There was the notorious CEO Fred Goodwin; the spectacular annual loss of £24bn in 2008 – the largest annual loss in the history of British business; British taxpayers stepping in to save the bank from collapse with an investment of £45bn; and Goodwin’s replacement Stephen Hester, who kept going fox hunting and paying almost a billion pounds in bonuses to executives who were essentially working for a state-owned firm that was losing money.
Then came the more recent confirmation that RBS had engaged in financial misdeeds such as fixing the Libor rate and cheating on the foreign exchange markets, mis-selling mortgages and accusations of bullying small British firms over their lending agreements. Finally, with the Government beginning the process of returning RBS to the private sector comes the news that RBS has lost British taxpayers around £13bn during its stint under public ownership.
So it was with some sense of relief that earlier this year current CEO Ross McEwan nabbed David Wheldon from Barclays and made him the CMO at RBS. Wheldon is inarguably one of this country’s most talented and experienced marketers. RBS always looked like an impossible branding mission but with Wheldon on board it became a long-shot rather than a non-starter.
This week’s announcement that RBS is to rebrand itself by turning its logo into – you guessed it – lower-case letters is therefore a curious move by the banking group. Curious because logo changes that precede the completion of the internal transformative work on the bank and its culture smack of classic ‘lipstick on the gorilla’ brand strategy. Curious too because the only way you can change any aspect of your corporate identity is quietly and without external fanfare or announcement. As soon as an executive starts talking about pantones and logos, it’s impossible not to avoid significant reputational damage to the brand image you’re trying to redeem.
The new logo announcement is, however, not the only error that RBS has made recently. McEwan is doing his best to turn the bank around and, reassuringly, has recognised the importance of marketing and customer orientation. However, he’s developed the annoying CEO habit of setting enormously unrealistic customer satisfaction goals for RBS that his CMO won’t be able to achieve.
McEwan is dead set on making RBS the number one brand for customer service, trust and advocacy by 2020. That’s somewhat akin to your humble columnist declaring an ambition to represent the UK in the women’s javelin at the Rio Olympics. At present, RBS is the worst performing bank in the UK with a net promoter score (NPS) of -19. That’s a full 92 points away from First Direct, the most highly advocated bank in Britain. Even if RBS eventually plays its NatWest brand as its main retail bank, its current NPS of +5 looks an equally unlikely basis for satisfaction superiority.
One more fundamentally enormous marketing challenge awaiting RBS is its brand architecture. RBS is, as McEwan repeatedly reminds everyone, a “bank of brands”. Superficially that might appear to be a distinct advantage, allowing RBS to play certain brands in certain roles as it moves forward. The strategic reality of multi-branding, however, is that it is an approach that demands far greater marketing competence than the more traditional branded house approach exemplified by the likes of HSBC.
A quick glance at the panoply of branding challenges facing Wheldon and his team is enough to make your hair curl: revitalising NatWest in the UK, rebuilding the reputation of Coutts, restoration and divestment of Williams & Glyn, reintroducing the Royal Bank of Scotland brand (as opposed to RBS) north of the border and the overall rescue mission on investor confidence and corporate reputation at the RBS holding group ahead of re-privatisation.
In recent years, the huge salaries paid to executives in the financial services industry and CMOs in general have come in for criticism. Regardless of this climate, and irrespective of the odds of success, Wheldon is about to earn every penny of his, I’m sure very generous, salary.