 cents to your savings. A $9.25 purchase puts 75 cents into your savings account. With Keep the Change, we make it easy for customers to save by creating an electronic piggybank, and we jump-start the process by matching 100 percent of transfers for the first three months and 5 percent thereafter, up to $250 annually.
We also have a free "SafeSend" product that allows our customers to safely send money home to Mexico. The program is a real alternative to unregulated channels or fees charged by check-cashing services.
Through our retail brokerage affiliate, we offer $0 online equity trades, and they have literally transformed the marketplace. If you have a combined deposit balance of $25,000 with us - and that figure could be any combination of deposit accounts that aggregates to $25,000 - you may be able to execute as many as 30 commission-free online equity trades per month. These products are emblematic of a larger offering intended to make powerful connections with different customers while serving as strong points of distinction between us and our competition.
S+B: Your path to the office of CMO was untraditional. You came to your job after a merger. In many cases, officers from an acquired company politely leave, but you stayed. And, you didn't move down to Charlotte; you stayed in Boston. Did this create challenges when it came time to present the brand messaging idea?
Finucane: Bank of America had traditionally taken someone out of the line and given him or her a rotation in marketing as part of the company's professional development practices. Perhaps I offer a new paradigm.
Regardless of my location, I'm integrated into the rest of the company. I have a corporate job; I just don't happen to live in Charlotte, N.C. Bank of America has a meaningful presence coast to coast. And it's a flexible enough company that understands and supports the idea that family concerns matter. We have three major business divisions, and, in fact, one of those, global wealth and investment management (headed by Brian Moynihan), is based in Boston. So, Brian's team and business provide a very meaningful presence here in Boston.
My past experience outside the organization has, I hope, been of value to our corporation. In addition to marketing, I am responsible for public policy, press and corporate communications, the market presidents network, customer research, and corporate philanthropy. The variety of disciplines that are encapsulated by this office provide an integrated view of how we manage our brand externally and internally and the various ways we engage our associates, customers, clients, and communities.
Our associates are our best brand ambassadors. And I will tell you, the company leadership - from the CEO down - thinks of our associates as our most important asset.
S+B: What is a Bank of America brand ambassador?
Finucane: It's someone who recognizes the company's value proposition, who understands our full range of services and why we offer them to our customers. And it's someone who knows - and contributes to - our culture. The idea of behaving as a brand ambassador is in the DNA of the company.
When we make a public statement, whether it's an opinion piece in the newspaper or a global marketing campaign, we make every effort to let our associates know about it first. When we rolled out the brand, the first people who saw it were our associates. And we supported that with a video we aired internally that reviewed our thinking about the evolution of the brand. We had more than 100 meetings in the two-month period before the brand launch to get everybody up to speed. And people appreciated the trust we put in them. Word never leaked out about the new campaign. You know, often in politics the idea of keeping a secret is telling only one person at a time. But at Bank of America, we rolled out a brand in advance to 200,000 people and they honored that trust.
S+B: How will bank marketing change now that consolidation and merger opportunities are drying up? Does that mean banks will have to become better at marketing their products so that growth is more organic rather than merger driven?
Finucane: There'll always be new challenges. We do need to align our marketing efforts to support and accelerate organic growth for the company. You can't churn customers in and out and grow a business. Once we have a customer, we work to keep him or her. We want to be their first choice and then their repeated choice. And then you need that customer to recommend our brand to family and friends. Those are the two most critical paths for driving organic growth.
Our advantage is, if we're the first choice and we do our job right, we're more likely to be our customers' repeated choice because we offer such a broad array of products and services in more locations than any other financial-services company. And in recommending us to a family or friend, they know we are likely to be there for them, whether the family or friend is in Washington, D.C.; Texas; Massachusetts; Florida; or California.
S+B: How are you using new media technologies to strengthen your connection with your customers? What new methods are you using to get in touch with people?
Finucane: Banks are ahead of the curve. What other retailer or business-to-business operation connects with a person online, on the phone, in a commercial center, or through an automated teller machine? With our points of distribution, we are well ahead of any other retailer that you can think of.
When we take on a major new marketing initiative, we take a totally integrated approach. It's imperative that we consider what each line of business is trying to sell and make sure that we've conducted a 360-degree review of the marketing tools we can utilize to sell those services and advice.
We haven't walked away from more traditional media like TV. Yes, there is fragmentation, and yes, there is overall less viewership relative to the total number of people. But it is still the number one medium to get your message out. And if you're not there - or, more critically, if you're not there and your competitors are - you're at a true disadvantage.
For now, a major marketer has to be on television. We have to be where our customers are and where our competitors are. Live TV events or high-impact TV are often preferred over regularly scheduled programming because people are less likely to digitally record them and skip over the advertising messages.
So we're in TV, we're online, we're in radio, we're in print. And we are very active with the press. Maybe that is something I have been able to offer. In the Northeast, press and politics are in the drinking water. We're accustomed to it. And we're comfortable with it. We're not writing the news reports, so the piece may not come out the way we want. And what appears in print or on the evening news may not always be a story we wanted. It may not be accurate, either. But the press is an important part of the overall reality of how you're going to be externalized. It's an important part of our reality - and certainly affects our customers' perspectives.
We're also very aware of emerging channels: the social media sites and blogs. I think that you only become acutely aware of these channels when something you didn't want to share appears there. It has an effect, particularly with those who feel passionately about certain things. Do they have a broad-scope effect? Not yet. But they might, and we try to stay on top of it.
We continuously monitor all kinds of media activity, from blogs to traditional press. Also, online media is an important part of our marketing mix. We're probably spending 300 percent more on online media this year than we did in 2004.
S+B: How do you convert all that online traffic into marketing opportunities?
Finucane: Today, we have more than 20 million active online banking customers. Initially, www.bankofamerica.com was a place where you'd go to check your account balance. Then people learned they could pay their bills and track their spending patterns there. People learned how to transfer funds. The interest in the site evolved over time and, with it, so did our ability to sell other products. There are some very practical issues here. If you will pay your bills online, you are likely to keep more money in your deposit account. This is a good thing for a bank.
Throughout the growth of our online presence, we've had a constant: We want to make the basic transaction easy, safe, and secure. If their experience is good with one level of engagement, it's a good sign they'll also be satisfied with the next tier of service.
S+B: From someone who's seen so much from so many different perspectives, any parting words of wisdom for someone starting out in marketing?
Finucane: Maybe a few. First, learn the business. Make sure you understand how the company makes money, how the process works, and who owns decisions.
Second, advertising that wins awards but doesn't help grow the business misses the boat. You have to integrate and evolve across marketing and communications, across businesses, across customer and community segments. Use your customer research and data to inform your next decision. Then evaluate the marketing tools available to build your best effort - broadcasting, online, podcasting, print, and radio.
Third, don't ignore press and politics. Keep on top of the news, recognize geographic differences, know where the country is headed politically - it will all matter.
And fourth, remember that the brand you represent is a promise to all who see it.
"Anne M. Finucane: A Creative Wave in Financial Services." Paul Hyde. In "CMO Thought Leaders: The Rise of the Strategic Marketer. A Strategy + Business Reader." Edited by Geoffrey Precourt. Booz Allen Hamilton, 2007.