Vozrozhdenie Bank Uses Quadric to Drive Nationwide Re-launch

The unique, comprehensive approach sets a new standard for corporate positioning.

In May 2005, Vozrozhdenie Bank was performing better than ever. Growth was as planned; the loan portfolio had diversified, retail deposits had accelerated and fee income was at record levels. Clients were satisfied, as were shareholders, with return on equity at 19% in 2004.

With the bank’s 15-year anniversary approaching in 2006, management launched a unique strategy process to ensure the future would be even stronger.

The strategy process used extensive scenario testing, with equal priority given to internal and external involvement, to ensure the target position was both genuine and relevant. Then, implementation went far beyond the usual focus on visual identity and advertising. Management attention given to developing the corporate culture and re-focusing operational priorities ensured that the target position was not an empty promise.

Increasing focus on intangible assets

The Russian financial services market was developing quickly. Domestic competition was intensifying and international banks were investing aggressively. Vozrozhdenie Bank’s nationwide branch and ATM network gave it an advantage over competitors emerging from Moscow. But, the advantage would be lost if the bank didn’t move to extend its lead.

For the past 15 years, management had taken a rational approach focused on increasing the value of tangible assets: extending distribution, upgrading technology and building equity. Competing in the future would require that they manage intangible assets, like the brand and corporate culture, equally well.

Bank management made a decision to strengthen the corporate positioning. Stronger positioning would have wide-ranging benefits; from easier recruitment and retention of talented employees to increased marketing effectiveness.

Nikolai D. Orlov, Deputy Chairman of the Management Board, described the decision: ‘In the past, our differentiation was based on reliability. We were the survivors of multiple banking crises, the leaders in corporate governance and the most established bank in our communities. However, our brand was managed inconsistently and rapid employee growth risked diluting our corporate culture’.

A unique strategy process involving the entire value chain

The first step was to define the future positioning that would link the bank’s business strategy to all forms of implementation. Then, activities like training programmes and advertising campaigns could be developed.

The bank surveyed the market for positioning consultants and selected Quadric. Mr. Orlov describes Quadric as a natural fit: 'Quadric’s process involved testing positioning scenarios across our entire value chain. By including both rational and emotional variables in the scenarios, the process ensured a link between our business strategy and future implementation. Quadric’s integrated strategy process was preferred over more fragmented alternatives’.

Quadric developed six positioning scenarios based on initial interviews. Then, Quadric tested the scenarios with a “positioning panel” of 125 people. The panel included carefully selected suppliers, managers, employees, business clients and retail clients representing the scope of the bank’s current business and growth focus.

Participants appreciated their involvement, as described by Alexandra Vasukova, manager of the Volokolamsk branch: “By involving such a wide spectrum of people, the bank has proven that it is willing to listen instead of just taking a top-down approach to decision making.”

Through a series of management workshops, Quadric distilled input from the panel into a description of the desired reputation of the bank. The key word behind the positioning is “relationships.” It turned out that of all the strengths the bank could emphasize, the ability to build close relationships with clients differentiated Vozrozhdenie Bank most from its competitors.

Michael Sherain, Partner in Quadric, was impressed by the findings: ‘We have managed similar processes in many industries and countries. Rarely are views of a company’s future so well aligned internally and externally. The bank has a unique approach to building client relationships, a strength that can be both developed further and communicated actively to increase competitiveness’.

Managing the transition

The relationship-focused positioning was not a far stretch, but ambition to make a significant impact was high. The bank established a project team to manage the transition. The team included representatives from each business line, branch management and corporate functions including human resource management and communications.

The positioning panel had identified a number of recommended actions to strengthen the bank’s positioning. These became the focus of the project team:

• Modernizing and standardizing the Vozrozhdenie Bank visual identity
• Focusing the corporate culture on being responsive, human (real) and dependable (these became the new corporate values)
• Prioritizing relationship-oriented performance metrics (i.e. speed of response to inquiries, clients’ tendency to recommend the bank to others)
• Improving the effectiveness of market communications

Quadric then worked with the team to re-allocate budgets while evaluating media and advertising agencies; marketing would command the largest share of the budget. In February, Starcom was selected for media and Seine Com for advertising development and production. Christophe Marchal, Managing Director of Seine Com, appreciated the confidence Quadric’s process gave the bank: ‘Effective development of campaigns requires both confidence and speed of decisions. Quadric’s process provided a common view of the future that made decisions much easier’. Jeff Chalmers, Co-managing Director of Starcom, appreciated the combination of confidence and openness: ‘The bank was extremely clear about its positioning, value proposition and target market, but still very open to our media insight. That was an ideal combination.’

A nationwide re-launch based on personal relationships

In planning the re-launch, the team placed importance on delivering the positioning through both actions and communications. Internal and external activities were given equal priority. And, a number of the programmes established at the launch will continue for years into the future.

The internal transition began with an extensive branch tour by Mr. Orlov. Vozrozhdenie Bank’s branch network includes 140 sales locations managed by 58 main branch offices. The tour included all 58, enabling over 1,000 of the 6,000 employees to interact with senior management, hear about the positioning panel findings and ask questions about the transition plan.

The public launch date, 12 April, is marked by celebrations for employees and clients at each branch. The new visual identity will be implemented everywhere, while internal posters and booklets describe the positioning from an employee’s perspective. A “Cultural Uniqueness Programme” was also established. The programme is based on a training module with an integrated feedback survey. The survey asks for specific ideas about how employees, and the bank as a whole, can live up to the new corporate values. The new module is added-on to existing training programmes reaching over 2,000 employees in the next two years.

The external transition will be driven by nationwide TV supported by billboards and print advertising. The 12 April anniversary coincides with the celebration of Cosmonaut Day. The main 30-second TV spot starts in space, flies across Russia and ends in a Vozrozhdenie Bank office where a bank employee is staying late on the phone with a client. The spot communicates the focus on close client relationships while emphasizing nationwide coverage and a wide range of services. Billboards bring the core messages into each community and print ads provide additional depth.

The synchronized internal and external activities will ensure that Vozrozhdenie Bank is recognized for its focus on relationships, and that employees continue to fulfil clients’ expectations.

Vozrozhdenie Bank was founded 15 years ago with a commitment to the revival of Russia, a commitment fulfilled through close relationships with people in communities across Russia. This strength of the past is now the basis for the future differentiation and increased competitiveness of the bank.

About Quadric®

Quadric specializes in helping companies achieve strategic differentiation, accelerating integration and growth. Quadric’s unique approach to corporate positioning, The Quadric® Framework, enables companies to develop market-focused strategies and manage implementation more effectively than ever before. The approach has been proven effective in a wide range of industries, from base materials and manufacturing to financial services. For more information about The Quadric® Framework and Quadric’s international consulting network please visit: www.quadric.net

About Vozrozhdenie Bank

Vozrozhdenie Bank provides personal banking and business services to clients throughout the Russian Federation. Our nationwide network includes 140 locations and over 400 ATMs.

We provide 900,000 clients with a range of services, from savings accounts and payment handling, to mortgages, car loans and bank cards. We are successful for one reason, complete focus on the needs of our clients. For more information please visit: www.vbank.ru