TCF Gets a Brand Refresh Amid Low Customer Satisfaction
TCF Financial took $44 million in charges to rid itself of mortgages made before the housing collapse. A distressed-asset investor purchased more than $400 million in loans from the company, and another pool of bad mortgages may be marked for sale soon.January 29
TCF Financial in Wayzata, Minn., has a new president. The $19.4 billion-asset company said in a press release Tuesday that Craig Dahl had taken on the newly created post.March 24
Bankers at TCF Financial are hoping that a spiffed-up logo and a new advertising campaign will help the Minneapolis-area company burnish its somewhat spotty record with consumers.
The $20 billion-asset company will introduce its logo on Monday, replacing a logo that's been in use since the 1990s. Broadcast and print advertising will accompany the design change.
It's probably time for some new duds at TCF, as it didn't perform well in a recent consumer survey. TCF, which once stood for Twin City Federal, ranked last in J.D. Power's 2015 Retail Banking Satisfaction Study for the Midwest, based on consumer assessments of fees, product offerings and other categories.
TCF typically performs poorly in consumer surveys because its business model includes a large number of checking-account products, said Bob Ramsey, an analyst at FBR Capital Markets. TCF historically generates a large portion of revenue from fee income. In the first quarter, TCF generated about 31% of its total revenue from noninterest income.
"TCF has always had many more smaller-dollar checking accounts than other banks," Ramsey said. "That means that there are more accounts and more customers to have an issue or incur a fee than at other similarly sized institutions."
There have also been high-profile missteps in recent years. In 2012, TCF decided to eliminate totally free checking, although it later changed its mind after customers left in droves. TCF was also one of several banks sued for its policy of high-to-low reordering of overdrafts. (The suit against TCF was dismissed.)
But TCF has taken steps to mend some fences, even before the new logo was developed. The Pew Charitable Trusts this month praised TCF as one of several banks to adopt disclosure boxes that clearly disclose the key terms of a checking account. TCF is also developing new mortgage-service products for its retail branches, is enhancing mobile and online banking, and rolling out enhanced ATMs.
"There is room for improvement and TCF has identified those opportunities and is clearly focused on making the necessary changes," Ramsey said.
Granted, some TCF moves might be a result of management realizing they can no longer heavily rely on noninterest income. During a conference call in April to discuss first-quarter earnings, William Cooper, CEO, said customers know more about how to manage their own money.
"There is a secular trend of people having better information," which helps customers "better manage their money, and not have accidents as often," Cooper said.
TCF did not launch its new logo and ad campaign specifically in response to any consumer surveys, said Geoff Thomas, managing director of customer segments and alternative channels
"The campaign itself doesn't target customer satisfaction, per se," Thomas said. "All of those things go into changing customer satisfaction."
TCF declined to provide the specific amount that it's spending on advertising and the new logo. The amount is "not a meaningful change to our budget," said Craig Dahl, vice chairman.
The new logo is also intended to help unite TCF's disparate business divisions, including retail and commercial banking, equipment finance and inventory finance, Dahl said.
"The lending businesses had developed their own brands and colors, [and] in support of that entrepreneurial approach TCF was fine with that," Dahl said. "With these businesses built out and ready to go forward, we really wanted to have one look, one feel and one approach to the market."
TCF made a smart decision to use lowercase letters, said Chris Nichols, chief strategy officer at $3.9 billion-asset CenterState Bank of Florida in Winter Haven.
"The move to a lowercase logo set serves to mentally underplay their corporate identity, feels more personal and gives the impression they are more aligned with the customer," Nichols said in an email. "It is less 'Big Bank' and more 'friendship' oriented."
TCF also hired the Minneapolis agency Periscope, which developed a new ad campaign using the slogan "In Rhythm With."
"What we're trying to do is capture the essence of everyday life, understanding that a bank is not the most important thing in your life," Thomas said.
The slogan should capture consumers' attention because it's somewhat different, Nichols said.
"I also give TCF credit for taking a risk and using a tag line that is fresh," Nichols said.
Still, rebranding alone won't solve all of TCF's issues with customer satisfaction, said Jim Marous, a financial-services marketing strategist.
"The color of the logo and ad campaign will mean less, and the ability of the organization to prove they are in rhythm with the daily needs of customers will mean more," Marous said.