NationsBank Logo: A $50 Million Gambit

In one of the most costly name changes ever, NCNB Corp. and C&S/Sovran Corp. plan to spend some $50 million promoting themselves as NationsBank.

The goal is to make the new moniker a household word.

"Wherever our customers are, we want them to know NationsBank," said Joseph B. Martin, a corporate affairs executive at Charlotte, N.C.-based NCNB.

Defending the Franchise

A lot more is at stake than just a name. Together, the names NCNB, C&S, and Sovran enjoy vast recognition and goodwill. Failing to shift customers' affection to NationsBank would mean sacrificing one of the new company's most treasured assets.

"If the public gets confused, goodwill could be eroded," warned Edwin F. Lefkowith, a New York-based consultant.

No one knows better than C&S and Sovran the hazards involved with a name change. After the two companies agreed to merge in late 1989, they proposed the name Avantor for their merged entities.

But they eventually settled for the more prosaic C&S/Sovran after the name Avantor was derisively dismissed by the media and analysts.

The debacle shows there is a fine line between winners and losers: The creator of Avantor, Denver-based Glenn Monigle & Associates, was acclaimed when it came up with Sovran Financial Corp. as the name for the merged First and Merchants Bank and Virginia National Bank.

NCNB's high-wire marketing act will be closely watched by other regional banking companies whose names no longer convey their status as emerging superregional or national concerns.

Observers say the expansive PNC Financial Corp., parent of Pittsburgh National Bank, and NBD Bancorp Inc., parent of National Bank of Detroit, may eventually want to do away with the acronyms derived from their hometown banks.

Citing competitive restraints, NCNB's Mr. Martin declined to outline details of the $50 million budget for the NationsBank name transition.

But he said the company plans a gradual rollout of NationsBank as branch conversions and product introductions are completed, rather than launch an intense media blitz immediately after the merger of NCNB and C&S/Sovran is approved.

Publicity Before Birth

Although the name NationsBank cannot be formally introduced until NCNB completes its acquisition of C&S/Sovran early next year, the name already has garnered considerable publicity and frequently is used in headlines.

Emblazoned in huge red and blue letters on a shimmering silver backdrop eight feet high and 25 feet wide, the NationsBank logo formed a memorable backdrop for NCNB chairman Hugh McColl and C&S/Sovran chairman Bennett Brown when they first announced the merger of their companies in July.

What's inspiring NCNB to make the leap of faith to NationsBank is confidence in the name, a push to shed the last vestiges of being a regional company, and the promise of operating savings if the name transition goes well.

"A regional name no longer communicates what we are," Mr. Martin said.

The company shifted subsidiary bank names to NCNB from North Carolina National Bank in 1983. But media coverage accompanying the company's forays into new markets made clear the North Carolina genesis of the NCNB name.

That particularly alienated some Texans, for example, who resented that a North Carolina banking company had bought the largest institution in their state, the failed First Republic-Bank Corp.

Waited Too Long for Switch

Moreover, NCNB found that its initials were difficult to market, in that the acronym did not evoke much imagery and therefore required constant advertising reinforcement. NCNB now concedes it waited too long to make a name switch.

Making the transition to NationsBank will be tricky. Worried that competitors might make marketing headway, NCNB and C&S/Sovran will advertise their existing names through the fall.

At the same time, both companies to varying extents are expected to take portfolio-cleansing loan-loss provisions that may reflect poorly on the very names the banks are continuing to promote.

All the Names at Once

Adding a further element of complexity, the names of all three companies - C&S/Sovran, NationsBank and NCNB - will be combined in ads to be displayed late this fall.

By next summer, NCNB hopes the launch of "NationsBank" will be completed. In fact, the company believes that by then the new name will be a cost-cutting tool, permitting savings through the standardization of signs, forms, and other media.

In the interim, NCNB is positioning NationsBank as a rallying point for the 60,000 employees of the merging companies.

NCNB chairman Hugh McColl, for example, portrayed NationsBank as a train during a recent satellite broadcast to employees, saying anyone clinging to the vestiges of NCNB and C&S/Sovran "would be left behind at the station."

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