Financial firms bank on retail skills to fill operational posts

Former Asda marketing director Chris Pilling is the latest retailer to step into an operational role in financial services, after being appointed as HSBC-owned First Direct’s chief operating officer. Onlookers say it shows financial institutions are tackling their “outmoded attitude” to customers, while others trumpet retail as marketing’s finest training ground.

Former Midland Bank marketing director Kevin Gavaghan was recruited from the retail ranks in 1985. He believes retailers’ marketing know-how, coupled with line management duties and shop-floor experience, make the sector ripe for producing people who can work in operational roles.

“People are going to keep on coming up through the retail route,” Gavaghan says. “There are obvious reasons why retail makes the best training grounds/ it is like a military academy where people learn composite skills and processes. It is a ferocious environment where only the best reach the top.” It wasn’t always thus. Gavaghan, co-founder of service design agency Spirit of Creation, observes: “Retailers have crossed sectors and it hasn’t worked.”

Change and greater degrees of success have come from what he calls “modern marketers”, who bring a more holistic view of customers and preach maintaining longer customer relationships through greater knowledge of markets, segmenting and lifetime value. “That financial companies offer a service is better understood by retailers than by most people in financial services,” he says. The shop-floor experience, or “twin-track development”, is an important advantage, states Gavaghan, for marketers stepping up to operational roles. “I needed to be a shopkeeper to do marketing well,” he adds.

Pilling’s appointment comes as Tim Pile, former Alliance & Leicester marketing director, steps down as chief executive of Sainsbury’s Bank ahead of predicted bad results (MW last week). While Pile came armed with a thorough financial marketing knowledge, he lacked the “broad-based experience characteristic of a modern retailer,” suggests Gavaghan. “Retailers have made CRM work.”

Anthony Thompson, chairman of the Financial Services Forum, concurs that retailers will continue to take top jobs but says there is evidence that the financial sector is starting to produce homegrown talent. “Prior to the early 1990s, there wasn’t much good marketing in financial services, which is one of the reasons why retailers were attractive to the sector,” he explains.

“But a lot of the early retail marketer appointments didn’t work, because organisations didn’t have the infrastructure or the management to implement retail skills. That’s changed dramatically. It is starting to be a two-way street.” Stepping up from a marketing to an operational role should prove scant problem for Pilling at First Direct, predicts Thompson, where “marketing is a culture rather than a function”.

Joe Garner, general manager of HSBC’s personal financial services and direct banking operations, agrees. He joined from Dixons in 2004 and has been recruiting to drive HSBC’s retail strategy. Last year he appointed marketing director James Boulton, a former Walkers and Lever Brothers marketer, from HBOS. He describes Pilling’s role as “a traditional operational challenge, but increasingly it is a marketing challenge”.

Boulton says fmcg marketers held “all the cards” 15 years ago, but as the customer has become more empowered, retailers have moved into a stronger position. He concludes: “We have to be more responsive than before.”

Catherine Turner

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