Understanding how customers would react to ANZ’s decision to close the National Bank meant it was able to come up with a strategy and tailor its comms accordingly to limit the damage.
The Challenge
In September 2012, ANZ confirmed ongoing speculation that it was sending the National Bank brand to the glue factory and merging it with the ANZ brand.
Prior to 2011, ANZ had languished a clear last among the major banks in terms of preference and customer service. The National Bank in comparison was traditionally much stronger, beloved by many customers and well-renowned as a premium brand through its associations with Vivaldi and the black horse. Research suggested nine percent of customers planned to switch immediately if the brand changed, other mergers saw attrition rates of between four and 15 percent and local analysts suggested it could be as high as 40 percent. Not surprisingly, its competitors were ready and waiting with aggressive switching strategies to make sure they did.
Simplifying the business and bringing it under one brand was a challenge of enormous magnitude that involved almost two years of detailed planning. And it encompassed two major transformational changes: 1) Migrating more than one million National Bank customers to a new brand (an emotional comms task) and 2) migrating more than one million ANZ customers to a new set of products and internet banking after the superior National Bank system was implemented (a functional comms task).
The campaign carried with it a massive amount of risk. And with two million customers on its books, it required what is arguably one of the biggest and most complex marketing campaigns ever undertaken in New Zealand.
The Response
Synthesis of existing qual and quant research, data analytics and an exhaustive analysis of worldwide case studies around mergers led to the development of a four-stage approach to communicating the change to staff, customers and the broader market: 1) Prepare: build the stature and presence of the ANZ brand in the preceding 12 months, and begin to bring the brands together to lessen the shock of eventual announcement. 2) Announce: address the challenge of communicating the brand change immediately and simultaneously to government, markets, media, staff, customers and the rest of New Zealand. 3) Reassure: ensure the key reassurance messages around what wasn’t changing were heard, understood and believed. 4) Excite: effectively communicate the proposition of the new ANZ to customers and the wider market.
Consumers don’t like change. And a change of this magnitude would be openly rejected if it got it wrong. They were particularly unforgiving of a bank making them do things they didn’t want to do. So to limit the defections, a value and vulnerability model was built to determine where greatest risk of customer attrition lay. This was used to drive the communications strategy, executed through all channels and on a continuum from high complexity B2B to low complexity B2C relationships. And communicating the differential impacts of the product changes for one million of its customers required 73,000 different letter variants.
Research showed that customers saw the brand shift as a highly emotional process and ANZ likened it to the four stages of grief – shock, anger, rationalisation and acceptance. This guided its approach to the messaging strategy, with the role of comms to try and move customers through this process as quickly as possible.
The core insight boiled down to a simple equation in the customer’s minds: jobs will be lost + branches will be closed + my history with the bank will be forgotten = a big drop in service.
Early advertising concepts were tested in focus groups. And ANZ says this was perhaps the single most valuable thing it did, as it led it to simplify the messages down to a few key points that directly addressed customer concerns.
ANZ didn’t try to be too clever with the creative. It was a case of the most simple metaphor being the most powerful – ‘The Power of Two’. But the execution was certainly complex, and it revised, refined and finessed creative and media executions many times until they were as simple and sharp as possible. It also found that customers don’t relate to the bank as an entity, they relate to the people they know who work there. Therefore staff had a strong presence in the advertising. And those messages were also regionalised to 18 provincial centres to reassure customers of individual communities.
ANZ knew the brand announcement would generate significant customer, media and competitor reactions, so it mapped them out in detail. When the initial flurry of excitement occurred following the announcement it was well prepared and this gave it the confidence to ride out the noise and continue executing the strategy regardless.
A key part of that strategy was to communicate the key announce and reassure messages through paid, owned and earned media to its entire customer base within hours of the announcement. This required a massive communication blitz and within a matter of hours all 9,000 staff were briefed (stock exchange rules mean ANZ needs to brief the market first, so it wasn’t able to give any of its staff a heads-up beforehand), paid media ads were dispatched, more than 1.4 million direct comms were lodged, social media comms were activated and campaign websites went live. This required precise planning and co-ordination of over a dozen agency, production and media partners and the entire ANZ marketing team.
It knew it was imperative to quickly win the hearts and minds of its employees, so staff communications were also meticulously co-ordinated and executed. All customer-facing staff were reached through a combination of face-to-face meetings, calling trees and live chat with chief executive David Hisco. It was determined that no staff member would face customers the following day without having the opportunity to hear about and discuss the brand change.
To actively block out competitors’ responses, ANZ booked lead positions across all media, securing the highest impact billboards in all the main centres, leveraging its premium first-in-break spots through its One News sponsorship, getting its press ads at the front of the main papers, booking Adshels near the major branches and keyword targeting display ads to appear on any story that featured the merger.
Competitors responded as expected, but the strategy to block them indirectly by tying up all the best media properties well in advance meant they were relegated to inferior media placements with reduced impact.
One week after the announcement it conducted another focus group to understand customer reaction and ran online customer forums, including an innovative closed online community, to check specific concerns, which led it to tweak and upweight individual executions.
The results
The strategy worked brilliantly and all five of its goals—retain National Bank customers, create awareness of key messages, grow the brand, grow the business and industry recognition—were achieved. 99 percent of customers were aware of the decision and 70 percent were aware of the key messages after the first week. And from being the weakest brand in the market in 2011, the ANZ brand has grown remarkably. Brand consideration has increased by ten percent in two years while competitors have all stayed flat. Now the ANZ brand is ranked stronger than Westpac and BNZ across brand image metrics and has surpassed ASB on many (Ipsos).
Industry benchmarks suggested with best practice a minimum increase in customer attrition of 2-4 percent could be expected. And while the numbers are confidential, suffice to say, it was better than best practice.
After the announcement, the New Zealand arm raked in a cash profit of $699 million, up four percent compared with the preceding half, and achieved market share growth in both home loans (2%) and deposits (5%) in the first quarter. Partially as a result of the smooth transition, ANZ was named as 2012 New Zealand Bank of the Year by The Banker magazine and New Zealand’s best-managed bank 2012 by The Asian Banker.
Six months on, ANZ has set a new benchmark for global bank brand mergers. The brand is now a considerable strength, a consistent marketing strategy has given the business momentum and the National Bank’s iconic black stallion (who, in a strange twist of fate, was put down in the same week the announcement was made) got the send-off he deserved.
