Magazine article Marketing

High Street Banks Line Up to Rival Egg Online

Magazine article Marketing

High Street Banks Line Up to Rival Egg Online

Article excerpt

Can Egg maintain its position as the UK's top Internet bank by extending its brand?

Prudential announced last week that it is to sell part of Egg, the UK's biggest internet-only bank, with about one million customers and [pounds]7.5bn infunds.

The sale is expected to value Egg at about [pounds]2bn, a far cry from the [pounds]4bn it would have attracted before the recent dotcom market crash, but not bad for a brand launched from scratch less than two years ago.

Egg's formula for success has been simple. It was first to market, was trusted because of its Prudential pedigree and delivered products that, with the exception of some technical hiccups, lived up to a simple value-based promise.

But Egg's market will change dramatically this year with the launch of big me-too brands from Abbey National, Halifax and Lloyds TSB.

Marketing asked two financial branding experts for some pointers on how Egg can stay ahead. Paul Gordon is managing director at financial services ad agency CCHM, whose clients included b2 Savings, American Express and Henderson Investors.

Paul Edwards is chief executive of the Henley Centre, a consumer consultancy which specialises in trend forecasting and works for a number of high street banks and insurers.

                             VITIAL SIGNS egg:
                              Launch                   Customers
Egg (Prudential)        October 1998 One million after 1.5 years
Smile (Co-op)           October 1999    120,000 after six months
IF (Halifax)               July 2000       200,000 in six months
Cahoot (Abbey National)    June 2000          50,000 in one year
Evolvebank (Lloyds TSB)     end 2000      575,000 in three years

DIAGNOSIS

First mover advantage could be a term created to apply to Egg.

But its masterstroke remains the decision to distance itself from not just its parent, but also the financial services industry.

This gave it a blank sheet of paper to build a brand and it has capitalised on that superbly. The best evidence of the brand's strength is that when it had trouble with its site going down and long response times for credit cards, consumers excused it in a way they would never have done with high street banks.

It was also a smart piece of marketing to make sure it had the lowest rates, giving it incredible cut-through in the market.

HHCL & Partners did a great job on the ads. …

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