Brand Names Key as Banks Overlap Local Markets
Zack, Jeffrey, American Banker
It's been more than two years since First Alabama Bancshares became Regions Financial Corp., a name change driven by the bank's move into four other southeastern states.
But only last month did Regions drop the First Alabama moniker at its Birmingham-based lead bank.
"First Alabama was a name that we have a vast amount of equity in," said J. Stanley Mackin, Regions' chairman and chief executive. "We've got a lot of emotional-type of attachment. But from a business standpoint, I think it's a good decision."
Consolidation, accelerated by falling barriers to interstate banking, has produced a slew of new bank names in recent years - Regions, FirstMerit, and NationsBank, to name just three. Of course, many venerable names have ended in the graveyard, among them Shawmut and Society.
And proving that turnabout is fair play, Chemical lost its name this spring only a few years after deep-sixing the esteemed Manufacturers Hanover brand.
The changes reflect the wider geographical span of fast-growing institutions that have outgrown the local monikers of predecessor banks. But executives are also working to burnish their identities with tried-and true marketing and brand-building tricks that have long been used at consumer products companies.
Mr. Mackin said his bank opted for a cautious approach in retiring the "dear old" First Alabama name. Two years ago, advertisements began to note the Regions affiliation.
"We've spent the proper amount of time and, I think, advertising effort and so forth to properly introduce the name," said Mr. Mackin. "It's timely."
The benefits will include a common identity throughout the Southeast, as well as substantial savings in the advertising and marketing budget.
Amy Brinkley, director of marketing at NationsBank Corp. in Charlotte, N.C., noted that blockbuster brand names like Coca-Cola and McDonald's had been developed and nourished for decades.
"Those great brand names didn't happen by accident, nor did they happen just because someone was focused on advertising and creating an image in terms of what the media could put forth," said Ms. Brinkley. "Brand management really is a concept that has to be embraced throughout the entire company. Because, in the end, the brand really is what the customer says the brand is."
The advantages of a single name include the opportunity to gain marketing muscle. NationsBank, for example, spent $40 million to be a sponsor of the 1996 Summer Olympics in Atlanta.
"We felt that was a tremendously powerful way to build a new brand by associating and affiliating with a great institution that shares similar values to our own - teamwork and winning," said Ms. Brinkley.
Indeed, banks - not unlike Nike, Wheaties, and other brands - put a premium on fostering a winning image.
"It's the nature of the company you are surrounding yourself with," said Julia Adamsen, senior vice president of marketing at KeyCorp in Cleveland. "Winners surround themselves with winners, even in imagery and brand creation."
KeyCorp is among a handful of banking companies that sponsor an arena home of a professional sports team. (See story on page 6A.)
But at the same time, it's worth asking: What are banks giving up when they forge a new identity?
"There is absolutely no question that some of the brands of predecessor companies, and many of our predecessor companies, have been great local brands," said Ms. Brinkley of NationsBank, which agreed to buy St. Louis- based Boatmen's Bancshares last summer.
"In many cases, they've had tremendous awareness levels associated with them," she said. "But to continue those brands would really run counter to our longer-term strategies. And we feel very, very good about the development of our brand in such a short period of time."
The NationsBank name was introduced in 1992 after NCNB merged with C&S/Sovran.
"A lot of thought goes into the introduction of the name," said Ms. …