KQ Article

Your computer runs fast because of Intel ® inside.
Your coat stays dry because of its Gortex® lining.
Your carpet is stain-free because of its Stainmaster® treatment.
Your money is safe because it’s backed by the FDIC.

For more than a decade, Intel has held sway as the world’s strongest ingredient brand. This is a brand that is so strong that it can be successfully used to promote a “host” brand. Think of how Dell uses its relationship with Intel to sell computers.

Intel has been such a strong ingredient brand, in fact, that it took an economic crisis of global proportions to displace it as the leader.

Today, the Federal Deposit Insurance Corporation (FDIC) might be the most important ingredient brand in the world. We probably have the FDIC to thank for the fact that the economic crisis wasn’t far worse. When all was said and done, this ingredient brand offered consumers sufficient peace of mind to leave their money right where it was, in the banks and credit unions. It’s frightening to  what could have resulted if fear created a widespread run on the financial institutions.
 
While financial services professionals have wideranging opinions about the FDIC, its position of power no doubt demands attention, if for no other reason than to learn something about branding. A surprising number of consumers still aren’t completely clear on how the FDIC runs or from whom it is funded. But that doesn’t seem to matter. It’s the meaning behind the FDIC brand — deposit security — that is the important part. This message seems to come through loud and clear.

The biggest weakness of the FDIC stems from its ubiquity. All banks are required to have FDIC membership (credit unions must be members of the NCUSIF — the National Credit Union Share Insurance Fund), and it has lost its ability to differentiate. Consumers have come to expect the “Member FDIC” sticker to be on a bank’s front door, to such an extent that the sticker became invisible. At least until the market collapsed and people began to fret over the security of their deposits.

Making the right friends
Brands, like people, are judged by the company they keep. What if you leveraged a new ingredient brand or two, ones that your competitors either do not or cannot tout? Maybe it’s your online banking system powered by Cisco, or your branch kiosks powered by Apple. Perhaps it’s your customer service certified by Ritz Carlton, or your fast-moving lines inspired by Toyota.

If your own brand is limited because of hard-to-differentiate products and services, consider the lift that the right ingredient brand might bring. Here are two considerations for choosing yours:

1. An ingredient brand must lend to an overall perception of quality. Yours should be a household name already, with the positive associations already intact. The good ingredient brands are also almost universally trademarked and/ or patent-protected, because somebody recognized their exceptional value long ago.
2. It must enhance functionality that consumers prefer, without creating confusion. Therein lies the beauty of affiliating yourself with an already-established brand. Before you say anything about it, consumers will probably understand how the brand might benefit them. It must also be apparent how it will enhance your core offering. If not, this is probably telling you to look for a different ingredient brand.

In addition to your FDIC affiliation, what other ingredient branding opportunities do you see at your bank or credit union? Chances are good that several exist inside your doors, and that others could be acquired with little effort. But the key is to create them now, before others figure out their need to do the same.