Master brands vs brand portfolios: the jury seems to be in

It’s a battle that’s gone on for almost as long as I can remember.  In the blue corner, Barclays and HSBC – big high street banks generally believing that it’s better to invest in building one brand than lots.  In the red corner, supported by the majority of professional brand and marketing people, RBS and HBOS, big high street banks generally believing that it’s better to invest in lots of brands, each standing for a particular proposition to a particular target market.

For years, even decades, the battle ebbed and flowed.  The master branders argued their approach was easier and cheaper to implement;  the brand portfolio managers replied that their approach added more value in the long run.  You paid your money and you took your choice.

However.  Those of us supporting the portfolio approach reluctantly have to admit that we seem to have lost.  Our two champions are, if not dead, both very, very badly injured, while our two opponents seem remarkably perky, considering.  We could try what I think is known in the Latin-speaking trade as the “post hoc sed non propter hoc” defence, which basically means that RBS and HBOS may have fallen over after adopting a multi-brand strategy, but that doesn’t mean they fell over because of it.  But the terrible sight of our hideously mutilated champions has knocked the stuffing out of us.  For the time being, at least, it feels like we’ve lost.�

I wonder if my mother will be proved wrong this time

As a small boy (a difficult concept for those who know me now as a far-from-small bloke) I didn’t much like going to other children’s birthday parties.  When it was time to go, my mother would find me in my bedroom, dressed in little bow tie and polished sandals, white-faced, upper lip trembling, and maintaining a vice-like grip on bedpost, bookcase or radiator.

As she gently unprised my fingers, she always said the same thing:  “Don’t worry, you’ll like it when you get there.”  And she was usually right.

Tomorrow I’m off to Harrogate for the Building Societies Association conference, and it’s probably just as well that there isn’t a radiator or bedpost in this office.  I am rather dreading it.  Nothing personal:  just that the poor old building society movement does seem, if the papers are to be believed, to be in the direst of dire straits.

If I say it myself (which, obviously, I do), I have a brilliant presentation for them.  It’s all about new ways that building societies can use the Internet to develop their businesses.  But I have a terrible feeling that in what I fear will be a deeply downbeat atmosphere, it’ll strike completely the wrong note – a bit like turning up to sell long-term regular savings plans to prisoners on Death Row.  What’s more, it’s a two-hour session, so if it becomes clear after the first couple of slides that my own personal zeitgeist is the diametrical opposite of theirs, it’ll be a long haul through to Summary & Conclusions.

Oh well.  I know what my mother would say.  And maybe, just maybe, she’ll be proved right again.

Now, where are that bow tie and those polished sandals?�

Didn’t I tell you people can become a trifle agitated about financial matters?

If there’s one point about money, and communications about money, that I’ve made more often than all others put together, it is that in real life people don’t find these things “unengaging” or dull.  As I’ve said a thousand times, money engages people passionately.   It’s just our stuff – communications from the financial services industry - that renders them comatose.

You may say that this is a bit of a cheat because the issues on my mind are to do with other people’s financial misbehaviour, which will always be an infinitely hotter topic than our own needs for more investments or insurance.  But in the next million years, I don’t think there’ll ever be a better double-act in support of my contention than Fred the Shred’s pension, immediately followed by the House of Commons’ expenses.

What’s that disagreeable aroma? Sour grapes, probably

Nothing tests the fair-minded objectivity of this blog more than the launch of new campaigns resulting from pitches that we lost.  Well, nothing except maybe the launch of campaigns resulting from pitches which we didn’t even take part in, or know about.

The new Henderson/New Star merger campaign, which has kicked off today in the financial trades, is a case in point.  Would you believe it, it’s the Dream Team thing again, with visuals suggesting that this merger is the metaphorical equivalent of bringing that old drama queen Salvador Dali together with that slightly younger drama queen Andy Warhol, or that grumpy old bastard Bob Dylan together with that grumpy and tragically deceased bastard John Lennon.

I’ve been seeing junior teams putting forward ideas about great partnerships for about 100 million years, so you can imagine my lack of excitement at seeing another one.  What’s more, I could be wrong but I don’t think this one’s much good.  (For one thing, there are no captions to tell us who the featured celebs are, and I do wonder how many IFAs will actually recognise a heavily-cropped picture of Salvador Dali.) 

But this sort of carping, mildly enjoyable as it may be, completely misses the point.  The point is that yet again, those clever chaps at the agency that used to be RPM3 but is now Libertine have won a big investment account by the simple expedient of finding an extendable analogy that is hugely flattering to the egos of the fund managers:  Artemis = brave and gallant hunters, Resolution AM = caped and musclebound superheroes, and now Henderson New Star = artistic geniuses. 

When they used this trick for the second time, with Resolution, the contrarian in me made an appearance in a piece saying how much more fun it would be to produce a campaign based on an extended analogy about deeply unheroic figures like school dinner ladies, or traffic wardens.  Very funny.  But seeing just how well this simple trick works for Libertine, I think it must be time that I stopped carping and started copying.  Whenever a major fund manager next remembers to put us on the pitch list, that is.�

Next wave of optimists spotted on horizon

To my certain knowledge, there are six major foreign financial institutions planning major launches into the UK IFA market over the next few months.  (I wouldn’t be at all surprised if there were at least as many more flying in under my radar.)

Which, given the current poor performance and clouded outlook of that market, is a bit of a surprise. 

It’s true that on their way in, they’ll meet one or two representatives of the last wave on their way out.  The Hartford, of course, are clearing their Canary Wharf desks and taking their personal effects back to Connecticut.  And the UBS-ites involve in their short-lived wrap business are pretty much a memory now, and from the point of view of the IFAs who supported them not a particularly happy one.   But the new incomers, while realising that previous experience does mean that demonstrating long-term commitment is a vitally important challenge, are otherwise not disconcerted.

Are they right to have such confidence?  Impossible to say.  On the downside, the market is hardly under-served:  IFAs have certainly hundreds, and I’d say very likely getting on for a thousand, product providers keen to do business with them.  And everyone says that the outlook for IFAs themselves is extremely bleak, with up to a half of them likely to go out of business in the next five years through a combination of business pressures, regulatory pressures and simple old age and infirmity.

On the upside, though, IFAs do still have a remarkable stranglehold on the UK affluent and high net worth market – for people with money in this country, they are pretty much the only game in town.  And although they’re served by a huge number of providers, at every level the overall standard of service remains poor, and extraordinarily easy for new entrants to beat.

It’ll be interesting to see.  Probably a mixed result, one suspects, with a couple of the newcomers succeeding triumphantly, a couple staggering bravely on while underperforming against all their targets, and a couple heading rapidly back to their equivalents of Connecticut and Zurich.  I wonder if the winners will be the ones we’re working with.

Why are everyone else’s problems easier to solve than mine?

As I mentioned, on Monday I was at a conference attended by all the top mortgage intermediaries.  Their industry is in dire straits – adviser numbers are down by getting on for half on where they were two years ago – and many were looking desperately for strategies that offered even the faintest rays of hope.

Although the exact answer might vary from firm to firm, it seemed to me that the general principles were blindingly obvious.  There are two basic problems:  a) very few new customers are coming in through the door, and b) even when customers do come in, mortgage funds are so tight that it may not be possible to find a loan for them.  On the face of it, both these problems are eminently solvable.  As far as the lack of customers is concerned, most firms admit that they’re absolutely hopeless at maintaining and developing relationships with their existing customers, and almost equally hopeless at pro-actively going out and looking for new customers: they need to acquire both of these skills rather quickly.  And as far as the lack of mortgage funds is concerned, then the answer is that as well as mortgages it’s necessary to advise clients on a broader range of needs, either as well or instead.  (Fortunately, the mortgage stands right at the centre of clients’ financial and practical lives, connecting directly and immediately not only to a huge array of other financial products and services but also to a huge array of home-related issues:  most of those present were, I think, genuinely surprised when I suggested they might quite easily extend into utilities brokerage and advice.)

Sorted.  Obvious.  But we’re having a tough time at Tangible Financial too – being a marketing services firm specialising in the financial services industry is also a tough place to be at the moment.  So what are the equally obvious answers in our case? 

Trouble is, to me, the equally obvious answers look problematic and unappealing.  You might say, for example, that we should forget about financial clients and look for clients in other sectors who have more money to spend – sectors like maybe IT and pharmaceuticals, for example.  But we know nothing about IT or pharmaceuticals, and we have no contacts or networks in those worlds, while lots of our competitors know a great deal and own densely-packed address books:  it doesn’t sound like a winning move.  Or, there again, you migh say we should broaden the array of services we offer to the financial world.  Why don’t we do public relations?  Or event management?  Well, mainly because none of us knows anything about these things, and making a lot of expensive new hirings to plug the skills gaps feels awfully brave at the moment.  And, again, there are plenty of existing PR or event management companies who would no doubt defend their patches pretty fiercely against incomers.

Which isn’t to say that there’s nothing we can do to brighten our outlook – there are things, and we’re doing quite a few of them.  But the advice that might look obviously right to an outsider looks obviously very dodgy to me.

I could well be wrong.  Perhaps the advice is right, and I’m just being a silly old stick-in-the-mud.  But one thing’s for sure – my own dubiousness helps me understand the similarly dubious expressions on those mortgage brokers’ faces at the end of my talk on Monday.  �

Signs of the times, part 687

Yesterday I spoke at an event for mortgage intermediaries, rather grandly entitled The Strategy Summit.  It took place in Luton (well, actually, to be fair, at the genuinely impressive and glamorous Luton Hoo hotel, but still Luton), and attracted six sponsors and about 80 participants.

Not bad.  Except that apparently, two years ago, the same event was held in a hotel in Dubai, where those who attended still remember with some astonishment paying £40 for a beer.  Despite the eye-watering prices, there were 30 sponsors and 250 participants.  And I don’t get the impression there was too much holding back when it came to the beer. 

April 22nd: obviously not a day for high awareness of meerkats

I quite like that piece I wrote back on April 22nd about the way that most of us now understand that brands are far more about personalities than they are about propositions, but in hindsight I must have been in a meerkat-unaware mood that day.  The piece would have been more topical, and probably easier to understand, if I’d built it around Compare The Market/

Anyone who’s worked on low-cost direct insurance advertising is sick to the back teeth of grappling with propositions – desperately, and almost always unsuccessfully, trying to get across factual messages that no-one cares about or understands.  (Back in our MORE TH>N days, the team actually aged visibly through the stress and misery of trying to create a 30-second execution that clearly and engagingly communicated the benefit of a no-claims discount guaranteed for life.  We never managed it, and neither has anyone else.)

When undergoing such torture, an extra dimension that makes it even worse is a deep-seated instinct that it’s all a complete waste of time – that provided people understand you’re one of those cheap direct insurance firms, the only other things that matter are that they should remember you and like you.

Up to a point it’s been possible for a while to prove the point about awareness and recall.  There are some correlations between these attributes and response levels, which is why brands with hatefully unforgettable advertising like Elephant and (usually) eSure keep on doing what they do.  But until Compare The Market, it wasn’t really possible to prove how incredibly much more important likeability is than any tiresome generic left-brain micro-proposition.

I can’t share them with you, but as a judge in some recent awards I’ve seen the stats on the performance of Aleksandr the Meerkat’s campaign.  They’re brilliant.  And – at least in the launch advertising that’s responsible for this performance – there is absolutely no trace of a proposition beyond the generic (“cheap insurance”) at all.

As I said on April 22nd, it’s really tiresome the way the proposition freaks simply will not stay dead.  Despite all the evidence that except on the very, very rare occasions when you have a killer USP it’s personality that matters, they pop back up every couple of years beating us around the left side of our heads with their boring messages.

Speaking for myself, from now on, every time they do so, I shall fight back by brandishing a meerkat.    

At last, an undodgy Vanguard

Over the years I’ve come across quite a few products branded Vanguard, and they’ve all been a bit dodgy.

There was the UK aviation industry’s last mainstream propeller passenger plane, the Vickers Vanguard.  This was a bigger and roomier version of the highly-successful Vickers Viscount, but it was launched too late, in 1959, by which time the market had moved over almost entirely to jets.  Apart from the touchingly loyal local player, British European Airways, who bought 44 of them, Wikipedia says that the plane “was widely ignored” by the market.

At the same time, car-buyers were also doing a pretty good job of ignoring the Standard Vanguard, a medium-sized saloon car made by the Standard company from the late 40s to the early 60s.  During that time it went through several very different model variations, but two things they had in common were that a) they were all crap, and b) none of them sold well. Together with other equally dismal cars made by Standard during the same period, they wrote the death warrant of the company, which was subsumed into another now long-vanished brand, Triumph, in 1963.

Vanguard cigarettes were another flop.  Launched in the US right at the end of the 50s, they avoided all the health problems of tobacco by the simple expedient of including no tobacco.  This also meant they included none of the things people liked about cigarettes, like a) the tast of tobacco and b) the presence of nicotine. Later, around 1980, the Vanguard brand was launched in the UK.  I think I bought some.  I think they still didn’t contain tobacco, and were still disgusting.  They failed for a second time.

Vanguard Storage Services hasn’t failed, but it’s that slightly troubling self-storage place that you see when you drive out on Western Avenue which has a tower in the middle of the building on top of which the owner likes to put things like old RAF jets on their last stop before the scrapheap and models of London tourist attractions.   This is all very droll, but you do wonder a bit a) how many accidents are caused by rubbernecking motorists and b) whether this rather bizarre form of advertisement actually generates any self-storage business.

But things are about to change.  Unless I am very much mistaken, the UK market is about to see the launch of the first undodgy Vanguard.  The giant US retail investment house, famous for selling tracker funds at incredibly low prices, is widely rumoured to be gearing up for a launch that’ll represent the biggest US invasion since the run-up to D-Day.

To be honest, I think that if they play their cards right (which is, admittedly, a very big “if”), the silly, lazy, hopelessly fragmented UK industry will be sitting ducks.  I remember working 25 years ago on the launch of McDonald’s into the UK market:  it was said that when a senior team from McDonald’s in the US were taken on a fact-finding tour of the grim Wimpy Bars, Golden Eggs and Kardoma Coffee Houses that made up the UK fast-food industry of the time, they angrily demanded that their guides stopped showing them all the rubbish competition and took them to see the good places too.    The guides explained that this was, honestly and truthfully, as good as UK fast food providers got, and big smiles slowly spread across the Americans’ faces….

Assuming they’re able to avoid the stupid and sometimes disastrous mistakes that American corporations often make when they launch over here, it’ll be nice seeing an undodgy Vanguard for a change.  But I do rather fear for large chunks of the domestic competition, though. 

The call I’ve always dreaded most. (The business call, that is.)

Let’s not even think about the personal calls we dread.  But I’ve often said that for me, the business call from hell is the one from a big High Street bank – Barclays or NatWest would be the worst – to tell me that without the need for any kind of pitch, we’re being appointed to work with them on developing and implementing a whole new brand strategy, and please could we start at once.

Why is it the call from hell?  Simply because I’ve never had the faintest idea how I’d set about doing it.  Assuming – and on the basis of the big banks’ track record over the last 30 years or more it’s a pretty safe assumption – that they won’t be willing to consider changing anything at all significant about the way they do business, the reality in this situation is that you’re facing a vast herd of very grubby pigs equipped only with a large box of lipstick.  Even if you manage to achieve some semblance of attractiveness in the mouth region, there’s still an awful lot of the pig that’s quite unaffected by your ministrations.  And in any case, it’ll take the pigs next to no time to lick the lipstick off, as it were, and everyone’ll be right back where they started.

On the other hand, just think of the fees….

Fortunately, it’s a dilemma that I’m unlikely ever to face, not least because of my habit of writing blogs like this one. But that doesn’t stop me thinking about it, and it is clearly apparent that if it’s a brand challenge that’s a bad dream at the best of times, then just at the moment it’s a complete nightmare.

I was bemoaning the vacuity and blandness of NatWest’s grim “helpful banking” campaign the other day.  By chance I was bemoaning while in the company of a Yorkshireman, who – unsurprisingly, those who know Yorkshiremen would say – was in the mood for an argument.  “By gum, lad,” he said.  (Of course he didn’t.)  “What the heck dost thou expect them folks at ‘ead office to do about it?”  (Enough of the silly Yorkshire accent.)  “Up here we treat them with a mixture of fury and contempt – the contempt that most people in the country feel for the way they’ve run their business, with some extra fury thrown in because everyone in my area knows someone who’s now out of work because they called in their loans and pulled the plug on two perfectly good food-processing plants.  Just what kind of brand advertising would work for NatWest just now?”

I saw his point, and no doubt you see mine.  Some years ago, a regional American bank that was rescued from near-bankruptcy relaunched itself with a famous advertising campaign built around the strapline:  “We work harder.  We have to.”  But leaving aside the question of whether this kind of backward-looking, problem-acknowledging approach makes sense (and if so, for how long), I’ve already made the point that approaches to the brand strategy that actually require any kind of positive behavioural change can be ruled out. 

(Actually, NatWest and other RBS staff may “work harder,” but only in two rather unhelpful meanings of the phrase:  a)  they may work harder at thinking up schemes to take money from the pockets of their retail customers, since retail is one of the least problematic and most profitable bits of their crumbling empire just now, and b) some staff may have to work harder because of cost-saving headcount reductions, but if so this would be working harder in order to stand still, or perhaps not go too far backwards, rather than to do better for the customers.)

No, I’ve no idea what you do with it at a brand level just now.  In fact, I had no idea before, and I have even less than no idea now.  (There’s a “what do you call…” joke about deer, isn’t there, that I could have used in this bit.) 

I’d better just go on hoping the phone doesn’t ring.  I don’t think it will.