National Savings is 30 years old next year. But it can trace its roots back more than 130 years and that is one of its main problems.
While heritage is sometimes used in a positive way to stress the character of an organisation or brand, especially in financial services – for National Savings it has become a millstone. The perception is that National Savings is the grannies’ and kiddies’ brand – incredibly safe savings because it is guaranteed by the government – but irrelevant to most people aged 18 to 60. It is also overshadowed by the plethora of savings options from the traditional building societies and banks, to the supermarkets and Virgin.
Yet National Savings proudly boasts a total of 63.3bn in savings products held by 30 million people. The figures sound big, but when you look more closely, you can see that on average a National Savings saver holds 2,100. By contrast, an average building society saver, of which there are less, would hold three times that – 6,250.
National Savings has two masters. Its customers, the majority of whom are over 60, have little direct contact with it because they have to deal through the Post Office.
And secondly, the Treasury, which in recent years has reduced its financial demands on National Savings, but still set it a 12bn sales target this year of which 1bn is earmarked for government income. Last year, National Savings missed its 2bn Treasury target by 400m. Its main money spinner remains Premium Bonds which contributed 1.9bn to total income last year.
This is the reality faced by BMP DDB hired last week to handle National Savings’ 10m creative and media account with a brief to build a brand. Its appointment could be seen as a response to an ad strategy, which in the past ten years has moved from grandfather to grandson cameos, to Gary Larson cartoons and a man dressed as a wad of bank notes.
But National Savings admits that its most recent advertising through HHCL & Partners – the virtual shop – did not help to build the brand, although it did bring in customers. The results of a strategic marketing review, expected any day, will provide the ammunition for the BMP campaign.
The review takes in products, channels of distribution, customer segmentation and, crucially, branding. A name change has been discussed although it would require legislation. At its core the review must ask whether National Savings is still relevant. Gordon Brown clearly thinks so – at least while National Savings continues to provide high levels of Treasury income.
But unless the strategic marketing review can provide a more radical platform for National Savings to compete against the banks, building societies, supermarkets and other financial institutions it will not solve its longer-term problems.
Cover Story, page 26