Banking on a brand
Posted Thursday, June 4th, 2009 by Neil Edwards
Santander has announced that it is to rebrand all of its UK operations.
Bradford & Bingley, Abbey and Alliance & Leicester are to disappear from our High Street to be replaced by Santander, creating the prospect of 3 branches of the same bank in every major town - for the time being at least.
The driver for the change is a strategy to establish Santander as a global brand. Arguably one of the best managed banks in the world and currently 7th largest by asset size, Santander doesn’t yet have the perception of scale of an HSBC or Citibank.
To Santander, the solution is to make the brand ubiquitous. All group business will carry the Santander brand and there will be an ongoing programme of high profile sponsorships and media placements to support it.
But will this be appreciated by the customers?
As we look across the landscape of major banks in the UK, we see a variety of brand strategies in operation.
HSBC, like Santander, favours the monolithic brand approach, branding all of its businesses and marketing as HSBC.
RBS prefers to manage a portfolio of brands that includes NatWest, Coutts, Direct Line, Churchill and Lombard.
Lloyds Banking Group, like RBS, maintains a number of brands, including Cheltenham & Gloucester and recent acquisitions, Halifax and Bank of Scotland.
Barclays, on the other hand, is taking a sub-brand route with Barclays Capital, Barclays Wealth and Barclays Commercial, among others, being allowed to spin off and develop their own brand personalities.
So, why the different approaches and which one is right?
One brand applied to all businesses helps build brand recognition and is infinitely easier and less expensive to manage. There are limitations, however.
HSBC has been eminently successful in creating one of the world’s leading banking groups and its logo can be seen in all corners of the globe. The ability to adapt the brand to suit a particular target market is, though, constrained and being seen as a banking behemoth is not universally attractive. HSBC has had to invest heavily in the global ‘The world’s local bank’ campaign to show it is still in touch with its customers, whoever and wherever they are.
A monolithic brand strategy is fine in the good times, but when part of the business’ reputation comes under fire, the whole brand is affected. Never has this been more clearly demonstrated than in the current banking crisis.
The RBS brand, once hailed as the home of astute and savvy Scottish bankers, now finds itself a symbol of the meltdown of the whole financial services industry. The bank now has to hide the RBS brand under a bushel and promote the individual businesses for fear of derision if it does anything else. Fortunately, the brand strategy gives it this option.
Conventional wisdom says that if the target market, customer promise and proposition are different, then a separate brand should be used.
The multi-brand strategies operated by Lloyds Banking Group and RBS have allowed them to tailor different propositions to suit the different audiences they talk to. The cachet that the Coutts brand has to its high-net-worth clients, for example, would be lost under a re-brand to RBS Private Banking.
A multi-brand strategy also allows these banks to attack their markets on several fronts. A customer that decides against Halifax for a mortgage might still choose Cheltenham & Gloucester, be it through lack of awareness, convenience or some other perceived difference in the product, price or delivery proposition.
This then leaves the Barclays approach, which seems to be neither one thing nor the other and has all the hallmarks of an internal battle being won by certain sections of the business. We understand the breakaway started in Barclays Wealth, where the management felt their association with an everyday High Street bank was constraining their ability to win business. Rather than show the specialism with copy, image style and appropriate media choices, the bank has allowed a sub-brand to be created, which has then had to be replicated through the other divisions in the organisation. The danger of a sub-brand strategy is that, without careful management, the number of sub-brands gets out of control and the master brand becomes fragmented and diluted.
So, is Santander right to re-brand in the UK? We think not. We believe customers would have enjoyed the choice between the 3 businesses and that, in taking the route it has, Santander has given up the opportunity to position each brand for a different market. This would have given more options to consumers and created cross sales opportunities for the organisation.
We have no doubt that Santander will achieve the benefits of its scale, whether it rebrands in the UK or not. Organisations should keep in mind though that scale matters to the City, not to customers, and that analysts are more than capable of working out who owns what.
Posted Thursday, June 4th, 2009 by Neil Edwards
Other Articles In This Category
- Beyond No Logo
This post is co-authored with Jo Allen, Creative Director with The Marketing Eye.Several years have passed since ‘No Logo’, Naomi Klein’s seminal backlash against... read more
13th of September 2009 by Neil Edwards
- Putting the star and bucks back in Starbucks - Starbucks trial brand strategy
Coffee is a regular topic of conversation in The Marketing Eye office. Normally it’s an argument about whose turn it is to make the next one, but now, for a short... read more
2nd of August 2009 by Neil Edwards
- An innocent (and logical) decision
Last week we learned that Innocent Drinks has agreed to sell a 20% stake in the business to Coca-Cola for £30m.The news has parallels with the sale of Ben... read more
18th of April 2009 by Neil Edwards
- Making brand values valuable
Brand values originated as a concept somewhere in the 1990’s when the understanding of branding evolved from being simply an exercise in corporate identity to it... read more
14th of March 2009 by Neil Edwards
- Brands without chains
Jo and I had lunch today with Erika Uffindell, brand guru and founder of leading brand agency, Uffindellwest.While we were speaking, I couldn't help wonder if it is... read more
6th of March 2009 by Neil Edwards
- Irrational marketing for rational customers won't work
Seth Godin is a well respected blogger and talks good sense on a variety of marketing related issues. In his post on The rational marketer (and the irrational... read more
19th of February 2009 by Neil Edwards
- Woolworths re-launch
We wake up this morning, not only to snow, but to news that Woolworths is to be re-launched as an online business.As we predicted in our post in December, somebody... read more
2nd of February 2009 by Neil Edwards
- That was the wonder of Woolworths
The administrator’s announcement of the closure of all 807 Woolworths’ stores shows that no value could be realised from the business as a going concern. The... read more
23rd of December 2008 by Neil Edwards
- Brand value
I was at a talk yesterday, given by Paul Fifield, visiting professor in Marketing Strategy at Southampton University. Paul’s style is witty and down to earth, which... read more
13th of November 2008 by Neil Edwards