Will Abbey revamp be left in ruins?

Abbey National’s claim last week that it would “turn banking on its head” with an £11m revamp was welcomed by some observers as a breath of fresh air, but dismissed by others as meaningless hype.

The rebranding of the UK’s sixth-largest retail bank as “Abbey” was one of the worst kept secrets on the high street – Marketing Week broke the news back in May that the struggling bank, which had announced losses for 2002 of nearly £1bn, would drop the “National” part of its name (MW May 22). The announcement last week that it was revamping and would “radically shift” the way it treats its customers was preceded by the appointment of the managing director of BT Retail’s consumer division, Angus Porter, as “customer propositions” director in June (MW June 12) and the creation of a customer board.

But Abbey’s claim that it will make banking “less baffling, less scary and maybe even fun” is ridiculed by some observers, who see it as patronising, deceitful and based on a fundamental misunderstanding of people’s attitudes towards banks. Other observers welcome the relaunch, but warn that Abbey will have to live up to the many promises it has been making.

Chief executive Luqman Arnold last week pledged an array of initiatives to simplify the banking process and make Abbey the “best on the high street”. Complex financial jargon will be removed from customer communications and Abbey’s accounts will be simplified.

The bank’s six current accounts will be replaced by one, called The Account. There will be just three savings accounts – Easy Reach, Put Aside and Lock Away – and three mortgages – Easy Start, Sure and Freedom. Six-hundred extra staff are to be employed in branches and call centres, and a catalogue will be launched, presenting the full range of services in one place. The new approach claims the bank centres on “helping people get on top of their money”.

The claim of simplifying banking is reminiscent of moves by Midland Bank in the Eighties, when it launched the Vector, Orchard and Meridian accounts aimed at different groups of people. However, they proved so confusing the bank eventually had to axe them. But Midland showed that shifting the delivery mechanism could be a winner with the launch of First Direct telephone banking in 1991. Egg did something similar with savings accounts in the late Nineties.

Despite this, Arnold claims: “Banks have managed to make money scary, confusing and boring. In talking to customers, we have all been guilty of being patronising and overbearing. Worst of all, banks have got in the way of customers and their money. We want to turn banking on its head.”

One observer believes Abbey’s approach is “fundamentally dishonest”, as most people know that money is boring and frightening, a fear cleverly dealt with, say, by Barclay’s Samuel L Jackson ads. In a world where consumers and electors are increasingly demystifying spin and marketing hype, Abbey’s customers will not be taken in by a multi-coloured logo, he believes.

“The fact is, Abbey is just another bank. There are a lot of them around and they want to take your money so they can make money out of it. It is a fundamentally demeaning transaction. People hate banks and this rebranding won’t change that fact,” says the observer.

While ads from Abbey’s number one rival Halifax constantly refer to the bank’s “extra” interest rates, he wonders whether the contrasting soft-soaping of Abbey customers will actually wash.

Other critics point to the hazy logo created by branding agency Wolff Olins and wonder how it fits in with the promise to clarify banking. The ads, created by TBWA, show people sitting in a café as a building across the road is pulled out of its foundations and turned on its head. Strangely, the café’s customers pay little attention, occasionally looking round at this odd event then getting on with drinking their tea or reading the paper. This may inadvertently suggest the deadpan reaction of Abbey customers to the relaunch. A simple jingle is sung in a tuneless, childlike voice. Some see a childlike quality to the whole relaunch.

Abbey says the ad shows that banking does not play a central role in people’s lives and is meant to prepare the public for more product-specific ads later on. While £25m will be spent on advertising the relaunch, only £11m will be spent making the changes that the ads will announce.

The executions may be subtle, but branding experts believe banking rides on pricing and products. “For years Abbey National has been on the brink of brilliance,” says Jasmine Montgomery, director of strategy at brand consultants Futurebrand. “But it has never taken the leap. It has had this insight that banking is too complicated for consumers, but it has never delivered before and I am not sure it will.”

Montgomery thinks the rebranding focuses too much on product descriptors and packaging, and not enough on product innovation. “Banks succeed or fail on pricing strategy,” she says, yet Abbey has been surprisingly quiet about the interest rates it offers.

Abbey customer director Porter says there have been innovative products, such as a single page to display all of a customer’s financial information to be used by intermediaries. And he believes that there is more to banks than just price. “You won’t find an APR anywhere, or the double glazing sales feel you get in a lot of bank advertising. There has to be much more to it than price.

“The market is dominated by acquisition – the mortgage market is focused on customers who switch every two years, but there’s a huge demand for good service and loyalty to be rewarded,” he says.

Some are upbeat about the new-look Abbey and believe it can play on the warm feelings carried over from its days as a building society and values of friendliness and serving the whole family. Paul Gordon, managing director of agency CCHM, says: “Abbey has dug into the DNA of the brand and found it has got highly emotional values and is contemporising them. It can rejuvenate itself, just as Marks & Spencer has done.” But he warns: “Abbey has to be careful and resist the temptation to be overtly commercial in its product development strategy.”

People stay loyal to banks because of service. But they switch because of price. Don’t be surprised if Abbey starts offering greater incentives to new customers.