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Superbrands case studies: Egg

Originally published in 'Consumer Superbrands Volume VI', July 2004. The book reviews the UK's strongest consumer brands as judged by an independent judging panel.

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The high street banks have dominated the UK retail financial services market for many years and were very content to let this situation continue. Financial services held little interest for most consumers and their inertia has been a continuous feature of Britain's attitude to finance -- at least this was the situation until the creation of the online brand Egg.

On Sunday October 11 1998, Egg launched as the UK's first Internet bank. Today Egg is the largest pure online bank in the world, providing banking, insurance, investments and mortgages through its Internet site and other distribution channels.

As one of the few dot.com success stories, Egg's market share is growing robustly and now accounts for 10% of the increase in credit card balances in the UK and 12% of personal loans. Egg UK is a sustainably profitable business. Egg achieved lower operating and marketing costs as it successfully delivered economies of scale, gained more leverage from its excellent brand awareness figures and implemented process improvements and further automation. It has attained brand awareness of 90%, which is impressive for such a young company (in fact Egg's brand image is more trusted than all other pure online competitors -- including Smile, IF and Cahoot, according to HPI research in December 2003).

All this has been delivered in what has been an increasingly competitive marketplace. Five years after launch, the competitive environment is very different with many other online entrants as well as many established offline banks launching their own separate Internet brands, using equally unconventional-sounding names such as Cahoot and Mint. Egg has proved that its strategy is not based on price alone but on developing genuine, lasting relationships with its customers and exploiting the opportunities offered by technology. Egg now leads the digital marketplace and has risen to the challenge of attracting market share from traditional banking and financial services providers.

Egg continues to leverage the opportunities presented by the digital financial services marketplace to radically transform the financial services industry in the UK by passing on the cost savings and convenience of the online model. It also provides an alternative to the traditional high street banks through its distinctive image and desire to demystify financial services with simple and straightforward language. Through its quirky advertising and modern tone of voice, Egg has proved that a bank can be both successful and have a youthful, appealing personality.

Launched by Prudential in 1998, Egg took the marketplace by storm with a savings account paying an interest rate of 8%. In just six months, Egg had reached its five year targets of 500,000 customers and £5bn funds under management. It was the UK's first ever internet bank and has always been at the forefront of the digital revolution. Building a strong consumer brand in a highly commoditised product-led market, generating continuous awareness without a high-street presence and creating a credible brand image amongst a highly cynical audience was no mean feat.

In 1999, Egg launched the Egg Card, it was the first online credit card and also the first credit card to provide an online guarantee to make online shopping easier, as well as being the first provider to present a 0% interest on new purchases and balance transfers introductory offer to help people manage their money more effectively. Egg plc floated on June 12th 2000, raising proceeds of approximately £150m and is listed on the London Stock Exchange. It broke into profitability during the fourth quarter of 2001.

Egg purchased French online bank Zebank in January 2002 and launched into France with its first product La Carte Egg in November 2002.

Recent Developments

On April 1st 2004 Egg broke the mould in the UK credit card market by introducing a radical new proposition for both new and existing Egg Card customers, with the key emphasis being on loyalty and long term value.

Egg became the first UK card company to offer an additional 0% 'anniversary' balance transfer to both new and existing customers once a year, every year.

This move followed the introduction in 2003 of balance transfers from personal loans and overdrafts and represents further innovation by Egg, putting the UK consumer firmly in control of their borrowings and giving them unprecedented flexibility with their money.

Both new and existing Egg Card customers will now be offered the opportunity to save money on an annual basis by consolidating debt from more expensive providers, reinforcing Egg's commitment to providing long term value for its customers.

Other recent developments include digital tools designed to take control of their finances: Egg Money Manager (online aggregation), Egg Pay (money payment to any e-mail address) and moving money between external financial accounts.

Through extensive customer insight research, Egg's New Product Development programme is constantly scouring the market for areas where customers could be served better -- more simply, more competitively and more innovatively -- and then develops new propositions according to those needs.

Promotion

TV advertising for Egg has proved essential in building a strong customer base. Zoe Ball and Linford Christie featured in its launch, promoting its first product, the Egg Savings Account. They also reflected Egg's brand attitude. The advertising aimed to challenge the conventions of financial services advertising by subverting its traditional use of celebrity endorsement and rigging the celebrities to a lie detector. Egg wanted commercials to clearly establish its tone of voice while familiarising Egg as a brand name, backed up with a strong and motivating offer.

Since launch in 1998, the market has become fiercely competitive and Egg has had to reinforce its differentiation in the face of this. In 2002 Egg's advertising featured a fictitious company called 'Brilliant Industries', which conjured up ludicrous inventions for dealing with money. In contrast, Egg was shown offering realistic and simple alternatives.

The TV commercials famously included 'La La La I'm Not Listening Musical Fingers'. This campaign featured the strapline "what's in it for me?" reflecting Egg's consumer focus at the heart of all its product and service offerings. Awareness reached an all-time high of 90% and Egg's personality traits in its communications -- quirky, optimistic and on the consumer's side -- were a firm hit. Egg's next campaign, which broke in April 2003 featured a talking 'sock', which reflected the inner voice of the consumer. The sock appeared on the hand of the consumer, shouting at its owner to stop being ripped off and to always ask for a better deal. Egg wants consumers to demand a better deal whenever they make a financial decision, not to accept the first choice, but the best choice and ask themselves "what's in it for me?" before they buy.

The results of the campaign meant that consideration of Egg reached an all time high. 'Sock' also delivered positive shifts across the board on core brand values with a 13% increase in trust and confidence in Egg. Unprompted recognition of ads was at its highest level since launch and take out of the key "good rates" and "don't get ripped off" messages was strong. In addition, Egg Card, loans and card management delivered over 100% of target and broke records for daily and monthly sales since launch and balance transfers to Egg.

Combined national press, mailings and online activity ensure Egg continues to acquire and cross sell to its customer base with innovative and motivating offers.

Brand values

Egg's long-term game is to revolutionise customers' experience of financial services and, in service of that, the brand aims to save customers money, simplify their finances, and put them in control of their money.

Egg's brand values are: irreverent, modern, honest and transparent, confident, forward-thinking, good value, inclusive, innovative, simple, straightforward and convenient.

Things you didn't know

  • At launch, demand at the customer contact centre was so high that it was all hands to deck and everyone was put on telephone duty -- including the CEO.

  • Egg interviews over 10,000 customers every month to gauge satisfaction among its customer base.

  • Egg was the first credit card to offer 0% on balances and 0% on balance transfers for an introductory period.

  • Egg was nearly called Oxygen.

    © 2004 Superbrands Ltd

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