Lights but no action

Rebranding leaves the public cold, unless it really means something, says Iain Murray

It is a fond conceit of the corporate world that we, the public, hold their brands in affection. Part of the blame for this lies with the media for its casual use of the term ‘much loved’. How often are we told that a minor telly celebrity whose face we would rather never see again is ‘much loved’? Or even worse, that he or she is a ‘national treasure’? When the public is assumed to be besotted with every passing nonentity, who can blame company bosses for claiming a share of the devotion?

It’s a delusion that, like so many others, leads to excess. Once the corporation chieftain is convinced of his brand’s seductive power, it is but a short step to slapping on a thick layer of make-up with the aim of rendering it irresistible. Better still, why not go in for a complete facelift, and blow the expense?

Belief in branding
However, to judge from the public reaction, most people consider corporate rebranding exercises a huge waste of money and rather silly. Could that be because, whatever companies may think, brands are no more than a small part of the wallpaper of life. Yes, they may, in some cases, inspire trust, they may impart the comfort of familiarity, they may even evoke fond memories, but when push comes to shove, they are as disposable as yesterday’s leftovers.

The loyalty that every brand manager craves has to be earned. And when bestowed, it will be thanks to the merit of the product or service rather than a corporate logo, livery, colour scheme, or slogan. It’s easy to see that a confectionery product, which exists entirely for pleasure and may even in a mystical sort of way taste of childhood, might elicit a positive response. But what about a financial product or institution?

Banks once knew where they stood and we knew too. They didn’t want to be loved, they wanted to be trusted. Their brands were not designed to inspire affection, but to instil confidence. It was enough to be solid, dependable and even perhaps a little forbidding.

Your money should be in stern hands.
All that changed on the day that building societies became banks and unleashed the dogs of competition. Suddenly, these once austere institutions decided to pick up their skirts and dance. Rivalry among the high street banks became a beauty competition, with each trying to outdo the other.

In came jazzy posters, piped music and glitzy TV commercials. Out went stuffy interiors, oak panels and waistcoated managers. In, too, came potted plants, pastel shades, comfy chairs and managers in open-necked shirts and open-wide smiles. Out went old-fashioned banking principles. We all know where that led to – beginning with Northern Rock.

So, when Spanish bank Santander announced that its name was to replace those of Abbey, Bradford & Bingley and Alliance & Leicester, the news was met not with a whimper but a shrug. Abbey had been poorly managed, and both Bradford & Bingley and Alliance & Leicester had fallen victim to the credit crunch. None of them will be missed.

Santander’s decision to rebrand its UK banking interests is a welcome example of a facelift making complete sense. The same cannot be said of Royal Bank of Scotland’s name change to RBS, a costly exercise to make it a more global entity, or Norwich Union’s decision to call itself Aviva, again to achieve global impact. As for Royal Mail’s abortive attempt to call itself Consignia, that is best consigned to the landfill of history, along with British Airway’s ethnic tailfins.

The worst possible reason for corporate rebranding is the arrival of a new boss who wants to make their mark. The best reason is the one that lies behind Santander’s policy: to tell customers, shareholders and suppliers the organisation has changed, in Santander’s case that the old names are gone and that the new name can be trusted.

In his letter to stakeholders, Abbey chief executive Antonio Horta-Osorio says: ‘Santander is one of the safest and most secure banks in the world, [with] sound and prudent banking principles.’ Now that really is something to arouse nostalgia.