|

|
| |
|
| |
Of concern was the fact that a customer’s higher deposit balance in a bank did not mean higher commitment to that bank.
Banks have not been the only perceived bad guys. Investment firms and insurance companies have also been pilloried by the press, politicians and the public. While such US banks as Citigroup and Bank of America were facing financial woes, they were competing for headlines with the stunning downfall of investment firm Lehman Brothers and the multibillion dollar bailout of insurance giant AIG. That’s just in the US—the same story was being repeated around the globe. The news was so universally bad that just about any financial institution in any country had to duck for cover.
One remarkable effect of the money brand meltdown was the breathless speed at which big brand names were consolidated, split up, modified or even abandoned.
Mortgage lender Countrywide was acquired and renamed Bank of America Home Loans. Bank of America also acquired brokerage firm Merrill Lynch (under duress, as has been widely reported); while the Merrill Lynch name remains in existence at present, its reputation has been battered. Wells Fargo acquired Wachovia, now labeled “a Wells Fargo Company.” Washington Mutual, whose brand name was WaMu, is transitioning to its new name, Chase. GMAC Bank changed its name to Ally, right after GM went bankrupt. The infamous AIG has now become AIU. A newly merged investment firm is calling itself Morgan Stanley Smith Barney. Do you have a headache yet?
Lest we forget, some of these names had considerable brand equity in and of themselves. Brands are a life form of sorts; they have histories and personalities. Seeing a long-standing brand name that stood for something suddenly disappear should be cause for reflection, maybe even concern. But in a crisis of this magnitude, marketers must take extreme action. The operative word is rebranding: Kill the offending brand, call it something else and move on. More often than not, rebranding ultimately pays off since consumers, it seems, have relatively short memories.
Louise Story, writing in The New York Times, says “…with cheery, the-future-is-bright advertising and, in some cases, revisionist branding, companies are trying to put their troubled pasts behind them, or at least out of the public’s mind” (“In Ads, Banks Try the Warm, Cozy Approach,” June 9, 2009.) “Companies have been playing this name game for a long time and getting away with it,” writes Eric Effron in THE WEEK (June 19, 2009). “A rose by any other name may still smell as sweet, but apparently, the same principle doesn’t apply to companies that don’t smell so hot.”
While going from “AIG” to “AIU” may be inconsequential, moving to “Ally” from “GMAC Bank” could have merit. Ally’s slogan, “Straightforward,” is an assurance of the new way the bank plans to do business. TheFinancialBrand.com says “Ally Bank has sworn itself to complete transparency on rates and terms, and says it won’t hide behind legalese and jargon. Ally is promising ‘straight talk’ for customers…”
|
| |
|
As for “straight talk,” some competitors are using the angst over banks to their benefit. USAA, a major financial services organization that largely serves military members, recently launched an integrated advertising campaign bluntly attacking the banks that accepted bailout money. “All financial services companies are not alike,” says USAA president and CEO Joe Robles. “We want current and prospective members to know that we are strong and stable.” Another specialized financial services provider, TIAA-CREF, ran a campaign in late 2008 focusing on “stability during economic volatility.” The company experienced a 165 percent increase in calls to dedicated campaign phone numbers.
For those tarnished financial institutions retaining their brand names, the road to regaining trust may be a long one. Citigroup, for example, was rated the worst of all banks in the Interbrand survey referenced earlier. Bank of America did not fare much better. “Bank of America and Citigroup, with all of the terrible publicity they’ve received, are natural targets,” says Charles Wendell, president of Financial Institutions Consulting (“More Clients Ready to Switch Banks as Trust Wanes,” American Banker, May 18, 2009). “Both have image issues that they have to deal with and concerns not only about their viability, but also their commitment to the markets they serve,” Wendell says.
For those tarnished financial institutions retaining their brand names, the road to regaining trust may be a long one.
That may be why ten large banks were falling all over themselves to go public with their names as soon as the US government announced it would permit them to exit the TARP (Troubled Asset Relief Program). Morgan Stanley, American Express, JPMorgan Chase, Goldman Sachs and six other financial giants “quickly acknowledged the decision in a barrage of press releases on Tuesday morning” (“10 Large Banks Allowed to Exit U.S. Aid Program,” The New York Times, June 10, 2009). While these banks will be repaying their federal loans, the larger question is whether that will be enough to repair the damage to their brands.
Clearly, financial institutions are shell-shocked. “Industry giants like Citigroup are reviewing their public image and trying to keep a relatively low profile,” Story writes in The New York Times. “Many are reluctant to be seen as spending lavishly, on ads or anything else. [They are] trying to clean up their images in other ways, such as media relations and philanthropic efforts.”
In the mean time, the financial crisis among giants has actually bolstered the image of smaller institutions. The First National Bank of Orwell, Vermont’s smallest bank, had one of its best years in 2008, while the tiny Bank of South Carolina saw its highest growth ever in October 2008, reports The New York Times. “As bigger banks fail or merge, some community banks are absorbing growing numbers of depositors, while strengthening community ties and championing their conservative approach to lending,” writes Katie Zezima (“Vermont Bank Thrives While Others Cut Back,” The New York Times, Nov. 8, 2008).
“Smaller yet established banks and brokerages focused on the community or local region have less of an issue here when it comes to their brand,” says Dan Gershenson in a FastCompany blog (“Will small bank brands on Main Street seize the day?,” Nov. 4, 2008). “…by putting themselves out there as a voice of strength in a climate of turmoil, it reminds and reinforces the stability and consistency that these banks have. THEY still have the public’s trust by and large…”
So what should the big money brands do going forward? John Bell, head of Ogilvy’s 360° Digital Influence team, has this specific advice for them: Discontinue traditional advertising and instead help educate customers about personal finance. Communicate with customers directly via blogs and social networks. Encourage input from customers and react to it publicly. And build a trust-based community around the institution (“5 Steps: How Banks Must Regain Trust,” SocialMediaToday.com, Sept. 22, 2008). What that really means, Bell says, is “no more marketing as usual. The bank that embraces a smart use of social media and digital marketing will start to get trust because ‘they earn it’ – for real.”
Still, it is likely to take more than social media alone to make the big money brands recapture their luster.
[29-Jun-2009]
|
|
|
| |
|
| |
Barry Silverstein is a freelance writer/marketing consultant and co-author of the McGraw-Hill book, The Breakaway Brand.
Other articles by this author
|
| |
|
|
|
|
 |
|
|
|
|
Copyright © 2001-2009 brandchannel. All rights reserved.
|
|