If approved, the merger of Toronto-Dominion Bank with Canada Trust will bring with it a couple of very large marketing challenges – namely, creating a cohesive brand image and keeping disaffected consumers from bolting to the competition.

Ensuring the loyalty of Canada Trust customers, many of whom place their money with the financial institution precisely because it’s not a bank, will prove difficult, predicts Bruce Philp, a principal with Toronto-based Garneau Wurstlin Philp Brand Engineering.

But creating a believable brand image out of the combination of a bank’s strength with a trust company’s superior service and personal touch – that’s well-nigh impossible.

‘Building a brand image on ‘the best of both worlds’ is never a valid strategic proposition,’ says Philp, who helmed the Bank of Montreal’s infamous ‘It is Possible’ campaign while at Vickers & Benson, and whose current agency is doing the advertising for alternative financial services provider ING Direct. ‘People aren’t going to buy that you aren’t one of the big old banks, especially when you are as big as the new TD.’

Although the retail arm of the newly merged bank will be run by Canada Trust and will keep to CT’s model of longer hours and more personal service, it’s hard to say how successful the organization will be in meeting that promise, Philp says.

Since many of the customers who bank at Canada Trust moved there because they were frustrated by the lack of service and choice offered by Canada’s big six banks, TD will have to craft its message carefully to ensure it does not further alienate the trust company’s 3.7 million customers, Philp says.

CT customers may recall the anti-bank-merger ads Canada Trust ran last year touting how it was ‘not interested in getting bigger. We are interested in getting better.’

But bigger it will become. The sheer size of the new organization will alter the Canadian banking marketplace. The deal, which must be approved by regulators, would create a bank with 10 million customers in Canada and the largest total of personal loans.

The bank would also control the third-largest family of mutual funds in the country, and CT’s brokerage arm would be merged into the newly reconstituted TD Waterhouse, already the world’s second-largest discount broker.

The banks have not said how they plan to merge CT’s MasterCard credit card operations with TD’s Visa Card. When Royal Bank and Bank of Montreal proposed marriage, regulators expressed concern that the move might allow Visa to dominate the Canadian market.

If the TD and Canada Trust are to avoid the debacle seen during the last round of bank mergers, they need make their respective customers feel part of the process, says Ian Chamandy, president of YOUtv, a Toronto and San Fransisco-based customer relationship consulting firm.

‘During the mergers, the banks looked at consumers as sleeping dogs and their strategy was not to wake that animal,’ he says. ‘But it awoke and started to bark.’

YOUtv conducted a series of market surveys during last year’s bank-merger mania and found customers could not relate to the global competitiveness rationale that bank executives gave for their urge to merge.

As TD Canada Trust attempts to build its own brand, the added convenience and strength the merger will bring to its customers must be kept at the forefront of its marketing message, he says.

Chamandy, who is a Canada Trust customer, says he will be watching CT closely for any changes in the way it deals with customers.

Final approval for the deal is not expected until at least February. In the meantime, many alternative financial services providers will be looking to capitalize on the potential discontent of TD-CT customers, says Harry Joosten, vice-president, owner relations at St. Willibroad Community Credit Union, based in Canada Trust’s hometown of London, Ont.

‘There are a lot of Canada Trust customers out there thinking, ‘Canada Trust just changed my status without my consent; maybe I should think about changing my own status,” he says.

St. Willibroad is currently running a humorous campaign poking fun at the banks. While it has no plans to change the campaign to make direct reference to the TD-CT merger, it will likely be more effective against the backdrop of branch closures and staff layoffs the deal will set in motion, Joosten says.