A few months ago I wrote a post about the new Sun Life Insurance advertising campaign in Canada. I knew I didn’t like it. The post got some traffic, including a thoughtful response from the VP of Marketing of Sun Life, who suggested that the brand positioning was “trust”. At the time, I responded that trust wasn’t a positioning; it was the result of a long term relationship with the customer. But I was vaguely unsatisfied with my reasoning about why “trust” was such a bad positioning for the financial services industry. After re-reading Douglas Holt’s book, Cultural Branding, I think I know why. Bear with me as I review a bit of recent economic history.
In the early 1980s, government and business realized that the upcoming wave of retiring baby-boomers was going to create significant pension costs. First, industry changed from defined benefit pensions to defined contribution pensions, shifting the risk of retirement investment from the employer to the individual. Then, recognizing that pensions were not going to be the solution to every person’s retirement needs, government, with the encouragement of the financial industry developed RRSPs and 401Ks and other tax incented retirement savings vehicles. The argument put forward by government and industry was that individuals could now have more control over their futures, and take on an appropriate level of risk based on their personal circumstances. This argument was based on several assumptions. That most people had enough financial literacy to make these decisions themselves, that they had access to enough information to make these decisions wisely, and that they had the time to spend on these decisions. A convenient outcome for the financial industry was an influx of trillions of investment dollars as consumers bought into the idea that they would become wealthy if they just invested in the stock market.
All went well for a few years, until 1989 with Black Friday. The market recovered within a few short years, so most people shrugged it off. When the Dot Com bubble burst, the US Fed intervened with very low interest rates to stimulate the economy, and we moved on, into another eight years of growth. And then the sub-prime mortgage melt-down occurred. The developed world took a beating (some more than others), massive numbers of middle class investors lost their jobs, their life savings and their homes.
At the same time, they witnessed the creators of much of this chaos, the executives of the financial industry, government and manufacturing getting richer, not poorer. They watched as the titans of the financial industry received bailouts in the billions, who then used these bailouts to pay retention bonuses to the financial geniuses who created this mess. Very few of them lost their jobs, and when they did, they received large payouts to leave.
Meantime, even those who kept their jobs and their houses, look at their savings with disbelief. After fees and commissions, very few of us are actually making any money in the market.
Now to my point. We feel betrayed. Betrayed by government, manufacturing and the financial industry. They shifted risk to individuals who did not have the skills to invest, in order to reduce their own costs. They then took trillions of dollars with the implication that everyone could get rich, and charged obscene fees and commissions, taking no risk themselves, pilling up millions each of bonuses. And when it gets bad, they shift the disaster to the tax-payer, through bailouts. They got rich, and we paid.
Let me be clear. Sun Life, and most financial companies in Canada, did not participate in this “bad behaviour”. However, whether we like it or not, they’ve been tainted with the same brush. As a result, any positioning about trust in the financial services industry is not only unbelievable, but, unfortunately, might be toxic.
What has this got to do with a TV ad positioning an insurance firm as “trustworthy”? You earn trust. And right now, the whole financial services industry is tainted with betrayal. An insurance firm positioning itself behind trust is like putting lipstick on a pig. It doesn’t make the pig any prettier.
Trust is earned. Trust is not a benefit, feature or value that a brand provides. Trust is the result of consistent delivery of a benefit to consumers, who over time develop a trusting relationship with the organization that sells a brand.