Cashing in on banks

Paul Geddes’ move from Argos to the top marketing role at Royal Bank of Scotland is one in a series of similar moves in recent years. Is the challenge of resurrecting the financial services sector the reason behind such decisions, or are the l

The financial services sector has traditionally not been considered the sexiest of areas by marketers – or by consumers for that matter. But during the past few years it has begun to attract some of the biggest names in marketing, notwithstanding marketers failing in their attempts to move the financial services sector in a more customer-focused direction.

Paul Geddes, marketing director of Argos, is the latest in a succession of high-profile marketers to take the financial services shilling.

Geddes has been appointed managing director, marketing and strategy at financial giant Royal Bank of Scotland, overseeing the marketing for the National Westminster Bank and RBS high street brands (MW last week).

“Traditionally, bringing in marketers from outside has not been a great success,” says Anthony Thompson, chairman of the Financial Services Forum. “Financial services is littered with the corpses of packaged goods marketers who came in during the Eighties and Nineties and failed. The reason for the failure is that the companies paid lip service to brands and branding – for marketing, read sales promotion with a little bit of advertising tacked on. Culturally they weren’t given an environment they could thrive in.”

No freedom in finance

Roy Hoolahan, executive research consultant at Ball & Hoolahan, says marketers have avoided financial services in the past, because they have seen people go in who were then not given the freedom to do what they wanted. They also considered it to be slow moving and tied up by regulation.

A classic example of this is Kevin Gavaghan, who was hired in the late Eighties as marketing director for Midland Bank (now subsumed into HSBC). Using retail experience garnered at Habitat, Marks & Spencer and Burton, Gavaghan brought packaged goods marketing techniques to bank accounts, branding them “Vector” or “Orchard”, according to consumer lifestyle. These names were quickly phased out and Gavaghan, who also claims to have had a hand in the creation of First Direct, returned to retail.

Howard leads the way

But Thompson believes the sector has moved on, largely led by changes brought about by Halifax’s marketing-minded chief executive James Crosby, who appointed Asda marketer Andy Hornby in 1999 to foster a retail culture at the bank. Many believe that the success of Halifax and the effectiveness of its marketing, including the “Howard” advertising campaign created by advertising agency Delaney Lund Knox Warren (DLKW), has led financial services companies to re-evaluate their approach to marketing.

DLKW chairman Greg Delaney says financial services companies have realised they must compete in a consumer landscape where their marketing has to be as good as everyone else’s. “Increasingly, the companies market their products as consumer-centred, as opposed to having something that someone has thought up and needs to be sold,” he says.

That resurgence of marketing has led to the recent spate of hirings.

Last year, Abbey National’s chief executive Luqman Arnold poached Angus Porter from BT to oversee a marketing-led revival and rebranding of the bank as Abbey (MW June 12, 2003). Add to that Roger Ramsden, the former Safeway marketing director who now holds the same role at Prudential (MW October 18, 2001); Simon Gulliford, who was brought in from EMAP – fresh from the launch of Red and Heat magazines, by Barclays Bank to be its group marketing director (MW April 12, 2001); Helen Stevenson, who moved from Mars to become Lloyds TSB’s top marketer (MW December 5, 2002); and Boots marketer Zoe Morgan, who was hired for the top marketing job at Halifax Bank of Scotland (HBoS) (MW April 3, 2003). Gulliford accepts that such appointments are a response to increased competition and pressure on margins, and says it is natural for financial services companies to look at “where there is best practice and where talent resides, and see if it can be adapted.”

Financial talent pool running dry

One senior agency source says that it is telling that the banks appear to believe there are no natural marketers within their organisation to fill the top marketing positions. Another says that financial services marketers and classically trained packaged goods marketers are very different animals: “Financial services marketers think from the product out, whereas traditional marketers think from the consumer in.”

Commentators also suggest it is precisely because financial services marketing has been so poor that the jobs are attractive, as they hold out the prize of making a difference by introducing a new skill-set, something that is harder for a marketer to do at a packaged goods company, which tends to already have those skills.

Ramsden says: “Financial services has not achieved the same impact as tangible products. The difficulties are that the products are intangible and can be complex, and as a result the complexity can seep through into the way they have been presented to the consumer. “I think that the attraction lies in injecting customer insights coupled with a pace of response into what have often been insular and isolated companies.”

Porter says: “Banks have been set in their ways and haven’t done a great job at putting the customer first, and I include Abbey in this.”

After seven months in the job, Porter says his perception of the sector has been confirmed, and explains that there is much learning that can be brought over from retail. But, he adds, there are differences: “How profitable a product is at point of sale is difficult to define. Unlike selling a product off the shelf, financial services products are much more complex, and profitability can only be determined over a period of time.”

While the prize of transforming such major brands is clear, some observers, unsurprisingly, suggest another attraction – that of money, both in terms of the enormous marketing budgets and personal remuneration. When it comes to advertising, financial services is only outspent by car manufacturers. According to Nielsen Media Research, during the past year RBS and NatWest spent a combined total of £23.5m, while at Barclays, Gulliford had an advertising kitty of more than £30m. And according to the Marketing Week salary survey based on figures compiled by Ball & Hoolahan, financial services marketers are some of the best paid in the profession (MW last week).

Abbey’s Porter gets a basic salary of £450,000, to which share options, bonuses and other benefits are added. But he enjoys the unique position of being on the main board, so few could hope to get close to his financial status. Gulliford, who is not a board director, claims that he took a cut in pay to become group marketing and communications director at Barclays.

The lure of the lucre

Kate Nicholson, who was moved from head of advertising of Sainsbury’s to be the first marketing director of Sainsbury’s Bank (MW April 10, 2003), points out that while it is the big names that are getting all the attention, the influx of marketers into financial services from outside the sector is happening at all levels, and is changing the constitution of the banks’ marketing departments.

However, not all welcome the influx of marketers from outside. Some traditional financial services marketers have privately expressed annoyance at the arrival of the big-name marketers from outside, many of whom they say are condescending, have little true understanding of the sector and are able to depart for another high-profile job a couple of years later, leaving others to tidy up the mess.

It would be wrong to see the new breed as a homogeneous whole. Some, such as Gulliford, are quick to cast a critical eye over the work of their contemporaries. “I see Abbey has changed the logo and has a new colour palette – I await to see the reinvention with interest,” he notes.

Bank job to bear fruit

Gulliford does think work being carried out by the new financial services marketers will bear fruit within the next two years, comparing the change to that which took place with cars and packaged goods companies a decade ago. As Ramsden points out: “Ultimately, all these companies have the same customers. Financial services have mass-market propositions in the same way as Procter & Gamble, Unilever or Nestlé.”

While the new generation of big-name marketers might transform the financial services industry for the better, what of their own future? Gulliford reacts with irritation when asked if he could see himself become chief executive of Barclays: “Who says I want to do anything other than be a marketer? It’s all I have ever wanted to do.” However, should he or any of his marketing counterparts in the other financial services companies have such aspirations, an industry source points out that for a marketer to reach the top spot at a bank or insurance company would be even harder than in other sectors. “Shareholders would always expect the chief executive to be a financier or actuary,” he says. Tellingly, the only one to have made it is Tim Pile, chief executive of Sainsbury’s Bank, but he has a traditional financial services marketing career behind him.

So if the current crop of big-name marketers take up challenges elsewhere, the question will be whether they will have created enough of a marketing environment to generate home-grown successors, or whether the financial services companies will once again be forced to raid other sectors for their top marketers.

By royal appointment

In the past, the financial services industry and the retail sector were seen as chalk and cheese, but that perception is changing – and Argos marketing director Paul Geddes is the latest marketer to be seduced by the banking community. He has landed the top marketing role at Royal Bank of Scotland, where he will have responsibility for strategy, marketing and products for both the RBS and National Westminster Bank brands (MW last week).

As managing director, marketing and strategy for retail banking at the RBS Group, Geddes will be well rewarded for his efforts. But according to friends, that is not what attracted him to the sector.

Leo Campbell, a near neighbour to Geddes in Oxford and now group deputy chairman at Claydon Heeley Jones Mason, says: “Geddes wouldn’t have moved just for the money. That would be definitely secondary to the opportunity this position will give him to practise his craft. He will bring a huge amount of energy into a sector that, frankly, is somewhat moribund.”

Campbell believes that other marketers may have been attracted to the sector, which has become tarnished by a number of upsets and revelations, because it is ripe for a shake-up.

Geddes, an Oxford University graduate, says: “The scale of opportunity is tremendous. RBS is a very successful business and it has deep relationships with its customers, which makes it fascinating from a marketer’s point of view.”

It is understood that Geddes was involved in talks to take the managing director position at Argos, left vacant by WH Smith chief executive Kate Swann. But friends say he had already been approached about the RBS job and that he wanted a change from retail. He spent seven years at Procter & Gamble working on a number of brands, including Max Factor and Pampers, before he moved on to Superdrug as head of marketing and then Comet as marketing director.

At 34, Geddes’ track record indicates that he doesn’t stay working on the same brand for too long. And given the City’s disappointment at Argos’s latest trading statement – a three per cent increase in sales during the Christmas period, less than half the growth for the same period the previous year – it looks as though Geddes chose the right time to leave.

One of his colleagues at Argos, head of brand marketing Helen Page, who herself spent five years in financial services before moving to the retailer, says that increasing competition in both sectors means consumers have become more “promiscuous”. She also says that banks are “looking at retailers to show them how to sell”.

Page believes Geddes’ experience at Argos will bring a “fresh and dynamic touch” to RBS: “He’s very hot when it comes to the competitive environment. He’s always watching what everyone else does. And I think he will drive that into the retail banking sector.”

At sales-driven Argos, Page says Geddes “brought the focus of the customer into the limelight and got people to recognise the retailer as a brand.” This helped him to establish alternative routes for selling products, such as the internet, which she claims now accounts for six to seven per cent of total sales at Argos.

She adds: “He will see RBS not just as a bank, but as a retailer – certainly now that banks are offering more services through different routes.”

But workplace culture is the one area where Geddes may find that things are different. Page says: “In financial services people are account- and numbers-driven, while in retail they are more ‘market trader’. He will find it a change in culture, but it is something I think he will adapt to.”

Indeed people who know him say that Geddes is fun to be around. Mark Wnek, who worked with Geddes on the Argos account when he was chairman of Euro RSCG, says: “He has a brilliant sense of humour. He’s very bright and is also very comfortable in his knowledge, which makes him a relaxed person. There is no kind of bullying. He’s a really nice, uncluttered person.”

That “niceness” is the one thing Wnek believes could hold Geddes back from getting to the very top of the corporate ladder. He says that while Geddes is ambitious, he is not the kind of person who is political and pushy at work. Geddes himself declined to participate in this profile, preferring, he says, to be “more self-effacing”.

But all this doesn’t mean Geddes is a soft touch. His former colleagues say he will push until he gets what he wants, and you get the impression that he drives his team hard. Page says: “The pace at which he works some people find a challenge. They get ground down by it and can’t keep up with him.

“He can jump a little too quickly to a decision. He wants to do everything now and sometimes people don’t go along with it as quickly as he would like them to.”

Others say that although he has strong intellectual curiosity, he could benefit from “increasing his attention span”.

Geddes’ energy is also extended to the brand. Wnek says he was passionate about Argos. He had an “almost messianic desire” to shout at people who considered the retailer was “not for them because it was too low rent”; he would tell them they were wrong as the brand is for everybody.

That desire is woven into Argos’s current advertising, featuring Richard E Grant as an ageing rock star alongside details of product and price. This was a departure for the retailer, which had previously focused on price in its advertising. It is expected that Geddes will call a review of the advertising for RBS and NatWest, held by Saatchi & Saatchi and M&C Saatchi respectively, just as he did shortly after joining Argos.

His energy appears to cross over to life outside work. A family man with two children, he is known to play backgammon and to have an insatiable appetite for the latest technological gadgets. His love of music – he is a concert standard violinist – extends beyond classical to soul.

But whether he will have time to worry about work-life balance once he is forced to divide his time between Scotland and London is open for debate.