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Garland Pollard writes about media, branding and technology from Sarasota, Florida. His website BrandlandUSA.com is America’s authority on legacy brands. A native of Virginia and the former editor of Virginia Living magazine, he is, by day, Director of Communications for a Florida diocese of the... More
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  • Wells Fargo's Abbot Downing Takes On Old-Line Trusts

    Northern TrustLast week, I was in a Wells Fargo branch, looking at a beautifully produced booket/story of the company. It included an explanation of how it ran stagecoaches and ran money to the West, and detailed many of the innovations of the hundreds of banks that made up what is now Wells Fargo. Inside the leaf was a double spread of all of the banks that were merged to make Wells Fargo; it seemed to be a very complete list.

    The message? What a company with history, and a sense of itself, and its past. Wells Fargo is known for its archives, and they have put them to good use to help sell the longstanding trustworthiness of the company.

    But all the goodwill was undone today with the launch of Abbot Downing, a trust company for high net worth folks who bank with Wells Fargo. The Abbot Downing name apparently comes from the carriage makers that made Wells Fargo's carriages oh so long ago. The two names have nothing to do with banking, nothing more than a marketing ploy. Perhaps there are worse things (such as one of those contrived names), and this name has a good chance of succeeding because Wells Fargo has so many customers that it can market to.

    In a Marketwatch story, division president James Steiner said that Abbot Downing would do lots of things for its clients, not just investments. "The firm is trying to differentiate itself by offering broad services that cover both soft (doing family histories) and hard skills (creating very complex investment portfolios)."

    But it missed something. Authenticity. Banks are different from soft drink companies and fashion lines. They are companies that you trust with your most important possession, your money.

    The move is reminiscent of SunTrust, and its odd experiment with a brand called Alexander Key (See 2002 Inside Business story.) SunTrust in 2002 created the Alexander Key brand for its investment subsidiary. Like Abbot Downing, it was cooked up, apparently taken from an old president of the company, and in turn, the Alexander Key brand was cooked in a few years. Now SunTrust uses the Robertson Humphrey sub-brand for its investments, just as BB&T uses the Scott & Stringfellow brokerage name.

    It reminds me of department stores that come up with WASPy sounding names for their store brands, in the hope that people will think that the brand is something old.

    Abbot Downing will have to produce incredible results in its trust services department to compete with the other older, established banking brand names that have been trusted over generations.

    Some of the biggest names include (with their year of founding) :

    • 1853: U.S. Trust, the trust company founded in the 1850s that is now part of Bank of America.
    • 1907: Bessemer Trust is an invented name, a nod to Bessemer, the steel innovator, but that name had some integrity as Henry Phipps was working with Andrew Carnegie's money when he established the firm at the turn of the century.
    • 1899: Northern Trust founded in Chicago.
    • 1903: M&T now owns Wilmington Trust, with roots in Delaware and T. Coleman duPont.
    • 1931: Fiduciary Trust, now part of Franklin Templeton.
    • 1935: The Whittier family of California establishes Whittier Trust (oil $$).
    And across the U.S., there are dozens of small, family run trust companies that have devoted followings. For instance, Burke & Herbert (1852) of Alexandria has its own trust department. And there are hundreds of these across the nation.

    Surely the name tested well, though I am not sure how many ultra rich folks would switch to a bank name that was created to "sound" rich and "historic." Furthermore, you don't want the word "down" in any brand that has to do with investments. It has bad juju, kind of like when American Idol contestants sing songs about "going home."

    This is but another annoyance for those of us who hate the constant churning of our bank names. Can we have a bank that is not a manufactured "brand" but derived from the names of bankers or places? Places like Philadelphia and Boston and New York and Chicago and Detroit and other centers of commerce of the 20th century?

    Or maybe the company could go back into the old names that made up Wells Fargo, and dredge up something more interesting:

    • Perhaps Crocker Bank and Trust? Connotes old California, as well as that Patty Hearst bit of history. An old nightclub is apparently using the Crocker name for a nightspot in L.A.
    • Bank of North America, though probably difficult to use because it is so generic, was a predecessor company of Wells Fargo, and among the first federal banks in the U.S. The original location is still part of Wells Fargo's empire.
    • A.G. Edwards and Wheat, predecessor investment companies of Wells Fargo and Wachovia, might be better names. Wheat is still magic in the South and A.G. Edwards is well-known nationally.

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Tags: WFC, MTB, BEN, BAC, banking, branding
    Apr 02 11:28 PM | Link | Comment!
  • Companies and Businesses Truckin' in a Deadhead Economy

    No, I'm not talking about the late Jerry Garcia. I'm talking mums. Potted mums.

    I have been thinking about a pot of red mums that sit by the walkway into my house. Different things happen to mums in different economies. When things are booming and we all have cash, we tend to get some new ones if the old ones aren't blooming. But in a time like now, and for most of the 20th century, most folks would "deadhead" the flowers on the plants, so you can get a few new blooms out of them. In a deadhead economy, people reduce consumption and fall back on both quality and price. In my case, the mums have finally re-bloomed, though not to the extent I would have wished.

    It got me wondering; if many people like me are changing their buying patterns, how does this affect not only the immediate economy, but the next five to 10 years? And if and when the economy finally turns to prosperity, will sales recover, or are we creating another Depression-era generation that sees being a skinflint as the height of success and good citizenship? If that is so, success will come in different ways.

    A few weeks ago, Capitol One CEO Richard Fairbank was quoted in The Wall Street Journal saying his company was seeing a "striking" lack of demand for credit. That made sense, because the night before, I had seen Fox Business News' Dave Ramsey celebrating the umpteenth caller who had quit buying new things and sold all his "stuff" online to pay down his credit cards. These sales weren't coming back. After suffering 25 to 29 percent interest rates that would have run afoul of usury laws just a generation ago, this caller was not about to go and charge a bunch more, well, crap. The same week, I heard a sermon from a priest at The Falls Church tell parishioners that he had bought a used car from someone who saw in a Craigslist ad that Dave Ramsey had "told him" it had to go. Just this week, I heard former IMF economist Simon Johnson speaking to Congress on deficits. He saw a "substantial slowdown" in the second half of the year. Yikes.

    Technology magnifies this reduced consumption. My Apple iPod includes apps that were dozens of separate products only a few years ago. This one device has replaced a multiple products I have purchased before, including an Etch-a-Sketch, Boy Scout compass, Sony clock radio, Superscope AMFM Receiver, Garrard turntable, Sharp tape player, Panasonic Tape Recorder, Kodak Instamatic, Rolodex, Super 8 movie camera, TI calculator, Realistic Weatheradio, Rand McNally Maps, Sarasota Herald-Tribune, New York Times, AAA Triptik and Day Runner calendar. It has eliminated the jobs of travel agents, photo processors and dozens of different factory workers here and abroad. What happens when iPods will eliminate the need for fast food cashiers?

    I mentioned this idea a bit as it related to Sears Holdings (NASDAQ:SHLD). In August during the Sears Roebuck back to school season, vast amounts of square footage dwarfed the lean merchandise assortments. And last year during that scary fall retail season, I wrote about retailers who were surviving by doing repairs.

    The question for me is what retailers, products and brands can thrive in this "deadhead" market where millions of unemployed and underemployed have more less money, more time on hand, and less need for things.

    1. Creative genius: My daughter turns Starburst wrappers into purses and sells them on Etsy. She also gathers weekly at Sarasota's Darling Pottery Studio, where students of all ages each week fill their cabinet with gorgeous bowls and pots they pitched themselves. People have time; when you have time many knit, bake and make for amusement and little luxuries. Beneficiary? Craft stores like Michaels Stores and Jo-Ann Fabrics, local craft shows and little online retailers.
    2. Your brand is an app. So your product is not needed any more? Turn it into an app. A Radio Shack (NYSE:RSH) Realistic Weatheradio app? An AAA Triptik app?
    3. Cheap, really cheap. Stuff that's either really extreme value (Dollar Tree (NASDAQ:DLTR), Supervalu's Sav-a-lot (NYSE:SVU), or has real quality combined with remarkable price points, where Walmart (NYSE:WMT) is going.
    4. Extreme value, or perceived value. Two weeks ago, I went to our local VW dealer for a car show, and it was packed. Volkswagen is increasing its market share, opening a new Tennessee factory and hoping to double sales volume in the next year. Local, luxury chocolate shops in Sarasota seem to be doing well. That may be a function of the uptick in the Dow, though value priced luxury can do well no-growth economies.
    5. Hacking and remaking. Trendwatcher website Springwise last week featured Sugru, a silicon putty that you can use to "hack" and remake old items to suit, including changing the shape and making handles easier to use. You can even mould it into new things.
    6. Repair, not replace: I am not alone in talking about this issue; the New York new ideas consultancy PSFK has written about the idea, citing the Repair Manifesto of Platform 21. The repair manifesto's main idea is that fixing stuff can be made interesting if it is more creative, and fixing things is the most green friendly thing you can do. The hipster art group Fixer's Collective gathers in Brooklyn to repair stuff as an art form. As much as these all might seem like niche market ideas, these trends percolate down to the mass market. Our local Florida Tops sewing machine and vacuum chain is pushing deals on Dyson and Electrolux, as well as repairs.
    7. Shades of Havana, '59: My uncle, an ob-gyn and car enthusiast, bought a rebuilt Dodge Neon for his college-age daughter from a North Carolina fellow who rebuilds them, with interchangeable parts from other Neons. It is the perfect solution for a cheap, cheerful college runabout. The twentysomething guys on my street spend their entire free time rebuilding and fixing trucks. All of their extra time.
    8. Quality brands win: Tiffany & Co. (NYSE:TIF) has survived every downturn. They are luxury, but they know how to sell items with low price points to keep every income group in their stores.
    9. Small size, high markup: Sanrio's Hello Kitty has trained kids on the idea that small, well produced items can be sold for high markup. Consumers who have less will still want quality, even children. You can have high markup in a slow economy by making everyday items that have high perceived value. My daughter's SIGG water bottle that she takes to kindergarten is made in Switzerland (around $17!), and is of extreme high quality. It lasts. She won't need one for another few years.
    10. Local is good. Big article this month March's The Atlantic on how Walmart "The Great Grocery Smackdown" is now pushing local produce at its stores, and will be searching out nearby truck farms to supply its stores.



    Disclosure: NONE
    Tags: TIF, WMT, SVU, DLTR, COF, banking
    Feb 25 8:48 AM | Link | Comment!
  • Glad Texas Instruments Has Stuck with the Calculator
    TI calculatorThere are fewer and fewer legacy electronics companies; great names like Sperry, Burroughs, Hallicrafters and such have either been merged into other companies or disappeared. Motorola is still around, though the company appears to be drifting.

    One great name that has survived is Texas Instruments. TI has owned a good market in high-end calculators since the 1970s, and today still dominates secondary school math with its graphing machines. It still even sells low end models.

    TI's educational division is only a small percentage of its larger electronics business. Overall, it is a company with net margins were over 18 percent. I don't follow electronics stocks, but I do pay attention to how companies use brands, and TI has got it right in the consistent branding department.

    TI still has an American competitor, HP. Thankfully, Hewlett Packard is still in the education business, though its educational calculators seem far more popular with college and master's accounting and business students that TI's, which seem to have a following in secondary education.

    But secondary education is a great place to be; kids who take higher level math do important things when they grow up. Consumer goods companies pay dearly to reach high schoolers, and TI gets to do it and make money on it. The company cements its personal connection to education with an annual Teachers Teaching with Technology (T3) Conference, this year to be held March 5-7 in Atlanta.

    A few months ago, I found the above TI-1200 at a garage sale for a quarter, and sold it on eBay for around $20 bucks or so (the price originally was apparently $24.95) It dated from around 1975 (the calculator came in other versions including the Lady 1200 and the Spirit of 76). It was, and still is, a very satisfactory machine and I think I should have kept it. (They still sell a pink version of their graphic calculators for girls; it's just under $100. Now that's margins.)

    We need more TI's that stick with their business. Today's Wall Street Journal has a piece on TI and the company's legal battles with the users who have figured out the code inside the calculators in order to unlock the power of the microchip within, all for fun. Electronic Frontier Foundation has helped the cause, too, asserting that people who buy calculators should be able to take them apart, literally and figuratively, as long as they aren't selling patented information. We agree with EFF, though we are sympathetic to TI.

    We used to pull it apart, too. Underneath the TI-1200 faceplate there were extra buttons that were hidden, if I recall properly. In addition, we could turn the keyboard upside down and write SHELL OIL with the numbers, a trick that could only amuse an 11-year-old.

    The branding exposure of TI's Educational Technology section is priceless; such exposure and goodwill could not be purchased at any reasonable price. Most great electronics companies used to all have educational subsidiaries; SRA, the reading laboratory, was a part of IBM.

    It would be great to see more of that commitment at other companies. I am sure that at times, there have been some at TI who wanted to sell the education business, but I am glad they've stuck with it.

    Disclosure: No positions
    Tags: GOOG, HP, TXN
    Nov 16 9:17 PM | Link | Comment!
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