Street Smarts

t’s hard to see Citigroup and its powerful CEO Sanford Weill, Wall Street’s darling, as beginners at anything. Despite its clout and sophistication—the company is a neophyte at promoting its brand. Weill has stacked his executive committee with loyalists, who like himself, don’t include marketing savvy among their core competencies. Ask them about the company’s brand identity, and you get a blank stare. Weill craves the influence of big brands like Coke, but hasn’t a clue how to create one.

Welcome to the front lines of Citigroup’s marketing war.

Weill yearns to turn the Citi name into a cultural icon. He has a long way to go. For instance, when it came to setting the media plan for an inspirational corporate-image campaign by Merkley Newman Harty, Weill allotted only five days for an effort designed to turn Citigroup into the world’s most-recognized financial brand. Plus, marketing tactics have tended to be retail—aggressive promotions, ubiquitous locations, onetime discounts—short-term ploys created to keep sales flowing. Image and identity have taken a back seat. Insiders say when Weill previews marketing campaigns—something sources say he once shied from—he cares less about building consumer trust and more about offering a good deal.

It is finally dawning on Citigroup that it won’t convince people to believe in it simply by offering the right price. And, it’s starting to learn that the brand doesn’t exist to support its services; its services support its brand.

One way to achieve this end is to portray a united front. Thus, the blue wave draping Citibank branches and ATMs are disappearing. In its place will be the red arc from the umbrella logo of Travelers, the huge insurance firm run by Weill that bought Citibank’s parent, Citicorp, in 1998. Weill, a vibrant 68, is best known as an empire builder, legendary for his Wall Street prowess. Citigroup is the umbrella for all of Weill’s companies, which includes the Citibank, Travelers and Salomon Smith Barney brands, among others.

To encourage one-stop shopping, Citigroup is slapping the “Citi” moniker on a range of services, courtesy of its five main subsidiaries. Traveler’s supplies Citipro financial planning and CitiTerm insurance, while Salomon Smith Barney provides securities research for Cititrade online investing. A new online service,, keeps track of a user’s Citi and non-Citi accounts: credit card, banking, investing, even frequent-flyer programs. “We are offering these [Citi] products in a positive, hands-on manner,” says Marge Magner, consumer banking chief. “Rather than being so institutional, we are seeking to be more personal.” And far-reaching. To help introduce Citibank to suburban and Middle America, where it is conspicuously absent, the company hopes to install full-service ATMs in regional shopping malls.

Billed as the first global financial firm of the 21st century, Citigroup is the largest financial-services institution in the U.S., boasting $77.7 billion in global sales.

For Weill, Citi’s corporate visionary, the CEO who retires with the most companies under his belt wins. As a result, Citigroup’s girth and its appetite for acquisitions is its strongest identity to date.

“Citigroup is seen in the outside world as just an amalgamation of companies. A Citigroup brand does not exist yet,” says Raymond Perrier, global director of brand valuation for Interbrand. The old Citibank brand, which sported the “The Citi never sleeps” slogan, “built a solid brand, [but it was] based on passive loyalty. Since it was the only institution with such wide global reach, it got business by default,” he says.

At the same time, suburban and rural America hardly knew the bank existed, save for its credit card business. In Interbrand’s “The World’s Most Valuable Brands” 2000 survey, Citibank’s brand value represented 9 percent of its market capitalization, compared to 23 percent for American Express, which—at one-third Citigroup’s size—is the undisputed leader in financial branding.

“Citibank is five years ahead of banks in general, but it is five years behind American Express,” says Perrier. That comparison is not lost on Weill, who worked for American Express in the 1980s but had trouble fitting into the image-driven, country-club culture and quit to start his own company. Still, he likes his corporate stable to include executives and consultants with American Express experience.

In fact, Weill would love to be like American Express, enjoying the status, prestige and identity that accompanies the brand, even though it’s not in his scrappy, blue-collar nature.

Nearly everyone who has dealt with Weill calls him an “intuitive genius.” His Brooklyn street smarts and raw determination have served him well in a world populated by bankers and professional managers. Weill, who quit Cornell University just before graduation, started out as a stock broker and worked his way up in fits and starts, founding Shearson, then selling it to American Express, where he took an executive position. Four years later, he started buying unknown loan, insurance and investment companies. Energetic, volatile and controlling, Weill likes to slash costs and is impatient with abstract analysis. He demands devotion from his lieutenants and aggressive quarterly growth from his divisions.

“Sandy is a wealthy blue-collar guy,” says Mitch Kurz, who presided over Citibank advertising at Young & Rubicam. “Part of his genius is that he never relies on secondary sources. Sandy would take a call from a Citi insurance broker or stockbroker before the president of the United States,” Kurz adds. (Not that he minds calling upon political powerbrokers and their well-placed contacts. Citigroup boasts former president Gerald Ford as a board member.) Weill runs his gigantic company—Citigroup has 100 million clients in 100 countries—almost like a family business. Weill’s Polish-born father was a clothing manufacturer who married three times. In contrast, Weill obsesses about loyalty. He has given his children high-level positions over the years and is known to include his wife, Joan, in business decisions.

Weill’s “nature” seems to be to satisfy shareholders first—and deliver on customer promises second.

For instance, while ad agency Fallon, Minneapolis, has been running its “Live richly” Citi campaign that tells people the bank wants to improve the quality of their lives, Citigroup is being sued by the Federal Trade Commission, accused of predatory lending practices by Associates First Capital, its new acquisition. It is charged with misleading and pressuring poor and inexperienced borrowers. Citigroup maintains it changed loan procedures and stopped working with about 1,000 Associates brokers.

Weill and other company execs like to brag about the $31 billion Associates deal cinching last year’s 25 percent profit increase. That the charges of lying and tricking customers are the antithesis of Citi’s ad message is dismissed. The company claims it has a record of social responsibility and doesn’t anticipate consumer backlash.

Given his frankness and penchant for the hard sell, the art of creating an emotional brand is a mystery to Weill. For help in that treacherous arena, he turns to consultant Mayling McCormick, who some dub his secret weapon. A trusted marketing advisor largely invisible to outsiders, McCormick is considered the brand guardian for Citigroup and its subsidiaries.

Eight years ago, she connected with Weill at Travelers; she says her current focus is Citigroup’s corporate-branding strategy. The campaign that ran during last month’s Masters golf tournament, courtesy of Merkley, uses historic figures such as Jesse Owens and Albert Einstein and continues the theme, “Lead. By example.” The message? Citigroup “is extending its leadership role by enabling and empowering its customers through a growing array of corporate and consumer services,” says one campaign architect.

While McCormick’s role has been fairly stable, Citigroup’s executive suite has been a revolving door since the merger. Initially, Weill shared the CEO post with John Reed, the CEO of Citicorp. But when the board of directors mandated Reed’s resignation, Weill wrestled the top post for himself. Other key departures since 1998 include Weill’s heir apparent, Jamie Dimon, Citigroup president; Heidi Miller, Citigroup CFO; and Bill Campbell, co-CEO of the consumer group. Top brass, such as Robert Lipp and Deryck Maughan, have been shuffled from one post to the next.

Critics contend that Weill gets nervous if an executive looks too smart or accumulates too much power or attention. Weill’s fans point to earnings growth, despite merging two disparate cultures, as a vindication of Weill’s management style. Citigroup’s executive cabinet is now weighted with longtime Weill loyalists and Travelers’ players, including Jay Fishman and Chuck Prince, who were knighted co-chief operations officers in February.

Unlike Reed’s layered bureaucracy, Weill’s organizational structure is relatively flat. The executive committee makes a wide range of important decisions, including those concerning consumer branding.

In today’s cooler business climate, the consumer side of Citigroup offers the greatest opportunities for cross-selling growth. Net income from the global consumer division accounts for half of Citigroup’s total profit. The company’s global consumer businesses increased core income by 18 percent to $1.78 billion in the first quarter, led by continued strength in U.S. banking and lending practices—particularly in credit cards—as well as growth in the company’s businesses in Japan. Indeed, growth in Citigroup’s consumer business is making up for declines in the company’s global corporate and investment banking, which previously had matched growth rates in consumer operations.

Representing the consumer division on the executive panel is the team of Bob Willumstad, CEO of the global consumer group, and Marge Magner, chief administrative officer of consumer banking. Magner oversees all the image and product marketing for the Citi retail brand, though her experience with mass-market branding and advertising is limited. An agency executive remembers the conservatively dressed pair reeling during a MTV-style creative presentation. Eventually, Magner “got into the groove” and started to enjoy it, said the executive, but Willumstad “was lost.”

Magner’s forte is cross-marketing, a skill she mastered under Weill’s guardianship. After years of running Weill’s consumer-finance subsidiary, now CitiFinancial, Magner took over Citibank North America in January 2000. While the old Citibank brand tended to be monolithic and technology driven, she wants to create a new consumer-oriented brand that exists beneath the overarching Citigroup identity. A brand, she says, with an understanding human face.

To help lead that effort, a new marketing player has been moving into the foreground. Anne MacDonald, head of Citibank global marketing, was hired in 1997 shortly after Reed’s Citibank consolidated its marketing with Young & Rubicam and direct marketing sibling Wunderman Cato Johnson (now Impiric). Previously, MacDonald spent 10 years on the account side at N.W. Ayer working on Citibank, AT&T and American Express. She subsequently spent five years at Pizza Hut as a brand manager.

Sources say MacDonald was never a Y&R fan, preferring hipper, more creative agencies that reflected her own personality. She seized the chance for a change under the Weill regime and put the U.S. ad account into review last year when Reed resigned. Given Weill’s obsession with cross-selling, both MacDonald and the agencies realized the $100-150 million ad account had the potential to go beyond conventional bank advertising and promote an array of consumer financial services.

Fallon edged out TBWA\Chiat\Day and joined a roster of agencies operating in Citigroup’s consumer universe. Merkley has the Travelers insurance and Citigroup corporate business, Y&R retained non-U.S. consumer advertising, Kirshenbaum Bond & Partners handles the American Airlines and Citibank AAdvantage credit card, and Impiric still owns the biggest chunk of the marketing pie: $450 million in global direct marketing billings. The company’s corporate and investment management divisions have their own agencies.

It’s Fallon’s 3-month-old “Live richly” campaign that is blanketing the country. “There’s more to life than money,” argue the ads, which slyly combine a hip, irreverent tone with old-fashioned values. “Be your own status symbol,” advises one. “Sometimes wealth is buying the $6 popcorn and not obsessing over the fact you just paid $6 for popcorn,” suggests another. The cocky attitude is not being used because it reflects the true nature of the company or the brand, but, as Magner explains, so the work can compete with other entertaining ads.

A key purpose of the campaign is to stretch the brand name beyond banking and credit cards. “We are expanding the term Citi into a core identifier, so it means more than just Citibank and its banking products,” says MacDonald. “It will come to represent a variety of Citigroup consumer services.” The ads present Citi as “a brand that is a smart, steady, helpful partner,” she adds.

Weill declined to comment on the company’s marketing and branding efforts; senior Citigroup executives say they are pleased with the friendly approach of Fallon’s ads.

Critics grumble that the campaign fails to show clear consumer benefits or brand distinctions and that the message is out of sync in tight economic times. Layoffs are rampant and people are worried about their income. Others consider it too vague.

“What exactly does Live richly mean?” asks brand strategist Lynn Upshaw, a principal at Upshaw and Associates, San Rafael, Calif., whose firm works for Visa and other financial-service clients. Company executives counter that the tagline means the bank can take care of finances while customers enjoy their lives—in good times as well as bad.

Although the business press speculated that Citibank’s shift to lifestyle values was a nimble response to a souring economy, MacDonald insists she and Magner didn’t foresee the current decline. “We didn’t anticipate [the economic downturn] or plan for it as we prepared the ads last fall,” she says. Ironic when you consider the two work for a financial company so influential it has the ear of Federal Reserve Chairman Alan Greenspan and counts former Treasury Secretary Robert Rubin as a board member. Proof positive that different parts of the conglomerate don’t talk to each other and marketing efforts are not plugged into the company’s core business.

The bigger problem by far, say Citi insiders, is not the campaign’s content but fear Weill may slash the $100-150 million ad budget. Weill likes to brag about his cost-conscious company, in which all are expected to meet tough quarterly sales quotas. “We tightly manage our business to deliver on near-term growth expectations, [and] we keep a close watch on overhead costs,” he states in a letter to shareholders. Sources say Citigroup is considering cutbacks in advertising and other areas this year to offset slower revenue growth and impress investors. On the corporate side, the company held its first round of layoffs at Salomon Smith Barney last month. On the consumer side, Citi executives acknowledge they are tracking immediate sales results from all the marketing and ad expenditures and are poised to trim the budgets. Industry experts, however, wince at the prospect, worrying that marketing cuts could impair brand building at a crucial time, making the company more dependent on acquisitions and allow competitors room to make inroads.

While parent company Citigroup is so large and diversified that it has no direct rivals, its divisions face stiff competition. Citibank is the U.S.’s largest credit card company, with MBNA and First USA close behind. Both are looking for acquisitions to challenge Citi. On the banking front, its main peer is Bank of America, which managed to keep up with Citibank until late last year. One area where rivals outflank Citi is per-share valuation. American Express, Charles Schwab, Bank of New York and American International Group, an insurance conglomerate, all trade at higher multiples of their trailing earnings, and Weill frequently complains that Citigroup’s multiple is too low.

No matter, the CEO is cherished by his stockholders.

In April, waiting to begin this year’s shareholders meeting, the charismatic Weill posed for pictures and greeted fans. The cold, rainy morning did little to dissuade shareholders who packed Carnegie Hall, warmly applauding him. A legion of small-time investors devoted to Weill “hold him personally responsible for their financial success, their condo, their new boat,” says Anthony Brescia, who oversaw the Citigroup and Travelers accounts at Merkley Newman Harty.

At the meeting, standing center stage in a charcoal suit and rose-colored tie, Weill reminded shareholders of his progress. During the past 10 years, Citigroup revenue surged 13 percent annually on a compounded basis; core income, 22 percent; earnings per share, 24 percent; dividend growth, 33 percent; and increase in stock price, 38.8 percent. The pep talk helped calm investors for Weill’s presentation of the disappointing earnings released the day before. First-quarter earnings slid 8 percent to $3.54 billion as the company failed to reduce expenses fast enough to offset a decline in value of its investments and an increase in bad loans.

Still, Weill underscored that had it not been for the big dip in value of Citigroup’s stakes in other companies, revenue would have been up 11 percent in a “very difficult environment.”

Up to now, banks have been the main distribution channel for Citigroup products, says a representative. Credit cards, say industry experts, will be the next frontier. In the works is a proposal for Citigroup to drop its affiliation with MasterCard and market its own branded card with a name such as CitiU, say sources, that is accepted at outlets worldwide alongside Visa, MasterCard, American Express and Discover. Such an independent credit card would offer customized rewards and payment features, using its detailed customer database. Most importantly, it would serve as a marketing portal through which Citigroup can sell its financial services. A company rep denies any impending changes.

Meanwhile, the clock is ticking for Weill, who has pushed back his retirement date at least once. The tentative deadline is now 2004, but there is no clear heir in sight. At the annual meeting, Weill laughed off shareholder inquiries about his succession plans—taking a not-so-subtle jab at General Electric chief Jack Welch, who lost four top execs after announcing his choice of heir apparent.

“Our goal is not to create battles between people. We intend to do this in a quiet, appropriate way,” he stresses. Weill was also quick to suggest he’s in no hurry to leave: “My blood pressure is 128 over 80. That’s good. I have no lung problems. I’m in good shape.”

Rumors are rampant that he may buy his successor, with American Express being the obvious target. (Helping to further fuel such speculation at the annual meeting was Weill’s recommendation— since passed—that shareholders approve an increase in company shares to 15 billion.) AmEx chief executive Ken Chenault and Weill are on friendly terms; if Citigroup bought American Express, its renowned marketing savvy could be put to good use. Industry sources say such a deal is highly likely in a year or two, as Weill nears 70. An American Express representative says her company does not comment on rumors.

But to pull off Weill’s grand plan to make Citi the leading global financial-services company, there needs to be a living, breathing unified Citi brand. McCormick points to extensive proprietary research conducted last year of the brand’s DNA. Not that they’re sharing the results.

“Citibank does not have a good track record at showing people why they should like it,” says Bill Katz, CEO of BBDO, New York, who has extensive experience in the financial-services category. “They’ve depended more on ubiquity and muscle. Citi is going to need marketing over muscle,” Katz says. Does Weill have the patience, imagination and time to pull it off?

Supporters credit him and his team with the necessary drive. What they lack are the years of consistent messaging and the marketing budgets of icons such as Coke, Nike and AmEx. Citigroup may be a giant company, but it faces a grueling battle in its quest to become a powerhouse brand.