Ringing the changes on the cards

MBNA’s rebranding campaign needs to engage increasingly savvy consumers with something new, if it is to improve its tarnished reputation in a highly competitive market, says Kate O’Flaherty

credit_cardMillions of MBNA credit card customers will see the brand name disappear from their cards as the parent company Bank of America gets ready to roll out a new card to the UK and Ireland (MW last week) – a move that will expand the overseas operations of BofA, which does not have a retail banking presence outside the US.

The bank has been looking to expand its credit card and corporate banking services abroad, including a deal to issue credit cards in China last year.

BofA, which plays on its “patriotic” heritage in its homeland, however, appears to be gearing up to stiff competition amid fears of a global credit crunch. It is launching a second card, in addition to the rebranded MBNA, across Europe.

Critics say that the move to rebrand MBNA is in the right direction because though it has been established for longer than relative novices Mint and Egg, it is questionable how strong the brand is.

After its launch in the 1980s, MBNA – once the largest credit insurer in the world – maintained a strong customer base in the UK and Spain by becoming the first credit card issuer to offer a 24-hour service. It then set off to offer cards with family coats-of-arms and regional landmarks and, by the mid-1990s, it was marketing to fans of professional sports organisations.

BofA bought it for $35bn (£17.8bn) in January 2006 and all US MBNA cards were rebranded by the end of that year. But whether the bank will create a new brand for Europe or bring over an existing brand from the US remains unclear.

Brand experts say that in its current form, the MBNA brand does not have a particularly prestigious reputation in the UK, with its aggressive direct marketing campaigns lacking a clear brand focus. For instance, MBNA sent out scores of unsolicited offers to apply for a platinum card to “householders” across the country last year, thereby avoiding the FSA consumer code that outlaws such offers of credit to named individuals. The campaign came under severe attack, and critics say that the ill-judged move left its reputation tarnished. As one of the country’s biggest below-the-line spenders, MBNA spends £40m a year on direct marketing.

The appointment of WPP Group-owned branding agency The Brand Union to head a European marketing push hints at a total overhaul of marketing strategy and – with creative competition such as Egg and Mint – BofA will need to engage consumers with something new.

Paul Gordon, managing director of financial services marketing agency CCHM:Ping, says there is an opportunity to reposition the brand by dropping the MBNA title. “Consumers have zero awareness of Bank of America,” he says. “They need to create a brand through advertising and then do direct marketing.”

He says that along with Capital One, MBNA has had the tendency to “mail until you relent”, which has not left the brand in high esteem.

Gordon adds that the strongest consumer businesses have the most successful brand franchises, which engage emotionally with their customers.

For instance, rival Mint established itself with “humorous” advertising and last year it launched an SMS service for customers “too busy” to pay. The Royal Bank of Scotland, which owns Mint, says the card “puts fun into finance” and “brings a breath of fresh air to the financial world”. The card, claims RBS, has accrued four times the initial growth expected and, in its first month, gained 10% spontaneous awareness.

Gordon points out that changing the look of the physical card could be the catalyst in cementing a brand, as shown with Mint’s rounded corner. “The British consumer is quite brand-savvy and offer-savvy,” he says. “But we are all suckers for new, innovative things.”

Egg chief marketing officer Alison Wright says branding and rates are both equally important to consumers: “To be successful, you need a well-known and respected brand in order to make it onto a customer’s shopping list in the first place,” she says. “But companies also need a strong product with a good rate, particularly now with the prevalence of comparison sites like Moneysupermarket.”

Wright says that as well as building on the 0% APR offer, Egg has done well because of its emotional connection with consumers. “Our tone of voice is quirky, optimistic and like a friend,” she says.

Gordon agrees, adding that it would be an idea for MBNA to try “empathetic marketing” to establish itself effectively in consumers’ minds. “Barclaycard always had powerful brand-building advertising, as well as brand-building activity,” he says.

According to Wright, simply doing something that is unique is the secret to a successful brand. “Ultimately, the best way to innovate is to identify customer needs which have not been met. Egg was the first 0% balance transfer card. It offered people a way to manage borrowing that was more flexible than a traditional loan.”

Other credit card providers have followed suit. Interest-free offers have been saturated to such an extent that Virgin is now offering 0% on balance transfers for 14 months. With so much choice in the market, consumers will continue to demand more from credit cards – and at a lower cost.

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