Monday, July 16, 2007

Mid-State & Rabobank & Brand Equity

According to their press release Mid-State Bank & Trust will be switching to their new parent's, Rabobank, brand name:

The Mid-State franchise will be integrated into the Rabobank organization immediately but will continue to operate under the Mid-State Bank & Trust name until the Fall, when it will be renamed “Rabobank.”

So much for the tremendous local brand equity demanded by the Mid-State Bank name on the Central Coast. Seems to me that focusing on "synergies" behind the scenes such as infrastructure, processing, outsourcing, advertising economies of scale, and perhaps even more visible but still not completely destroying the brand equity areas such as best practices, products/services, management structure, etc. would make the most sense.

It's not as if Mid-State was a teeny tiny acquisition for Rabobank N.A. (though their ultimate parent is much larger admittedly). Though I presume the idea is that Rabobank, in the long-run, intends to expand their North American presence considerably and their plan is to do so under one brand -- which has obvious benefits in the long run.

I wonder if a slower approach was considered -- stick with the Mid-State brand until Rabobank N.A. has a larger piece of the pie in the U.S. then announce the change as a simple "same bank, same ownership, different name". It would be less abrupt and alienating for customers. Right now I'd argue that the Mid-State brand has more stickiness value in its markets than the Rabobank will for quite awhile. Why alienate (and probably lose) more customers before Rabobank has even had an opportunity to prove itself?

Then there's how similar sounding "Rabobank" (especially when spoken fast) is to a criminal activity that banks (and their insurance companies) tend to frown upon. Apparently "Rabo" is a combination of the letters from the original two Netherland-based banks that merged in the 1970s. Rabobank is huge but has a much smaller presence in the U.S. I wonder if they'll make some tongue-in-cheek ads in the U.S. about their name? :)

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