For a brand that has long been evocative of sleepy 50s Britain, the recent attempt by insurer Prudential to become a global financial powerhouse came rather out of the blue.
If the attempted $35.5bn (£24bn) acquisition of AIG-owned Asian life-insurance company American International Assurance lacked anything, it was a sense of prudence - not least because Prudential's total revenue in 2009 was only £20.3bn. The failure to gain shareholder approval left the Pru with a bill of £450m, not to mention plenty of egg on its face.
Yet, it would seem that French-Ivorian chief executive Tidjane Thiam, who joined Prudential in 2009, remains intent on escalating the growth of the company in overseas markets and transforming it into an international player.
The problem facing Thiam is that Prudential's carefully cultivated image in its home market is as a down-to-earth, approachable brand. It was a marketing pioneer, creating its first 'publicity department' in 1926 and launching its enduring 'Ask the man from the Pru' campaign in 1949. The Prudence brand character, launched in 1986 and reintroduced in 2008, also portrayed Prudential as a company that was careful with customers' money.
Should Thiam press on or return to the Pru's more cautious roots? We asked Alan Gilmour, interim director of insight and marketing, at the Identity and Passport Service and a former head of marketing at Lloyds TSB, and Tom Huxtable, managing director at 23red, and former RBS account director at CHI & Partners.
- Alan Gilmour interim director, insight and marketing, IPS
I am a Prudential customer. Indeed, it is quite possible that I got my policy from the man from the Pru - yes, it is that old.
It must have been quite a shock for other Prudential customers, reared on this cosy image of the company, to realise that they were dealing with a global financial behemoth.
They were also no doubt alarmed to read that it had got itself into some sort of pickle trying to expand into Asia.
At the end of the day, this is a City story, not a consumer one. While the Pru's brand has clearly been damaged there, the backwash to the retail market can be minimised.
However, the Prudential does need to be clear about what it is and what it wants to become. The UK market for life insurance and pensions is undoubtedly a mature one, and therefore expansion overseas is the only way forward for this touchstone British company.
However, it must not neglect its core UK market. Like any great general, the man from the Pru must always keep his rear covered while he goes on the offensive. He needs to think global and act local to succeed in the future.
REMEDY
- Reassure the customer base that the company has been playing with shareholder money in Asia, not their pension money.
- Convince UK customers that it is not abandoning this market. Invest in products and distribution.
- It has been a while since we have seen any Prudential marketing here. A substantive campaign would remind consumers it has not abandoned these shores in search of greener grass.
- Ensure that UK customers do not feel they are paying for the AIA bid via higher charges or lower returns.
- Tom Huxtable managing director, 23red
Ambitious David and Goliath struggles can be hugely energising for a brand - if it can pull off the victory.
It's been a long time since 'the man from the Pru' graced our screens or newspaper pages.
He was ditched at a time when boring was, well, boring, and it was all about being daring and exciting. The problem is that the world has moved on again and boring is now exciting.
Enter Tidjane Thiam, determined to join that ultra-elite club of truly transformational leaders. To do this he needed an ambitious, exciting challenge: a Goliath to his David.
Unfortunately, that's where it all went so wrong. He failed. Along the way, as I see it, he also ignored the very people whose support he now needs.
From the investors' point of view, now is not the time for heroics. With the entire financial-services industry in the dock for demonstrating a lack of prudence, in the dark days after Fred 'the Shred' Goodwin, there is very little good will to share around.
In the long run, leadership defines brands. Paying out £2.5m to get a wannabe hero seems poor value when what's needed is the return of the man from the Pru.
REMEDY
- Be clear that the strategic intention was right.
- Accept that mistakes were made. Humility goes a long way - see the recent Toyota debacle.
- Identify an alternative Asian growth strategy, quickly.
- Remain visible internally, driving the business forward.
- After a suitable pause, announce a safe acquisition in Asia and a heavyweight figure to drive its growth.