Mergers and Acquisitions: A Challenge to Brand Loyalty

In the late 1990’s, I discovered ShareBuilder—an easy way to buy stocks (and even fractions of a single stock) through regular, automatic purchases online. Far from being a savvy investor, I found ShareBuilder to be the easiest and least stressful way to get involved in the stock market because, after all, how risky could a $5 or $10 weekly investment be to a neophyte like me?

In the late 1990’s, I discovered ShareBuilder—an easy way to buy stocks (and even fractions of a single stock) through regular, automatic purchases online. Far from being a savvy investor, I found ShareBuilder to be the easiest and least stressful way to get involved in the stock market because, after all, how risky could a $5 or $10 weekly investment be to a neophyte like me?

I set up an automatic transfer from my checking account to my ShareBuilder account, and picked out a few popular brand names to invest in. It took a few years, but eventually, I had built up a pretty nice little portfolio of stocks and started learning more about P/E ratios and dividends. I loved how easy it was to invest, and felt like the brand really understood my needs with easy-to-understand online content. I became a ShareBuilder evangelist—encouraged my friends and family to open accounts, started a small investment club for other neophytes, and even joined Motley Fool (another “keep it simple” brand) to gain insights into stock ideas.

ShareBuilder and ING Get Married
In 2007, ShareBuilder was purchased by ING Direct and I got even more excited. I already loved the ING brand (I had opened an account with them a few years earlier) because in my mind, they were the poster child for “financial services made easy.” It seemed to be the brand match made in heaven—the blending of two brands that truly “get it.” I could log in once, and easily click back and forth between my ING and ShareBuilder accounts.

One day, a banner ad on ING caught my eye. It basically pointed out that if I loved ING, I’d love having an “Easy Mortgage” with them… So I called, and within 30 days I had refinanced with ING. That process alone made me an ING customer for life as it was so simple and so stress-free, I couldn’t believe I hadn’t switched to them sooner! I continued to brag about the simplicity of doing business with ING in addition to my stock portfolio-building behavior with ShareBuilder.

But in 2012, everything started to change.

Capital One Joins the Party
Capital One purchased ING and its subsidiary, ShareBuilder. What happened next left me shaking my head …

First, CapOne changed the location of the ING Direct website. I know it sounds simple to those of us in marketing, but when I memorize a URL/have a link in the nav bar, it’s difficult to get me to change my behavior.

Then, I couldn’t access my account through the Capital One site, there’s no way to log into your ING mortgage, as it had been rebranded as Capital One 360 (oh yeah, I can easily remember that new brand … Not).

Next, with interest rates at an all-time low, I decided I should refinance. I reached out to ING since they had been so good to me, but the CapOne experience was less than ING-like. The online site didn’t let me upload documents easily; I was passed from one mortgage specialist to another; I went days without knowing the status of my loan; the loan doc requirements were far greater than the first time around. Net-net, the brand change was also a corporate culture change.

Funnily enough, I had assumed all along that the ING brand had ceased to exist, however, I continued to see TV spots promoting ING. And more recently, an announcement that ING had become Voya Financial. Huh?

Yet Even More Change
The final straw came just this week. An email announced that Capital One ShareBuilder is becoming Capital One Investing. I must admit, I wanted to weep. Was nothing sacred?

Thank God the announcement reassured me that they will still refer to their online business as ShareBuilder (somebody must have recognized the value of the brand name), so I can only pray that it will be business as usual.

But take this as a marketing lesson… When one company gobbles up another, customers feel a sense of loss, and the new management doesn’t always successfully replicate the brand essence.

This was overwhelmingly apparent when I was part of the acquisition team at 1st Nationwide Bank (FNB), back in the 1980’s. We purchased many failing thrifts and changed their names to FNB literally overnight.

At the time, I didn’t appreciate the stressfulness that action would have on its’ customers. Now that I’ve experienced the pain for myself, I’m hopeful it will make me a more sensitive marketer. Brands do build personas and customers feel a connection to them. Personally, I’m still pining for my old ShareBuilder and ING relationships, but it looks like that ship has long sailed.

How an Already Damaged Reputation Got Worse and Worse

We’ve all witnessed how impaired corporate or brand image can undermine both consumer trust and financial performance. Recently, Target’s CEO was relieved of his duties because of the massive customer account security breach which occurred during his watch. The poster child of negative reputation, at least in the U.S., has been British Petroleum. BP’s then-president of U.S. operations was forced from office because of some ill-conceived and dismissive language, and BP’s corporate behavior since the Gulf of Mexico oil disaster has been of little help in image recovery.

We’ve all witnessed how impaired corporate or brand image can undermine both consumer trust and financial performance. Recently, Target’s CEO was relieved of his duties because of the massive customer account security breach which occurred during his watch. The poster child of negative reputation, at least in the U.S., has been British Petroleum. BP’s then-president of U.S. operations was forced from office because of some ill-conceived and dismissive language, and BP’s corporate behavior since the Gulf of Mexico oil disaster has been of little help in image recovery.

British Petroleum has recently “celebrated” four years of cleanup and payout in the Gulf by announcing the end of active cleanup of the 500 miles of coastline from Louisiana to Florida, the result of 87 consecutive days of oil pouring from the Deepwater Horizon rig of its Macondo Project. After dealing with issues over the health and economic impact by setting up a multibillion-dollar cleanup fund, conducting a massive image PR repair campaign, and paying huge federal fines, BP had originally agreed to keep its corporate cash register open for environmental and business claims as long as they were what the company termed as “legitimate.” Though this began as an eagerness to address and settle these damages as a way to manage its impaired reputation, it has now devolved into legal, and very public, name-calling between BP and claimants.

Not including Federal fines, BP’s payout to Gulf Region businesses and residents has thusfar totaled almost $10 billion. The sheer volume and financially cascading nature of these claims, it turns out, was way beyond BP’s reckoning; and the company began to openly challenge many of them as “nonexistent and artificially calculated” in court. In mid-2013, BP even took out full-page ads in The Wall Street Journal, The Washington Post, and The New York Times, claiming that attorneys were filing dubious and hyper-inflated claims on behalf of Gulf-area businesses. As stated by a BP spokesperson at the time, “The litigation is seeking to rectify the misinterpretations of the settlement that have led to inflated, exaggerated or wholly fictitious claims … will continue unabated.” Not exactly image-restoring language, and a direct slap at the federal judge who drafted the financial agreement.. By the Fall of 2013, BP’s attorneys were appealing one out of every five claims received.

BP was also receiving massive negative publicity due to both real and suspected improprieties among its legal staff involved in processing claims, with one lawyer fired for accepting fees from claimants and another lawyer resigning. The suspicions were so strong that the Freeh Group, a firm headed by former FBI director Louis Freeh, was brought in (by a consortium of attorneys and BP) to investigate. Numerous “inappropriate” actions by the claims department were uncovered in the investigation; and one sidebar result was that, following the publication of its report, the Freeh Group took a more visible and active role in overseeing claims.

One result of this outside claims takeover has been more rigorous inspection of individual claims, even taking back payments (which Freeh’s team was empowered to do), if the original payment was deemed excessive or illegitimate. BP has been public about its support of the added scrutiny; while area attorneys and local government and other civic officials have noted how this has stifled claims filings.

Still, even as BP has pulled back in the Gulf, and gotten people to stop filing, it has left continued sore feelings by claimants, and those whose claims are either under investigation or still yet to be resolved. An example of this is a shrimper from Slidell. After extensive documentation consisting of multiple years of tax returns, financial statements and shrimping reports showing the vast sums the Louisiana shrimper had lost over several seasons, directly as a result of the Deepwater Horizon spill, he was paid about 7 percent of what had been claimed. To keep his business going, he had to take out loans. He also refiled his claim, but BP delayed it by beginning yet another investigation into his filing papers. As he told the area press: “BP is giving me the runaround.” Is this really the way to reclaim trust and bring back its image?