#OutstandingBrands2021: The art of building strong brands, brand value and the Ecobank story

Dan Sackey, Ecobank MD

Branding is a marketing jargon that has, largely, been misconceived but often referred to and used by people, institutions, destinations, businesses across industries and, indeed, nations. The term has, over time gained popularity and wide usage, albeit sometimes wrongly.

Despite having many definitions, branding may be conceived as the marketing practice in which an organisation creates a name, symbol or design that easily identifies and differentiates it from others.

Branding, in a nutshell, is who you are. According to entrepreneur.com, “your brand is your promise to your customer. It tells them what they can expect from your products and services, and it differentiates your offering from that of your competitors. Your brand is derived from who you are, who you want to be and who people perceive you to be”.

With this, it is important to note that there are many parts that are brought together to develop a brand, including your marketing communications or promotional mix (advertising, sales promotions, public relations and personal selling), merchandising, customer service, corporate reputation, image, etc. All of these elements work together to create one unique and identifiable brand.

A brand helps to build and leave memorable impressions on the minds of its audience, making it possible for people to know what to expect from it. Branding, among other things, can change how people perceive a company or a product, drive new business, increase the level of awareness, improve employee pride and satisfaction, create trust within the marketplace, etc.

Branding has become a top management priority for most organisations because of the realization that brands today are valuable intangible assets. Strong brands are said to contribute substantially to the bottom-lines of companies. In view of this, branding principles are being applied to, virtually, every facet of life, where customers can exercise their fundamental rights of choice over competitive offers. The long-term effect of nurturing effective brands is the ability to build brand equity.

Brand equity refers to the value premium that a company generates from a product with a recognizable name, compared to its generic equivalent. Companies can create brand equity for their products by making them memorable, easily recognizable, and superior in quality and reliability. Mass marketing campaigns also help to create brand equity for organisations. Farquhar, (1989) defines brand equity as; the ‘added value’ with which a given brand endows a product. Other researchers and practitioners have subsequently examined brand equity from two separate perspectives; financial-based and customer-based. Financial-based brand equity is the financial value of the brand to the company, while customer-based brand equity is the value of the brand for the customer. High brand equity is considered to be a competitive advantage since: it implies that firms can charge a premium; there is an increase in customer demand; extending a brand becomes easier; communication campaigns are more effective; there is better trade leverage; margins can be greater; and the company becomes less vulnerable to competition. Ultimately, high brand equity generates a differential effect, which leads to better brand performance, both from a financial and a customer perspective.

Knowing the importance of strong brands and branding, we proceed to examine one of the most admired financial services brands in Ghana, Ecobank. Ecobank, the youngest of Ghana’s four tier-1 banks celebrated its 30th anniversary only last year, having started operations in 1990 as a one-branch wholesale bank, providing merchant banking services to corporate and institutional customers. Ecobank Ghana is a subsidiary of Ecobank Transnational Incorporated (ETI), a bank holding company with presence in over 33 countries across Africa. The bank acquired a universal banking license in 2003 and listed on the Ghana Stock Exchange in 2006. Ecobank currently has 67 branches, over 200 ATMs, 2,200 Ecobank Xpress Points (serving as agents) and 15,000 accredited Merchants at EcobankPay points, who provide GhQR, Mvisa and MasterPass QR code payment solutions to customers. The bank has segmented its markets into; Corporate, Commercial and Consumer Banking, providing each market with tailored financial solutions in a timely and efficient manner.

With this structure, Ecobank has consistently grown its incomes and balance sheet, becoming Ghana’s number 1 bank from 2012, a position it lost to GCB Bank after the latter acquired two defunct banks in 2017. Ecobank, however, reclaimed its rightful number 1 position, as it closed the year 2019 as the biggest bank, growing customer deposits 28% to GH¢9,728.76million, and total assets 27% to GH¢13,228.79million. The bank’s loan book, unsurprisingly, grew by 30% to GH¢5,380.31million with shareholders’ funds increasing to GH¢1,784.31million (35%). The bank also closed the period with total revenue growth of 21% to GH¢1,585.65million and profit before tax 27% to GH¢642.49million

Ecobank’s third quarter financial results for 2020 are even more interesting, as the bank maintained its consistency in financial performance, compared to its peers in the tier-1 category of banks. Ecobank grew its total revenue by 20% to GH¢1,347.44million and profit before tax went up 16% to GHS556.58million. With respect to balance sheet, Ecobank closed the period growing customer deposits 18% to GH¢10,765.26million, total assets by 23% to GH¢14,667.57million, while loans and advances grew by 1% to GH¢4,675.73million. This low rate of growth in the bank’s loan book is attributable to the adverse effects of the COVID-19 pandemic on businesses. Finally, the bank’s shareholders’ funds increased by 23% to GH¢2,078.23million.

From the foregoing analysis, Ecobank stands tall in terms of consistency in financial performance, even as the bank is only 3 decades old, compared to its older peers. Tracing the bank’s growth trajectory over the past 30 years reveals exciting results with key achievements worthy of attention by analysts and for emulation by other institutions. The reasons for such consistent and unparalleled performances cannot be farfetched, as the bank combines superior technology with excellent service quality, leading to higher rates of customer satisfaction and consequently, customer loyalty.

Ecobank’s wide array of relatively inexpensive products delivered via non-brick and mortar channels enables customers to access banking products and services conveniently. This has endeared the bank to the hearts of its many patrons. The sheer superiority of the products and services the bank offers, and the exemplary convenience with which they are offered has naturally attracted more customers to the bank, enabling it to grow both deposits and loans substantially.

The bank currently boasts of over 700,000 consumer banking customers who patronise traditional banking services across its 67 branches in Ghana, as well as over 1.5million patrons of the Ecobank Mobile App. The unique ability to channel over 80% of all customer transactions over its digital banking platforms is highly commendable and contributes substantially to the cash-lite agenda of the nation. The introduction of Ecobank Xpress Account, an instant online bank account that can be opened and operated on customers’ mobile phones without the need to visit the branch, is indeed a gamechanger, and has helped significantly in growing the bank’s customer base.

To be sure, Ecobank appears to be enjoying the combined benefits of both customer-based brand equity as well as financial-based brand equity. The former is evidenced in the ready market acceptance of the bank’s new products and services, while the latter shows in the consistent sterling financial performance over its three decades of existence. That is the power of branding.

Afterall, it is common knowledge among researchers and Marketing practitioners that branding is not a one-time event. It’s, indeed, not a fad. Strong brands are built over time and require steadfast commitment to ensure long-lasting success. Let’s keep our eyes on this beautiful and carefully nurtured brand, Ecobank.

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