NEWS that Clydesdale and Yorkshire Banking Group (CYBG) have agreed to buy Virgin Money for £1.7bn was generally welcomed in the City. The deal provides scale and greater national coverage for CYBG, ,access to enhanced computer systems and business banking opportunities for Virgin Money. It also offers benefits to Scotland with the group headquarters located in Glasgow.
As part of the deal, CYBG announced that the Clydesdale and Yorkshire brands will disappear and will be replaced nationally by the Virgin Money Brand. This relatively swift announcement about the future brand does raise some concerns, as rebranding of any organisation is not simply a name change and an exchange of logos.
Organisations build up their culture, heritage and reputation over many years. Customers develop their perceptions of brands through a variety of experiences and touch points with the physical branches, the internet, employees, the service that is provided and messages in advertising and the media.
That is why rebranding on its own does not change opinions. History is littered with examples of companies such as British Airways, Royal Mail and Gap spending large sums on failed rebranding exercises where little changed apart from the name and the signage.
There is a challenge for CYBG and its senior management team. Virgin’s values are communicated as heartfelt service; being delightfully surprising; red hot; straight up while maintaining an insatiable curiosity; and creating smart disruption.
It delivers its banking services through innovative lounges with free coffee, biscuits, newspapers and even pianos. These are are more akin to airline lounges than bank branches.
Those in Glasgow and Edinburgh are always busy with customers treating them as social hubs rather than places to deposit or withdraw cash. Clydesdale and Yorkshire have been around since the mid-1800s and still operate with a traditional bank branch format incorporating a counter, tellers and queuing systems. The values they espouse on their websites relate to being a bank that plays its part in the community and has a commitment to always being the local bank.
Yes, both CYBG and Virgin Money have a strong internet presence and more customers are doing their banking online but their positioning and cultures are very different. There is a danger that rebranding the Clydesdale and Yorkshire branches could damage the positioning of Virgin Money while, at the same time, challenging the notion that the new bank has a commitment to being a local one. Customers who have signed up to the lounge experience at Virgin Money may be disappointed when they pop into their local Clydesdale.
From a Yorkshire and Clydesdale perspective, their customers may be confused as to what the change will mean for them and whether that community-based relationship in their smaller branches will disappear.
Therefore, while there may be major benefits in relation to scale and national coverage, care must be taken in rushing headlong into a rebranding exercise that could destroy any goodwill built up for all three brands over many years.
Gradual changes need to be made across all of the customer facing activities of the banks to match the values the selected brand is going to promote and, more importantly, deliver.
Customers are not fooled by new logos and colour schemes. They judge a bank on the service that is delivered. Rebranding an organisation is a very expensive business; let’s hope CYBG takes its time and gets it right.
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules here