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Branson tilting at windmills?

Posted in General, Marketing, Branwell Johnson, Latest reporters' blogs November 26th, 2007 by Branwell Johnson

Here he comes astride his charger, thundering down the hill to rescue Northern Rock. But can Sir Richard Branson stretch the Virgin magic to embrace the ailing lender?

Branson and his Virgin Group is leading a consortium and the plan is to subsume Virgin Money into Northern Rock, although given the blackened name of the Newcastle-based lender, some eventual form of overall Virgin branding could provide a much-needed halo effect. That was the strategy behind NTL buying Virgin Mobile and then rebranding as Virgin Media.

Why is the Virgin name so potent? Because Virgin still seems a Teflon brand, able to ride out any upsets or catastrophe. It’s a brand marketers would love to work for and the public seems able to forgive for any misdemeanour. Frequent travellers on Virgin Trains, like myself, will know some of the miseries of that brand touchpoint – but we still trust the over-arching Virgin name.

But despite the muscle of the brand, there’s also the question of whether Branson can run Northern Rock – which he wants to position as a rival to the big high street banks. It seems the great entrepreneur believes he can turn his hand to any venture – last year it was the prospect of running ITV. And he has made repeated noises about running the National Lottery. Yet the jury is still out on Virgin Media and Virgin TV surviving and other ventures, such as the nearly invisible Virgin Cola, have been ill-starred.

Of course, rescuing Northern Rock will certainly win Branson friends in the Government and make great PR, if his initiative secures jobs and the sponsorship for Newcastle United. It’s not yet cut and dry and subject to shareholder approval, but Alistair Darling is probably signing up for a lifetime Virgin gym membership right now.

However, best remember that the Virgin consortium isn’t a charity and Northern Rock is not a Co-Op bank - so altruism will not be the ruling principle once the dust has settled.

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