As ANZ begins shutting down the National Bank brand and
forcing its customers, who have been called the most loyal on
the high street, into a merged bank, the million dollar
question remains - will they stay?
The New Zealand chief executive for ANZ - David Hisco - is
confident they will.
Some will be coaxed away by competing Australian-owned banks
such as Westpac, BNZ or ASB, whose ad proclaims "Farewell
Black Beauty", or to state-owned Kiwibank which cheekily
claims in billboards it is "New Zealand's national bank".
But Hisco says customers will stay because the incorporation
of National Bank creates a better proposition.
It's "the power of two", according to commercials by Patrick
Jane, the actor from US series The Mentalist, who is the face
of the bank in Australia, New Zealand and 30 other markets.
ANZ has said it will phase out the National Bank brand over
the next two years. It has owned the bank since 2003 but ran
it as a separate business.
It acknowledges there are challenges as it attempts to meld
the two brands.
Hisco says ANZ looked at past New Zealand bank brand mergers
such as Westpac Bank removing Trust Bank from 1996 to 1998,
and Postbank being taken over by ANZ in 1989.
Kiwis expected the closure of the National Bank brand would
mean closing branches, sacking staff and leaving communities.
"We're doing the opposite," Hisco says. "With two different
banks we reached 78 per cent of [the country].
"With [the] merged banks allowing us to open new branches
we'll reach 90 per cent of New Zealand, spending $100 million
along the way," he says.
"You are going to lose some people along the way."
Since the death of the black horse, only 400 to 500 National
Bank customers have left.
"A brand is more than a logo and is about better propositions
and the only people who are going to leave are those who have
no internal relationship with the [ANZ] brand," he says.
But the National Bank brand has been finely crafted and even
under ANZ ownership since 2003 attracted strong loyalty.
Before ANZ bought National Bank it was British-owned, yet
through astute branding it emerged as a New Zealand entity.
ANZ accepts it faces a long haul with pressure to hold on to
customers when fixed rate mortgages fall and they shop
Andrew Inwood, an expert on Australian bank branding at
CoreData Research, backs the idea that customers - or at
least younger people - are not so attached to bank brands.
"They treat their bank like a utility [looking at the best
deal] and do not get caught up in the branding like older
customers," Inwood says.
It does matter more for older customers, who typically have
more money, and banks spend tens of millions each year on
brand advertising trying to prise customers away from the
"Branding is still very important," says Westpac New
Zealand's marketing and customer experience general manager,
People are attracted to a brand by their own personal
experiences and the forced move to ANZ provides
Any movement of people won't happen overnight and Westpac
isn't focused only on ANZ, Jager says. People review banks
when they have a change.
"It's not just bringing over National Bank customers - you
can't just be focused on a moment in time," she says.
David Tripe, director of the Centre for Banking Studies at
Massey University, won't speculate on how many customers are
up for grabs but says the brands for National Bank and ANZ
are very different.
All customer research suggests National Bank had a good
customer service profile while ANZ has undertaken a big push
"It had got to the stage with ANZ in the late 1990s [where]
the only way they could go was up," Tripe says.
"It's been a relatively long and difficult process and they
have certainly made an improvement to the brand."
Branding by itself won't be enough to shift anybody from ANZ,
but in the new environment customers are primed to consider a
ANZ has to be wary of any problems with service or technology
that could put pressure on retaining these customers, he
All the competing banks see opportunities from National Bank
customers being disaffected or not being engaged in the ANZ
ASB - owned by Commonwealth Bank of Australia - markets
itself on its customer service.
ASB marketing and online general manager Roger Beaumont says
the market has become more fluid with simplified processes
for people to switch banks.
"Since the National Bank announcement we have noticed a
further upswing in people switching," he said.
The BNZ - owned by the National Australia Bank - also fancies
its chances and has pumped a significant amount of research
into prospects for picking up former National Bank customers.
Kiwibank draws a different clientele but both score highly as
Kiwibank spokesman Bruce Thompson says in banking surveys,
National Bank customers are the most loyal.
Over the past three weeks the number of new customers had
increased from 1300 to 2000 with a disproportionate number
from National Bank.
Bank brands are often elaborate and honed but it's an
advertising truism that it's hard getting bank customers to
Ad people say - and David Tripe agrees - that clients are
loyal partly out of fear that switching brands will lead to
major problems with personal finances.
"The evidence is that the fear of those happening is more
than likely to occur," Tripe says.
Some believe that despite the fight for ANZ to retain its
National Bank customers, the shift from a dual brand to a
single-brand strategy has been inevitable since ANZ bought
National Bank in 2003.
Branding specialist Inwood says that since the global
financial crisis, banks around the world have been forced
into acquisitions to increase market share.
Running two brands was more costly.
Australian banks such as Westpac - with its New South Wales
brand St Georges Bank - used its second brand as part of a
regional strategy in complementary markets.
In this country - and perhaps surprisingly, given the
affection for the black horse - the shift to a single-brand
strategy is a work in progress.
But now the black horse has gone, the change is blunt.
More transitional ads are coming, but for former National
Bank customers the honed imagery of the New Zealand-localised
black horse ads is being replaced with the Mentalist talking
about the power of two.
ANZ has taken over sponsorship of cricket coverage and the
Young Farmer of the Year award.
But for the most part, advertising will be the same as that
used in Australia and focusing on its international profile
as a bank operating in 32 markets.
Former National Bank customers used to images of arcadian New
Zealand scenes are now part of a bigger world.
- by John Drinnan of the NZ Herald