Bringing Back The Bull

On October 5, 2009, BofA announced a 20 M USD marketing campaign for Q4 2009, aimed at reintroducing its newly acquired Merrill Lynch Wealth Management Group. The campaign is intended to “put the brand back on the map”, after the acquisition by BofA in September 2008, in an effort to prevent the company from disappearing into the abyss. Prior to its implosion, Merrill Lynch was seen as one of the most respected brands amongst investment banks, retail brokerages and investment managers.

The campaign will focus on three distinct elements of the consumer value proposition, including the personalized relationship between financial advisors and their clients, the “exponentially better advice” Merrill Lynch will now be able to offer and the benefits resulting from the joining of forces in terms of combined distribution, scale and service offering.

Financial Services – A Crisis Of Confidence

Due to the incessant stream of bad news coming out of the industry, financial services in general are now suffering from a “crisis of confidence”, meaning brand values have plummeted. According to Interbrand’s “2009 Financial Services Research Report”, 6 out of 10 consumers now report they no longer trust financial services providers. The financial services industry has long been characterized by low brand differentiation, meaning in the consumer’s eye, all banks have been “painted with the same brush”.

Whereas overall confidence in financial services brands has plummeted, the truth is consumers and banks still need each other – after all, someone needs to help them manage their investments once the economy starts coming out of hibernation mode.

It is far from certain what this will ultimately mean for the competitive landscape – according to Interbrand, “the financial services crisis has caused an unprecedented shift in the financial services category. It has gone from a low involvement, inertia driven category to one driven by emotional, brand influenced criteria”.

Historically, banks have invested heavily in improving their operations and expanding their service offering, but have not made the same level of investment in their brands. The recent move by BofA signals this may be about to change – 20 M USD is more than Merrill Lynch ever invested in a marketing campaign of their own. The recent move by BofA to attempt to revive the Merrill Lynch brand may thus signal a revival of branding in the wealth management industry.

It is clear that established brands have been heavily impacted by recent events, with consumers’ brand affinity polarized between those that are seen as positive and negative. Whereas Merrill Lynch currently suffers from a negative consumer perception, it can build on a solid brand platform to launch a comeback. The new brand campaign lays the groundwork, by reconnecting the brand with values that appeal to consumers, whilst at the same time being seen as attainable.

Incumbents Are Reshaping The Industry

Increasingly, competitive forces are reshaping the market, leading to a higher potential for substitution and rapidly dropping barriers to entry. The overall trust erosion in large brand names mean consumers are looking for new brand leaders – giving incumbents a wide open door.

Increasingly, peer-to-peer networks like Tiger 21 are enjoying strong growth, due to their combined value proposition of independence and a strong focus on the combined brainpower of their members. Consumer portals like Switzerbank.com help Independent Financial Advisers (IFAs) showcase their skills and market themselves directly to potential customers.

On October 1st 2009, Credit Agricole launched bforbank.com, the world’s first fully online private bank, targeted at the burgeoning segment of “mass affluent”, who are looking for private banking services at a budget price point. Finally, established online brokerages like Charles Schwab are moving up the value chain by offering value-added services like webinars, (semi)-personalized advice and high-performance trading platforms.

Even within the industry, competitive forces are rapidly increasing the pace of change. Bank valuations are extremely attractive, meaning acquisitions become an increasingly feasible (and attractive) proposition for anyone looking to gain rapid market entry. Widespread brand erosion within the industry has opened the door for “trusted brands” like Virgin to come in the back door through brand extensions. Recent advances in technology mean one of the traditionally high entry costs has dramatically dropped, and consumers are increasingly comfortable with interacting their financial services provider over a multitude of online channels.  Finally, consumers are increasingly organizing themselves in “tribes” and looking to connect with brands with emotional meaning.

Help2Launch

Taking all of this into account, the Merrill Lynch brand was a prime candidate for a relaunch. In spite of its strong historic fundamentals and the clear power of its iconic bull, its brand was tainted heavily by its implosion and the events that came to light during the financial crisis. BofA understood it was sitting on a potential brand leader, and needed to act to integrate Merrill Lynch into its brand portfolio. Consumer research carried out internally showed that its value proposition was unclear and not aligned with consumer needs.

The “help2”-campaign capitalizes in key trends in the marketplace by developing key messages towards specific target segments that are in line with their prevailing needs and sufficiently differentiated to appeal to potential new customers. Slightly redesigning the logo meant they were able to continue to further build on its strong iconic power, whilst at the same time introducing a clear element of change – and moving the brand closer to that of BofA. The campaign was built on solid internal research coming out of Merrill Lynch,  providing clear anchors around which to center the new brand.

It remains to be seen whether BofA will succeed in launching the Merrill Lynch brand as a strong player in the wealth management industry. Even though there appears to be a strong commitment to relaunch the brand, there is a clear danger of backlash – the fact that BofA, which received $45 billion in taxpayer bailouts, will spend $20 million to relaunch the Merrill name and logo may not sit well with some people.

Also, there is clear evidence that existing players in the industry have already at least partially claimed the brand space Merrill Lynch is trying to move into – with UBS (“You & Us”) only one example amongst several. First reactions from within the industry have resulted in echos of confusing messaging, and where the campaign makes a first effort at segmentation, it could have been more targeted towards specific and well-defined micro-segments. Finally, it appears Merrill Lynch has made little or no efforts to execute the campaign across online channels, thereby missing an opportunity to make a large impact in a very cost-effective way.

According to Interbrand, “trust and confidence in the brand has become the most important driver of consumer decision-making in retail brokerage.” It remains to be seen whether the bull will once more win consumer’s hearts – as well as their pocketbooks.