The art of building a brand in financial services

My wife and I spent a very pleasant couple of hours the other day at the Royal Academy's excellent After the Fall exhibition of 1930s American art. This was followed by a spot of lunch at Cafe Concerto and excellent coffee, biscuits and fresh fruit over at Sir Richard Branson's gaffe on Haymarket. The gaffe in question being the Virgin Money Lounge where customers can check in, take the weight off their weary feet, and help themselves to refreshments and newspapers - all free of charge.

Few people know more about the art of building brands than Sir Richard. Despite coming late to the financial services sector, Virgin Money has in a relatively short space of time, run rings round its competitors. In the area of investments, Branson saw the gap in the market for a simple investment for the novice investor by launching its tracker fund (managed by computers rather than costly fund managers) as a retail investment as early as 1995 - well before anyone else. Not only was he able to grasp the power of its simplicity and appeal to the masses, but also succeeded in implementing a management charge of 1% - a fee 12 times that of Legal & General's identical product. Despite this remarkable discrepancy, the fund has been so well pitched in marketing terms and supported by the company's legendary customer services that it has been hugely successful at tapping into the massive market of investment newbies. In one fell swoop Branson had managed to do what conventional investment houses had grappled unsuccessfully with for decades. Indeed, in the wake of Virgin's success, even the mighty Hargreaves Lansdown has in recent years included tracker funds on its roster, having pooh poohed them for years. Though ironically, Virgin's fund isn't among them as its management fee is far too high.

Then in 1997, Virgin saw the potential of shaking up the mortgage market by creating with RBS its One Account with which customers were given the freedom to consolidate the balances of their mortgages, current accounts, savings accounts and loans into one account. By offsetting the net total of all these accounts against the capital sum borrowed for the mortgage, customers were able to reduce the interest payments on their mortgages. It was a brilliantly simple idea. But nobody else had thought of it until then. Needless to say, the product was an instant success and helped this relatively new kid on the block further bolster its position in this otherwise conservative and staid market.

It has to be said that Sir Richard isn't just good at spotting opportunities to win over clients. He's also brilliant at retaining them through customer services, and understands its inseparable link with brand building, better than most. In fact, customer services has been something of an obsession throughout his career. There is, of course, the famous story about him disguising his own voice and calling one of his companies as a disgruntled customer, and demanding to be put in touch with Richard Branson. No one tells the story better than the man himself: "I am so pathetically bad at imitating someone else's voice that Penni, my trusted assistant for many years, sat there and let me make a complete fool of myself with some trumped-up complaint before saying, 'Well, thank you so much for sharing all that with me, sir. Let me see if Mr. Branson is available to take your call.' She then kept me hanging on for what seemed like an eternity - it was probably a couple of minutes - before coming back on the line to say, 'Sorry, Richard, but you appear to be out of the office at the moment, can someone else help you?' before dissolving into howls of laughter."

It's a funny story, but it makes an important point that most entrepreneurs fail to grasp. Namely that you should never get so caught up in management and strategy that you forget that you're providing a product or service for the benefit of customers.

Virgin Money has from the outset tried harder than most of its competitors to score brownie points in this department, and has by and large succeeded pretty well. In 2011, it took the decision once again to do something no other financial services provider had so much as contemplated. It launched its Virgin Money Lounges - essentially VIP lounges on the high street for its customers. Besides free refreshments and newspapers, Virgin Money lounges also provide iPads and in some cases, a bookable room for meetings. According to the young lad who greeted us at the Haymarket lounge, they get around 200 customers using it every day. The one in Glasgow gets as many as 1,000 through its doors on some days. That's an awful lot of customers in a year. Yes, they may be paying too high a price for their tracker funds. But they are happy customers, and they wouldn't dream of going anywhere else. That's the genius and staying power of the Branson brand.

Alex Pearl is the owner of Alex Pearl Ltd and author of Sleeping with the Blackbirds

Laughter - it's a serious business

I have long held the view that clients who possess a sense of humour and are keen to run amusing advertising campaigns are those most likely to succeed in this world. It' a simple philosophy, but as a general rule, I think the principle stands up fairly well. You only have to look at some of the best loved and effective advertising campaigns to acknowledge this.

Iconic poster for the beer that refreshes those other parts.

Volkswagen and Heineken are two particularly good examples. Back in 1978, the copywriter Terry Lovelock was tasked by his agency, Collett Dickenson Pearce to create a campaign for the Dutch brewer, Heineken. His brief revolved around one word: refreshment. For weeks Lovelock and his Art Director tried to come up with something they liked, but weren't getting very far. Eventually, at the eleventh hour and as an act of sheer desperation, Lovelock decided to seek inspiration in Marrakesh. Luckily for him, the change of scene; the sunshine; the spicy cuisine (or possibly a few hallucinatory substances) did the trick, and on waking up in his hotel room at 3am, he wrote those immortal words: 'Heineken refreshes the parts other beers cannot reach.'  Frank Lowe the agency's chairman liked it and presented the idea in the form of two TV scripts to Anthony Simmonds-Gooding, the most senior client at Whitbread, while the pair flew to Leningrad (now St Petersberg) to view an exhibition at the Hermitage.  Simmonds-Gooding bought the concept at 20,000 feet and the campaign ran for 22 years, cementing Heineken's position in the market and creating one of advertising history's best loved campaigns.

Twenty years before Terry Lovelock wracked his brains in Marrakesh, Bill Bernbach's New York agency Doyle Dane Bernbach found itself with a tricky brief to sell a strange looking car that had been designed by the Nazis in Germany. Bernbach defied all advertising conventions at that time by deciding to adopt self-deprecating humour to convey the car's chief characteristics: its size and less than perfect looks, while extolling its winning virtues: reliability and thrift. With consummate wit, one of its early commercials featured a funeral cortege and the the voice of the deceased reading his last will and testament. 90% of the script is devoted to the old man berating in the most amusing terms his nearest and dearest for their extravagant lifestyles, while we see them coast past in a long cortege of large saloons. Finally, we get to see the old man's nephew driving a VW Beetle, and the old man wearily signs off: "And to my nephew Harold who oft-times said, "a penny saved is a penny earned," and who also oft-times said, "Gee, Uncle Max, it sure pays to own a Volkswagen", I leave my entire fortune of one hundred million dollars." The commercial makes you chuckle and is absolutely timeless.

Press ad for the VW Beetle.

Of course, it's no coincidence that these two hugely successful brands have relied on wit to sell. It is without any doubt one of the most potent tools that the marketing industry has at its disposal. Yet, it never ceases to amaze me that so many clients shun anything remotely amusing, firmly believing that humour denigrates a brand; and somehow makes it frivolous. The consensus seems to be that if you want to be taken seriously, you have to be seen to behave seriously. And the result is that most advertising is simply dull and instantly forgettable.

In a rather round-about kind of way, this brings me to the subject I wanted to talk about in the first place: a project of one of my own clients. Sofia Fenichell is an impressive businesswoman. She started out, funnily enough, as an executive at Doyle Dayne Bernbach, and then moved into the higher echelons of investment banking and hedge fund management, before starting her own businesses. Her latest venture, which I have had the pleasure of helping her with is a fascinating project that blends science with, you've guessed it, humour. In short, she and her business partners, have come up with Mrs Wordsmith - an ingenious way to improve the vocabulary of primary school children. Mrs Wordsmith comes in the form of a beautifully produced monthly package that is delivered directly to your door. Inside are a series of placemats that have been lovingly designed with amusing narratives and inventive word games. And all the words and stories have been illustrated by the brilliant team of artists behind the DreamWorks movies Madagascar and Hotel Transylvania. As one of the lead writers on the project, I've really enjoyed the collaborative process of working with the DreamWorks team. Sofia and her business partners, who include the neuroscientist Dr Lesley Sand, understand the importance of humour when communicating to young kids. And it's why they approached DreamWorks in the first place. Sofia was very clear about this. "If the illustrations weren't going to be funny, the whole thing wasn't going to work," she told me when I had my first meeting with her. But she needn't worry on this score, as the illustrations are, as you'd expect, wonderfully irreverent and humorous.

One of countless illustrations by DreamWorks for Mrs Wordsmith.

The entire concept has in fact been based on masses of research into how young children learn a wider and richer vocabulary. And how a wide vocabulary at a young age will help children to confidently master all subjects at school including maths. Research has also shown that certain rich words that aren't on the primary school curriculum are usually learnt at home; particularly if families sit around the dinner table and engage in conversation. So Mrs Wordsmith employs placemats to be used at mealtimes in ten minute bursts every day. Repeating words in different contexts through the use of amusing illustrations and stories is, according to Dr Sand, the key to success. Instilling a love and understanding of words early on also develops a love for reading.

Surprisingly, there is no other paper based programme quite like it on the market. Kumon is the only other system out there. It's been around for years, but is very dry, humourless, and is based solely on learning by rote.

To date, the educational establishment have been raving about Mrs Wordsmith. It does precisely what every school wants every parent to do at home with their kids - but with minimum effort.

By being irreverent, amusing and mischievous, Mrs Wordsmith is certainly going to appeal to kids. And it'll only be a matter of time before it makes its mark. Indeed, in ten years from now, I suspect it will become a household name. Embrace humour wisely, and sooner or later you'll be laughing all the way to the bank.

Alex Pearl is author of Sleeping with the Blackbirds