Local Business Marketing

How to get people to buy from your local business when you offer much the same basic service as your competitors.

I guess if you mention the name Wallander to most people in the UK they will think of the existential Swedish detective, played on TV by Kenneth Branagh for the past five years or so, even though this character has been famous in Sweden for decades. For my US readers I’m not sure if it will register with you at all, but good cop shows seem to travel pretty well these days, and this character has been described as Sweden’s biggest cultural export since ABBA, so who knows? There aren’t too many existential Swedish cops on TV so you might argue that, as a product, this television series is very well positioned and that is my theme for today.

I went to a networking event earlier in the week and met a bank manager setting up a new branch locally to where I live. When he mentioned the name of the bank to me I immediately said “church spire principle”. I knew very little about this bank, other than it was Swedish, and it identified each branch’s target market as what it could see from the top of a nearby church spire. A local business marketing strategy then, but what is so different about that? Aren’t all local branches of banks focused on local customers? Well, from my personal experience, where once I used to be able to go into my bank and talk to people I knew about stuff, most high street banks now seem to have centralized a lot of customer contact, rather foolishly to my mind. It has now become something of a bête noire of the British Elite class (to borrow the BBC’s new definition of the top class in the UK) how difficult it can be to communicate with their bank about their money.

As merely a casual observer, I’m certainly no banking expert (or is that concept oxymoronic these days?), but Handelsbanken’s wonderfully evocative and succinct definition, of its branches’ market reach, is, like all great marketing communications, just a reflection of a more profound strategic idea, that of decentralization. For that, we have Mr. Wallander to thank. No, not the sullen detective, but a gentleman called Jan Wallander who became Handelsbanken’s CEO in the early 1970’s and began to build the decentralized organization that it is today: one that values decentralization and profitability rather than volume growth.

Oh, what a different world we would live in today if the rest of the banking community was so wise and they hadn’t gone off chasing scale in order to pump up their egos, bonuses, and pension pots, in the rather cavalier way it would seem they did, following the “flawed business model” of HBOS and many others. Of course, these business models are only considered to be “flawed” now, not at the time when the economy benefited greatly, for a while, from the export strength of this industry apparently led by magicians. Sadly (for many of us!), these financial sorcerers were naked and no one, not even the regulator, had the courage to say it at the time, though they are making a meal of it now.

Local Business

Anyway, the amazing thing about Handelsbanken is not necessarily that I knew about the church spire idea, but that, as a bank, it was positioned in any sensible way at all. What I was getting around to saying was that Handelsbanken’s positioning is a wonderful example of clear and consistently followed strategy driving an equally strong market position that combines a quaint folksy “back to basics” local banking vibe with good common sense, and perhaps even a wee hint of Christian ethics emanating from the “church spire” like a call to Sunday service. But why don’t bigger utility-type brands seem to understand positioning? Why do they all seek to copy each other (almost as if they weren’t in competition at all!) and not even try and develop a differentiating idea, even if it isn’t strongly linked to an underlying strategy like Handelsbank? There is nothing to choose between most banks, supermarkets, or utilities, but the ones who have half an idea about market positioning, and who then do something about it, are the demonstrable winners.

It would be fair to say that HSBC had a good thing going with “the world’s local bank” but it doesn’t seem to be pushing that as much these days. Other banks are just anonymous and failed institutions these days so Handelsbanken’s slow growth strategy, over the past 10 years, has been perfectly timed; it now has a great opportunity of mopping-up the latent demand for a return to local banking in the UK.

Supermarkets are another group of powerful businesses that don’t seem to “get” positioning either. Sainsbury did have Jamie Oliver, as the personification of its brand, for some years but then fell out with him, and the only other notable marketer in the supermarket space is Morrison: if you ever hear a Morrison spokesperson speak he or she will say the word “fresh” in every sentence. It does have both a good story and good market communications compared to its competitors. Then, of course, there is British Gas: I can’t tell you how much more amenable I have become to buying from it since it aligned its marketing messaging behind images of us all living on our own little planets that it keeps warm and secure.

My only point is that market positioning is a greatly underused way of creating a competitive advantage. If in doubt, about what to do in your business, just think “Wallander” either the bank or the detective, it doesn’t really matter: they are both positioned brilliantly.