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Big is beastly, especially if we’re talking big banks like Barclays

August 28, 2012

Which brands make us most angry? Yes, you guessed correctly. The big ones that rip us off, starve us of mortgage funds, pilfer our savings and behave with amoral disregard for everyone’s interest but their own. Anything, in short, that ends with the word “Bank”.

But come, let’s be a bit more specific. How about some brand differentiation – which is the worst, and which the runner-up? Well, coming in at number 2 – just behind the winning “All banks” category – is Barclays. And next, in 7th position, is Royal Bank of Scotland.

I know all of this thanks to some research, just out, conducted by YouGov and commissioned by creative agency Johnny Fearless (of which more below).

Why don’t Lloyds, Santander and HSBC make it into the top 10? Surely not on account of the odour of sanctity. We can only speculate, but could it be that Barclays and RBS have the two biggest Swinging Dicks attached to their brand heritage, namely Bob Diamond and Fred the Shred? I doubt that most people know who Antonio Horta-Osario is, and would struggle to recall his name in sufficient detail if they did. Which is probably just as well for Horta-Osario and Lloyds Bank.

More interesting, if perplexing in some ways, is the identity of the other 7 members of this exclusive Top 10 club. Tenth equal with Coca-Cola is Nestlé – still regarded as a corporate pariah on account of its anti-social baby-milk marketing practices in developing countries. I’m sure that doesn’t depress sales of Kit-Kats and Yorkie bars one bit, though.

And what’s Coke doing in there? Sorry boys and girls, for all your tender investment in clean athleticism, those grubby practices in Third World countries have not gone unnoticed.

Next up, “All utilities companies” at number 8, on account of their high prices and perceived profiteering. But two deserving special mentions here are British Gas – with its conspicuously bad customer service; and BT – with its ineffectual overseas call centres.

Virgin Media is in there at number 8 as well, although I have yet to discover whether this is because we’re all being beastly to Beardie or on account of some graver underlying cause – such as woefully inadequate service.

That leaves us with McDonald’s at number 4 – poor quality food and an inappropriate Olympics sponsorship, apparently.

…And, weighing in at number 3, the nation’s unfavourite retailer – Tesco. Memo to Tesco CEO Phil Clarke: it’s because you’re too big for your boots, despoil our high streets and blackmail your suppliers. No other retailer can do this so successfully, it seems.

  1. Which companies or brands make you feel angry? 
  2. What is it they do to make you feel angry?
Rank Company or brand
1 All banks’, ‘Banks’
2 Barclays
3 Tesco
4 McDonald’s
5 BT
6 British Gas
7 Royal Bank of Scotland’, ‘RBS’
8= Virgin Media
8= Utilities’, ‘Energy companies’
10= Nestlé
10= Coca-Cola

The research was commissioned by Johnny Fearless and carried out by YouGov. Total sample size was 2077 adults. Fieldwork was undertaken between August 3-6th 2012. The figures have been weighted and are representative of all UK adults (aged 18+).

Johnny Fearless is a Soho start-up agency founded by Paul Domenet and Neil Hughston, whose stock in trade is creating “social crackle” around brand messages. Or so it says in their publicity blurb.

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Why HSBC £40m fine over mis-selling scandal gives marketing a bad name

December 6, 2011

Chris Barraclough is right. While the marketing community obsesses about Marks & Spencer lingerie ads, Size Zero models, Twitter trending and the monetisation of Facebook, it is almost entirely oblivious to some criminality of Dickensian proportions tarnishing its name.

Criminality? We’re talking big banks here, and yet another “mis-selling” scandal, although in truth the scandal involves everything from new product development through to sales, marketing and marcoms. Not to mention some truly appalling internal supervision, with a hint  of News International about it.

Villain of the piece is HSBC, Britain’s biggest bank, which has just been fined £10.5m by financial services regulator the FSA and ordered to pay back £29.5m to old age pensioners it had systematically swindled out of their savings over a period of 5 years.

It’s a complex story with many, unflattering, angles. Here are a few of them, to give the flavour. The mis-selling involved an investment bond with a capital protection element. The snag was, you had to put the money away for about 5 years or incur a huge financial penalty. Many of the 2,485 victims were very old; one was 94 – the average age was 83. Obviously, a large number had a life-expectancy shorter than the term of the bond. Yet, they were easy prey, not necessarily on account of mental infirmity but because they were 1) capital rich (compared to most of the rest of the population) and 2) very fearful of the eventual cost of living in a halfway decent care home. Quite a few sold their houses to fund what they were told was the answer to their financial prayers; on average, they handed over £115,000 each. The average loss was £11,790 per customer, spookily adjacent to the £11,500 commission over 5 years received by advisors who had helped to sell the product. The FSA judged that 87% of sales were “inappropriate”.

HSBC is not solely culpable. It bought the rogue organisation responsible, Nursing Home Fees Agency, long after it had been set up in 1991 – presumably on the basis that NHFA was a nice little earner (as indeed it was). Then, too, NHFA came highly recommended. Help the Aged, the charity, was being paid commission for passing on names to the NHFA, while the Royal British Legion listed the company as a place to seek advice on how to pay for care fees. NHFA salesmen were also aided by a listing in the government’s financial advice website at Direct.gov.uk.

For all I know, malpractice may date back two decades. But that hardly exonerates HSBC, which took 4 years to wake up to something being rotten and then to report it. NHFA was only closed down in July of this year.

Horrendous though this mugging of pensioners may be, it would be nice to think of it as an isolated incident. No such luck.  In January 2011 Barclays was fined £7.7m and ordered to pay £60m compensation to thousands of elderly victims of a similar mis-selling scandal. In April, the banks finally lost a case in the high court, after years of procrastination over the payment protection insurance scandal – making them liable for billions of pounds of compensation. In May, the Bank of Scotland, a subsidiary of Lloyds Banking Group, was fined £3.5m and forced to pay £17m compensation to elderly customers after – guess what? – selling them risky investments.

How do they get away with it? Well, because they can. These fines may seem astronomical by my standards or yours, but they are a spit in the ocean compared with the Big Fours’ bottom lines. HSBC, for example, made interim profits of about £7bn this year. Banks also benefit from a culture of impunity. This is usually taken to mean stratospheric and wholly unjustified annual bonuses, or irresponsible, arcane, casino investments that eventually bring the house down. It is equally apparent they have a licence to plunder the needy and vulnerable with little fear of meaningful retribution.

For that state of affairs we too, as Barraclough implies in his blog post, are partly responsible. And marketers, obsessed with youth and cutting-edge technology, especially so. Finance, particularly retail finance such as pensions, investment bonds and mutual funds, is nit-pickingly complex and unsexy. It’s also, as often as not, about an unsexy sector – the over 50s – who happen to own most of the nation’s wealth. So we defer to the so-called experts. These experts don’t mind being boring, in fact they positively revel in it. And you can well see why.


Banking on marketers

November 2, 2009

Neelie KroesThis week, EU competition commissioner Neelie Kroes has set in motion profound changes to the UK banking system. As a result of her decree, the big boys – Lloyds Banking Group and RBS – which have been in receipt of so much of our money will be broken up. For much the same reason, the more specialised Northern Rock is being split into a “good” and “bad” bank, with the good part being speedily returned to the private sector.

The net result will be transformation of our high street banks. Three new banks will come on the scene, accounting for about 15% of the market, and they will not be owned by any of the Big Five that currently dominate our system.

That means more competition. But there are other reasons for predicting a better deal for consumers – and better career opportunities for marketers – over the next five years. Shorn of the cartel power that goes with being a part of a global bancassurance operation, retail banks will have to fight harder for their funds. And there’s only one place they’re going to be getting them: from you and me. That means more customer focus, and more scope for marketing ingenuity.

More in my column this week.


Is Intelligent Finance next on Lloyds’ chopping block?

August 22, 2009

IFSo the Cheltenham & Gloucester brand has had a reprieve, and the mortgage specialist’s 164-strong branch network will, for the moment, remain intact under the aegis of Lloyds Banking Group. Don’t for a minute think that this signals a change of heart about the high street banking group’s brand cull. It doesn’t.

C&G will be retained, pro tem, as a sacrificial victim to placate the competition deities in the European Commission, who are becoming increasingly restless about 1) Lloyds’ now enormous share of the UK retail banking market and 2) The huge slug of money it has received from UK taxpayers, which may – in some lights – be regarded as state subsidy, a no-no in today’s EU.

Elsewhere, the cull moves ruthlessly on. Lloyds will want to reduce its dependence on the Asset Protection Scheme (ie taxpayers’  money) as quickly as possible. One way of doing this is to tap shareholders for extra money via a rights issue. Another is to sell off non-core assets.

I note, for example, that Lloyds has been dismantling any remaining connection between the Halifax brand and its internet banking brand, Intelligent Finance. Should we expect an announcement about IF being sold off quite soon? And, after that, Scottish Widows?


Lloyds brand cull moves up a gear

June 9, 2009

C&GAs predicted, the great brand cull at Lloyds Banking Group has begun in earnest with the closure of all 164 branches of Cheltenham & Gloucester. Lloyds claims the C&G brand itself is too valuable to sacrifice: the reality, now it is shorn of a high street presence, is that the brand is moribund. C&G has been dispatched into the hands of mortgage brokers, where it will totter on in a zombie twilight zone until Lloyds stealthily administers euthanasia. Lloyds is repeating the surgical treatment meted out to Clerical Medical a couple of months ago, only this time on a much more important brand.

Lloyds has no choice but to winnow its brands. It is overextended thanks to its merger with HBOS; under massive financial pressure – as much due to the recession as bad debts emanating from HBOS; and will soon find itself having to row back on market share, once the competition authorities have their say. The question is, which household name will be chopped next?

For more on the great brand cull laying waste the auto and financial services sectors, see my column in this week’s magazine.


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