How do you resuscitate a corporate icon? As recently as 2008, the Royal Bank of Scotland (RBS) was the world's largest company by assets (1,9 trillion pounds) and the fifth-largest bank by stock market value. It was a byword for financial prudence. Founded in 1727 (a year later it was the first in the world to offer an overdraft), the bank was as bulletproof as they come.
What a difference a year makes. In its quest to become bigger still, the bank (Scottish Gaelic name: Banca Ržoghail na h-Alba) overstretched itself and was destroyed by the suddenness of the global subprime crisis. In February this year, it announced an annual loss of 24,1bn pounds, the largest in UK corporate history. At current exchange rates, that's more than R300bn. Bailed out by British taxpayers, it is now 70% state-owned. Public attitudes towards the banking group have changed from admiration to scorn.
Can it be rescued? We put a simple question to people in the SA advertising, branding and public relations environment: If you won the RBS account tomorrow, how would you turn its fortunes around?
There's no point in having a recovery plan if the market doesn't buy into it, says McCann Worldgroup SA MD Andrew Shuttleworth. "A bank without trust is not a bank. It's a marketing nightmare. You can't separate the brand from the business."
In much the same way as the Hong Kong & Shanghai Banking Corp is universally known as HSBC, so the RBS strategy in recent years has been to subsume individual banks - such as NatWest and Royal Bank of Scotland itself - under the RBS corporate acronym.
That can have unexpected benefits, says Draftfcb group CEO John Dixon. "Corporate brands often insulate the consumer brands from damage in the event of negative publicity. In SA, Albany bread has been insulated by the fact that it was Tiger Brands and not Albany that was accused of anticompetitive behaviour."
Shuttleworth, however, thinks it's time to reverse the corporate process. "Let's see less RBS' and more Scotland'. Build a sense of community. Work the Scottish culture and home advantage and build again from there. Pride and nationalism are good starting points. If you are going to turn it around, you have to do it in your home territory."
PR consultant Jenni Newman agrees, though her reasoning might not impress all Scots. "The Scottish reputation for being tight with money would be used as a positive in re-establishing the brand: conservative, reliable, trustworthy and solid."
Gary Harwood of the HKLM brand consultancy isn't convinced. Too much effort has been put into the RBS acronym positioning to abandon it now. "I'd actually be inclined to drop Scottish' and Royal' altogether. There was nothing wrong with the RBS brand identity until last year. Customers want their old bank back."
That means convincing the market good governance has returned. The group must develop a clear mission then "communicate, communicate, communicate", he says. It must conduct itself transparently and be seen to be paying off its debts, in order to be privatised as soon as possible.
Ironically, says Dixon, nationalisation may have been the best thing to happen to RBS. "Unless depositors feel their investment is secure, the very notion of a bank is undermined." Government ownership gives that sense of security that investor funds are guaranteed. He adds that brand damage is less severe in foreign markets such as the US, than in the UK, where the disappointment is felt more personally.
So what should be the turnaround strategy? SA branding expert Jeremy Sampson, who describes the RBS collapse as an "aberration", says the first step is to simplify and rationalise spending on marketing. "What they do must be totally focused. The message must be serious, not frivolous."
That raises the question of whether RBS should continue to sponsor rugby, including the Six Nations Championship. Its Formula One sponsorship has already gone but (so far) it has retained its association with golfer Jack Nicklaus and cricketer Sachin Tendulkar, sportsmen with impeccable images. "I certainly think they should be reviewing high-profile sponsorships," says Sampson. "They must be seen to be frugal." The same applies to advertising. There's no room for humour or satire. "The message should be simple: they are there for you and me, through good times and bad."
He shares the view of US entrepreneur Warren Buffett that a strong brand is the most important asset for a company, followed by good management and a strong balance sheet. "Despite everything that's happened, the Royal Bank brand engenders loyalty. People are keeping their accounts there. The group must maintain and nurture confidence in current customers, show it's not flash and stupid. It must grind itself back to health."
Dixon adds: "The key constituent initially should be staff and existing customers. Retention should be the priority, not acquisition. Nobody wants to work in an organisation that is hated or the subject of jokes. The focus would be on creating brand disciples. Trust needs to be re-earned through open, honest communication. The solution would not be led by beautifully produced brand adverts, I would see a PR led-approach, focusing on clear, regular communication. I would actively avoid spin or corporate-speak of any kind."
Any PR message must also show contrition and a clean break with past practices, says Newman. "We messed up, we admit it, and we're genuinely sorry. Responsibility has been allocated and accepted. The relevant leaders have left the business. We're making a fresh start."
New CEO Stephen Hester must demonstrate his commitment to rebuilding the bank's reputation, she says. This requires roadshows, interviews and other PR activities. He should also spend an hour a day on a consumer hotline for six months, answering questions.
Abey Mokgwatsane, CEO of the VWV experiential marketing group, would go further, and set up an open forum online, for consumers to comment on the bank's direction. "This is important as honest dialogue is the basis of any trust relationship."
How does all this compare to actual RBS strategy? Group marketing MD Helen Page believes it's a step-by-step process. A new NatWest and Royal Bank of Scotland message, "helpful banking", is being rolled out in a series of unscripted, documentary-style TV ads showing customers receiving practical financial advice.
In an interview with UK magazine, Marketing, Page says: "We conducted customer research and they were simple in their responses: they want us to get things right and provide what they need. It may seem a basic message but it is what customers want."
To get a consistent message across its brands, RBS has consolidated advertising for NatWest and Royal Bank into the same agencies - M&C Saatchi for conventional advertising and CHI and the Communications Agency for below-the-line.
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