Mark Ritson on branding: Abbey - a case study in how to break a brand

The lexicon of marketing is predicated on the positive. The phrases we use to describe the relationship between brands and those who manage them are almost always upbeat. We speak of brand building, brand management and brand positioning, for example, without ever considering what the antithesis of such actions might be.

When it comes to the negative impact that marketers can have on brands our vocabulary is much more taciturn. Have you ever heard of brand breaking? Brand mismanagement? What do we say when a brand is unpositioned?

Whatever the terminology, we can certainly apply it to the sad saga of Abbey. Just under a year ago I wrote a column about the rebranding of Abbey National.

I took into account the behaviour of then-chief executive Luqman Arnold, the naive utterances of the head of customer propositions, Angus Porter, the presence of brand consultancy Wolff Olins, the focus on the superficial over the fundamental, and the £11m budget, and concluded that Abbey's rebranding was doomed to failure. In fact, I said Abbey would join Consignia in the 'pantheon of big-budget brand fiascos'.

Not surprisingly a week later, Porter, the man behind the Abbey rebrand, published an angry rebuttal in Marketing. He defended his brand strategy and claimed that I was a self-publicist. Well, at least he was half right.

Ten days ago we found out just how badly brand mismanaged Abbey had been and how broken it had become as a result.

When you begin to break a brand all the positive things that happen when you build it are reversed. So rather than a positive, supportive culture, you get the kind currently being experienced at many of Abbey's 726 branches - one that is infused with confusion and disappointment.

Rather than a strong employer brand you encounter much lower retention of key employees - just like Abbey's staff turnover, which is currently a whopping 17% higher than the industry average.

Then there is the impact on the bottom line. A strong brand was to be an essential part of Abbey's strategy of focusing on its retail business.

Instead, the weak brand that Porter created has had a catastrophic impact on Abbey's core business of customer lending.

New mortgage lending dropped year-on-year from 9.9% to a jaw-dropping 3.1% in 2004. Abbey claimed the resulting fall in retail pre-tax profits of 20% was due to 'business disruption'. Perhaps that is the new business euphemism for 'brand breaking'.

It didn't take incoming chief executive Francisco Gomez-Roldan long to assess the value of the brand strategy he had inherited. Less than four months after Banco Santander's acquisition of Abbey, Gomez-Rolden unveiled a new logo and brought to a close an 18-month case study in how not to rebrand.

Abbey National was a brand that needed work, but make no mistake, this is a case study on brand mismanagement, not on a fatally flawed and outdated organisation that could not be saved.

If we are prepared to believe that brands can be built through management expertise, we must also, by definition, be prepared to accept that brands can be destroyed by the lack of it.

The once great Abbey National is about to be subsumed into its new parent Santander's brand architecture. Three thousand employees in the UK will now lose their jobs as a result of the restructuring.

Meanwhile, Angus Porter will formally leave the company this summer and say goodbye to his annual salary of £578,000. Fortunately, he will receive a parting payment of £945,000 to ease his reported search for 'a new challenge outside Abbey'. Nice work if you can get it.


- Launched in a blaze of publicity in September 2003, the 'abbey' brand was infamously an attempt to 'turn banking on its head'. Despite bold proclamations, a new logo costing £500,000 and £15m in communications, internal issues such as staff morale remained a problem for the bank.

- Abbey was acquired by Banco Santander Central Hispano for £8.9bn in November 2004, creating the biggest bank in the Euro zone and the 10th biggest in the world.

- Abbey's annual results, announced late last month, revealed the scale of the problem its owners face. Market share in the vital mortgage sector slumped from 10.7% in 2003 to 8.6% in 2004. Total mortgage lending fell 14% in 2004.

- The biggest winner in the Abbey saga was undoubtedly Luqman Arnold. After an annual salary of £1.6m and an annual bonus of £2m-plus, he was given a £4m parting payment for his two-year stint in charge.

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