Break with peers for a competitive edge

Differentiate yourself and grow market share and accolades

Compete by setting yourself apart

Community banks, credit unions and other smaller financial concerns are not to blame for the current financial crisis, but are nonetheless suffering from regulatory and public perception consequences. The lessons these organizations are slowly learning may well prove invaluable for all small and micro enterprises.

Conglomerates and their trade groups have managed to hoodwink many unsuspecting businesses into believing that what is good for the supposed noblesse oblige is good for all. All indications, however, suggest the opposite is true. The U.S. Chamber of Commerce and other trade groups have taken positions that bolster the abilities of your competitors to impair your operations. A 2009 study by The Independent Community Bankers of America (ICBA) and Aite Group, LLC, concluded:

“Despite most community banks’ lack of participation in subprime lending, the implications of larger bank activities have begun to trickle down. Of community banks surveyed, 73 percent have seen an increase in their traditionally low loan delinquencies and charge-offs since the start of the crisis. The significant growth in quarterly net charge-offs for the industry is driven primarily by the largest banks.”

Towards a two-tier solution

Tell legislators, customers and prospects certain trade organizations do not represent your concerns. Distancing yourself from the groups that betray your interests is only the beginning of truly achieving market success.

As has been said in this column before, there are only two ways to compete — price or differentiation. It is difficult to beat the conglomerates on price when they have access to superior tax loopholes and the advantages of cheap overseas call centers, software support and manufacturing.

This leaves differentiation. Most local organizations believe their strengths are “personal service” and “community support,” but these messages are often too vague to offer much benefit. These attributes also don’t properly differentiate you from your similarly sized rivals.

Successful marketing doesn’t begin with advertising these differentiators, but rather in identifying them and creating an innovative strategy. You and your in-house colleagues may be too close to your organization to see the multitude of other advantages your organization undoubtedly offers or could offer. Bring in your advertising agency or other outside marketing help early to identify, name, position and promote those products and services that truly set you apart.

If you must purchase pre-packaged or “canned” marketing materials, be sure to negotiate the right to modify and position them in such a way that differentiates you from your competitors using the same offerings.

Finally, while compliance with regulations is of utmost importance, challenge your legal advisors to adopt friendly and easy-to-understand language that separates you from the hucksters.

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