Tuesday 14 April 2009

The Branding of Financial Entities in Crisis: The BOA/Merrill Lynch Example

From the view of branding, one of the more bewildering fields has to be the banking and financial sector. Even in the relatively more staid days of the past, it was not an infrequent occurrence to witness the disappearance of a venerable investment house brand following merger or acquisition. More recently, the attempt by Citi and others to create so-called universal banks left the customer to wonder exactly what the Citi brand actually stood for in light of the bank's separately branded conglomerate companies.

The events of the last nine months have put to into bas relief the devilish difficulty in cobbling together the brands of the acquired and acquiring company in the financial and banking sector. Perhaps the most notable example is the acquisition, with not a bit of US government arm-twisting it would seem, of Merrill Lynch by Bank of America. (Keep in mind that Bank of America itself was the result of a number of mergers and acquisitions that transformed the bank from a West Coast banking operation to a fully national, and perhaps international brand.)

Both the BOA and Merill logos are well known, indeed, the Merrill bull has the status of a branding icon in the U.S. Not surprisingly, therefore, both names and both logos continue to be used to identity the combined company, which seeks to bring together the staid (at least until recent times) of the BOA banking operations with the more free-wheeling brokerage
and investment activities of Merrill. Truth be told, synergies seem to be few and far between for the two companies. In any event, both companies seem to have suffered since the merger,with BOA feeling the sucking sound of Merrill losses in its bottom line, and Merrill suffering a seemingly never-ending exodus of senior talent and, perhaps, some customer erosion.

Find the banking synergies

How has all of this played out from the branding perspective? Last month, Roben Farzed, a senior writer at Business Week, reported that the current loser seems to be Merrill. As he reported in his article in the March 9 issue ("Is BofA's Merrill Lynch Brand Losing Its Edge?"), the Merrill name seems to be heading straight to a branding cliff. Perhaps most notably, Farzed claims that BOA officials are telling their international people to underplay the Merrill name and famous bull logo when flogging the company's services in Europe. The bank denies that there has been a decision to de-emphasize the Merrill name and brand.

Nevertheless, research suggests that the BOA brand is now better received than is the Merrill brand and logo in Europe, a testimony to what corporate failure can do in short order to even a venerable name. If so, this is astonishing, given that the BOA brand is notable for the presence of a logo which suggests the U.S. flag, imagery that would not seem to play well outside of the U.S., and the Merrill bull is well-recognized in Europe. The article observes that "the Merrill Lynch brand is not quite dead yet. It's in hibernation, and it has been since Bank of America bought them," this according to Carri Degenhardt-Burke, a Wall Street executive recruiter. Degenhardt-Burke went to add poignantly,"[i]t's sad."

I am not fully convinced that the fate of the Merrill bull rises to the level of Greek tragedy. What is sad, nevertheless, is how quickly a venerable brand can lose its cache, which in a service industry must surely have a negative feed-back loop which further erodes the value of the brand. I suspect that service brands are even more vulnerable to a precipitous decline in their value than are marks for goods. We may have a way to test this hypothesis if GM enters in some form of bankruptcy, and the public is not convinced that it will reemerge in some form after reorganization, and even more so for Chrysler, where the likelihood of reorganization seems remote, unless Fiat somehow comes to the rescue.

Of course, the BOA/Merrill branding saga is only one of several branding stories that is taking place in the banking and finance area. As a final exam for those of you out there, please answer the following:

1. How is Wells Fargo being branded since it took over Wachovia?

2. What about J.P. Morgan, Washington Mutual (WAMU) and Bear Stearns?

3. How has Smith Barney been integrated brand-wise with Morgan Stanley?

4. What brands are still left at Citi (and was is the current form of the Citi house mark)?

5. Is the Lehman name still being used?

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