Here is a top line summary of my presentation:
Banks were a symbol of trust and credibility until Sep 15, 2008 when Lehman Brothers collapsed. Reckless behavior was cross-border and had its consequences also in Latvia, where the government bailed-out Parex bank and had to deal with its liquidity crunch.
As the result, Parex reputation was deadly damaged. Its image perception was a barrier to attract new deposits – it was associated with its previous owners but not with a bank you would trust your money and the brand was linked to the collapse of the country (Latvia was bailed-out by IMF and European Commission). Needless to say, the damage was mirrored also in the reputation-ranking top.
Re-branding was the only commercially viable solution. Build a brand driven business to attract new deposits, restore credibility and build a new value.
It was not about changing a new logo, but building a new bank.
1) Started at home by understanding what’s special about Parex brand and what should belong to the history.
2) Involve stakeholders across all levels to identify brand’s strength and weakness.
3) Build a single minded positioning: a new role for the business that captures market opportunities and society needs.
4) Make positioning propositions relevant for business areas.
Implementation beyond visual identity:
(1) Cultural change & internal communication
From: closed & elitist
To: open, transparent & accessible
(2) Making a business sense to organizational structure
From: various independent and competing “republics” (units)
To: synchronized and efficient units
(3) Cost efficiency (-40% in 12 months)
From: über (!) excessive & lavish lifestyle
To: business efficiency
Primary, business stabilized and in particular saw a growth in corporate deposits. That led to repay the state deposit prior the set deadline. Citadele’s liquidity indicators substantially exceeded the requirements.
Awareness results after two weeks of the launch indicated that 88% (in higher income group it was 99%) had heard of the new brand.
Needless to say, the negative publicity was eliminated: only 2% of publications within 8 months after the launch could be associated as negative towards the new brand Citadele.
What’s behind a success?
- Top management’s total commitment & involvement
- Stakeholder and shareholder involvement
- Thorough structural changes
- Ability to make a fairly quick cultural turnaround internally
- Hiring brand business experts – Wolff Olins
- Highly political environment and strict confidentiality
- Proving to shareholders that re-branding is not a cost. Significant costs would arise by not rebranding it.
- Immediate results were expected. Although, we know that cultural change doesn’t happen overnight.
The chart bellow illustrates a timeline of Parex liquidity crunch. It’s important to note that one of the most critical milestones for the business was to reach an agreement of restructuring syndicate loans. When CEO Nils Melngailis successfully negotiated and stabilized the business, only then could seriously start a work on a brand. The new brand strategy and identity recommendations and plan was presented to the Council by mid-August 2009. It was stressed to launch the new brand immediately in a staged and economically efficient manner. The new brand was launched 12 month later – on Aug 1, 2010.
Re-branding is not a one time-project. It is a kick off for a continuous business and cultural journey. Thus, the new Citadele management team is expected to continue building a value by brining out new products and delivering brand’s experience. In fact, it would be about the right time since the kick-off of Citadele last year in August.