Banks have not been as aggressive as the packaged goods companies when it comes to branding, but the advent of activities like home banking could change that.

[Expanded Picture]When Douglas Pecklo talks about product branding, he sounds like diet guru Susan Powter on the joys of low-fat eating. He is a branding True Believer - an apostle and a salesman in equal measure.

One of Pecklo's favorite stories is an experience he had in Toronto recently. A vice president at branding consultants David Wood Associates (DWA) in New York, Pecklo was meeting with a group of executives at Bank of Montreal on a project. When they all broke for lunch, the executives said they had to stop at the "Green Machine" for some cash. They meant a Bank of Montreal automated teller machine, of course. But Green Machine is actually the name that a Canadian rival - Toronto Dominion Bank - uses for its ATMs. For Pecklo, this was a wonderful testimony to the power of branding: here were his own clients using a competitor's product name!

Banks have been scooping up marketing wizards from packaged goods companies for nearly 20 years, as when Citicorp started recruiting them away from General Foods and Procter & Gamble in the late 1970s. And yet there are comparatively few examples in banking where a brand name has become so popular that it evolves into the tie facto name for all such products, like Jell-O or Kleenex, two of the most successful trademarks ever.

Pecklo believes that basic banking products like checking accounts, credit and debit cards, mortgages and certificates of deposit have become so ubiquitous that it's hard to tell them apart. "(Bankers) are in a commodity-type business and they really need to differentiate so they can separate," he agues. DWA has a number of branding successes to its credit, including the Slice soft drink, the drug Prozac and various IBM Corp. products including PS/2 personal computers and the ThinkPad notebook computer. In addition to Bank of Montreal, where he is working on an assignment for its Harris Bancorp unit, Pecklo is handling a branding project for Chemical Banking Corp.

Your brand identity is, in Pecklo's words, what "differentiates you and makes you special." It creates an image in the mind of the person who hears the name. Ferrari sports cars: fast and red. Brooks Brothers suits: conservative and expensive. Says Pecklo, "It's better than advertising; it's cheaper and lasts forever."

Indeed, Pecklo points to a 1987 Boston Consulting survey that examined the performance of leading brands in 22 categories, from 1925 through 1985. In 19 of those categories, the top brand in 1925 was still the leader 60 years later.

But in banking, at least, brand identity doesn't automatically lead to "New Improved Checking!" "You have to start with the institution," says Donald Heineman, president of the Hatteras Group, a Chapel Hill, NC-based consulting firm that has handled assignments for Citi, Barnett Banks Inc. and NationsBank Corp. among others. "You're not selling a branded product like detergent." Heineman cites the example of Merrill Lynch & Co., which has a very strong brand identity built around its corporate identity, and yet has not applied the same branding strategy to specific products like its successful Cash Management Account.

All of those marketing aces who joined banking from outside the industry years back found they had to apply the principles of branding a little differently. That includes Denise Johnson, director of marketing for Bank of Boston Corp.'s private banking business, who began her career in advertising and later joined Citi from Playtex. "I don't know if I'd use the word (branding) as it's used in packaged goods," she says. "But we're doing the same thing, which is positioning." Adds Johnson, "We've found out that the bank is really the product that sells."

In banking, on the other hand, there is considerable emphasis being placed nowadays on expanding the customer relationship by selling them additional products.

It's not entirely true to say there has been no product branding in banking. As Johnson points out, various all-in-one financial accounts - like Chemical's "Chem Plus" or BankAmerica Corp.'s "Alpha" - have been given their own product identity, even though they are carefully tied back to the banks themselves.

But the industry's cautious approach to product branding may have to change as the industry pushes into new areas where corporate identity might not suffice: home banking, mutual funds and insurance.

Pecklo predicts that the first company that offers a good home banking product with a drop-dead brand identity could blow everyone else away. Of course, there is such a company now that might fit Pecklo's description. It would love to own the interactive banking market. You might call it a packaged goods company for the 21st century. Its name is Microsoft Corp.

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