Greed not marketing to blame for lack of trust in banks

December 1, 2012

Rich-Ricci-barclay_2266097bMy eye recently alighted upon the following headline in Marketing magazine: “Marketing ‘to blame’ for lack of trust in banks”. The article went on to say: “Senior banking executives have argued that marketing is to blame for the breakdown of consumer trust in financial services brands.”

Extraordinary. Bank officials in self-inculpation shock. I read on, avid for fresh enlightenment about the real roots of the 2008 global banking crisis. And was disappointed.

It turned out that the subs, in their eternal quest for the succinct and memorable, had been a little too sharp with their headline. The only bank marketer actually shouldering any of the responsibility was David Wheldon, now rejoicing in the title of head of brand, reputation and citizenship at Barclays Bank: and he, in any case, is a recent import from Vodafone. Furthermore, what Wheldon actually said was pretty anodyne:

“Marketing has let financial services down… The voice of customers has not been ever-present in decisions, and marketing must bring the voice of society to the table. A brand is what a brand does, and how you behave in the wider world forms whether you’re seen as a good citizen.”

Nevertheless, I think the subs unwittingly raised a very good question. To what extent has marketing been responsible for the banking crisis?

Not very much, I would suggest, when compared in the scales with systematic mis-selling and its parent, corrupt corporate culture.

The paradox about bank marketing is that, despite the vast budgets put at its disposal, no one takes very much notice of it. There are a variety of reasons for this: among them, overblown corporate claims unsusceptible to real analysis; phoney discounted interest rates showered upon the bewildered would-be customer like confetti; the perception that banks act as a cartel and are extremely unlikely to break ranks for the sake of a genuine marketing initiative; and customer inertia, which makes bank management as resistant to change as their customers.

But perhaps the most compelling reason why bank marketing is a study in failure is that the upper echelons of bank management don’t really believe in it themselves. Despite the eye-watering financial packages senior bank marketers command (when compared to industry benchmarks), only half-jokingly are they referred to as “heads of flower arrangement”; in effect they are of middling rank in the bank hierarchy. Top executives have rather more important things to worry about than the latest lick of corporate paint or flowers in the shop window. Things like the international money markets, their bonus structure, and, er, Libor.

Much more insightful on the breakdown of trust between the banks and the public than Wheldon et al speaking at the Marketing Society conference is Richard Ricci’s recent performance before a parliamentary committee. Ricci (image above, doing a passable imitation of a spiv at the races) has just been appointed head of Barclays’ investment operation. His predecessor was turfed out over the Libor scandal (for which the bank was fined £290m last June) and he has been entrusted the hapless task of cleansing the Augean stables after all the horses have bolted. Pressed hard on why he thought the banks had failed society, he admitted that they been allowed to put too much emphasis upon employee incentives to the exclusion of all other considerations:

At the top of the house, the industry, and I would say at times Barclays, was skewed maybe too much towards the financial performance and not enough towards the other areas. And so one of the pieces of work we’re doing is trying to get that balanced scorecard right around appraisals, around reward, to get all those interests aligned properly.

Greed, not marketing. Enough said.


Why Vodafone CMO Becker fell on her sword

September 11, 2010

A strong, independent chief marketing officer might seem an indispensable executive boardroom fixture of every major corporation these days. Not at Vodafone, however, which has taken the controversial step of abolishing the role and putting its recently imported incumbent, Wendy Becker, out to pasture.

Why? Becker seems to have been less a casualty of new thinking about who should occupy the C-Suite than the victim of a power struggle at the top of the company, in which she lost out.

A former managing director of broadband supplier TalkTalk, Becker was hired only a year ago to replace Frank Rovekamp with a no-holds-barred brief to clean up Vodafone’s messy marketing. That meant not only bringing sadly needed coherence to Vodafone’s confused global brand image, but a full-scale purge of its bloated marketing department. Her dynamism did not disappoint. Out, in short order, went global brand director David Wheldon and global director of customer insight Andy Moore. In, at least on a temporary basis, came Vodafone India high-flier Harit Nagpal to combine the two roles. At the same time 10% of the marketing department – some 90 people in the sluggish European markets of Britain, Germany and Denmark – were made surplus to requirements. WPP-owned The Partners was appointed to conduct a global brand identity review, and Becker applied some arc-light scrutiny to the underperforming mobile advertising business.

Whatever she may have achieved, it was not enough to convince Vodafone chief executive Vittorio Colao to back her cause. In  a root-and-branch corporate restructure which has seen marketing subsumed into a new “group commercial” unit that also includes business services, “global enterprise and partner markets”, the big winner seems to have been Vodafone’s European ceo, Michel Combes. The world has been divided into two operating theatres, Europe and Africa/Middle East/Asia Pacific – which sensibly reflect Vodafone’s two-speed growth path. The high-speed emerging markets will report to Nick Read (who already heads Asia and the Middle East); while sluggish Europe, which nonetheless accounts for 80% of Vodafone’s business, remains in Combes’ capable hands. On closer inspection, however, it becomes apparent that polytechnicien Combes has actually strengthened his hand by adding high-scoring markets in Eastern Europe and Turkey to his existing domain. Heir to the throne? Not necessarily, but certainly he’s received a big slap on the back from Colao.

Which is more than can be said for Becker and her marketing department. Becker, who already reports to Combes, sought to establish a new reporting line directly to the overall boss. But Colao (not to mention Combes) was having none of it. Becker resigned and marketing was humiliatingly put back in its place – or rather, into a subordinate role in the commerce department under former Africa and Central Europe chief Morten Lundal . For the time being Becker will concern herself with “customer experience and engagement”, but that’s just a fig leaf: she’s in the departure lounge. Nagpal, who was in any case an interim appointment, has quit to become ceo of Sky India. The timing of his exit – in late August – may not have been entirely coincidental. All the less so given his deputy David Erixon is also leaving.


Far from heavenly, the F1 marketing role sounds like the brief from hell

September 7, 2010

I was intrigued to hear that the search is on for a Formula One marketing director. Given F1’s global reach, and the colossal sums of money from sponsorship, TV rights and attendance fees supporting the brand, it sounds the CMO job from heaven. Why ever had no one thought of creating it before? For very good reason, as it happens.

First things first, however. The proposal has come out of the inaugural meeting of something called the F100 alliance, which is a new organisation designed to represent the commercial sponsors of the sport. F1 is composed of so many self-interested “guilds” that it’s a surprise the sponsors haven’t cottoned on to this idea earlier. There is, for example, one for determining the governing rules (FIA); another for the Grand Prix manufacturers; yet another for the drivers; one for the mechanics; and even one called the Overtaking Working Group. By contrast, the 175 sponsors who contributed £458m in 2010 (according to industry monitor Formula Money) – more than the £352m provided by the team owners and the £156m by the car manufacturers – have until now been unprovided for.

The immediate back-drop to the creation of the F100 alliance is the recession, and a change in the relative importance of the contributing revenue streams – which has sharpened the sponsors’ appetite for power. The idea, not unreasonably, is to make their money work harder for them by creating a ginger group. The kind of thing which they might wish to influence would be the timing of grand prix, their geographical location and the multiplication of opportunities to entertain – all of course in the cause of maximising sponsorship return. Finding a marketing director to front and shape their interests, where commonality can be found, is a natural extension of this platform.

But who would be the ideal candidate, and how much power would he or she actually have? Although discussions – about the brief, let alone the candidate – are at any early stage, the name of David Wheldon has already emerged from the pack. I have no idea whether Wheldon really is interested, but he certainly has persuasive credentials as the former global brand chief of a major F1 sponsor, Vodafone. And there’s something else he has that any F1 marketing director will need by the bucket load: emollient charm and a considerable reserve of patience.

F100 and its marketing director will be able to beg, but they won’t be able to bully. The Mediaeval jumble of competing guilds that makes up F1 disguises an important reality about its underlying constitution. It is an autocracy where only one man’s opinion – certainly on the matter of grand prix venues – actually counts. That of ringmaster Bernie Ecclestone. Ecclestone has very graciously condescended to read the minutes of F100’s inaugural meeting, rather in the way that a monarch might glance at his subjects’ charters. He is committed to doing precisely nothing. Indeed, not very privately, he has described the whole idea of F100 as “silly.”


Wheldon on the way out at Vodafone?

February 9, 2010

All change in the world of chief marketing officers, it seems. Another CMO-type who appears to be heading for the exit is David Wheldon, global brand director at Vodafone.

Certainly, the headhunters have been alerted.  Cause of imminent departure? It would be guesswork, but guesswork along the same lines as Simon Clift’s situation at Unilever. New brooms do like to sweep clean.

In Wheldon’s case, the new boss is Wendy Becker, group chief marketing office and a member of the Vodafone executive committee. Becker joined last September from TalkTalk – a subsidiary of Charles Dunstone’s Carphone Warehouse – where she was managing director.


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