Monday, April 16, 2007

Banks and the Brand Promise

I recently wrote about the gap which sometimes exists between the folks in an organisation who run the numbers and those who manage the brand (Numbers don't make up for the branding). I guess it was inevitable that having praised the folk at HSBC for their "World's local bank" campaign, someone over zealous bean counter would go and ruin the story.

In case you are not aware, HSBC last week decided that one branch in Dorset would now only offer "Full service banking" to premier customers. The reason? Well the quote from the HSBC spokesperson was as follows - "We are trying to treat everyone fairly - not everybody in the world is equal. Some people have higher incomes and need greater services through the bank. These customers demand a better service."

For me, this seems like a case of the branding and finance teams not really understanding each others needs. I sort of understand the logic that this branch is in an affluent area and in one sense this appears to demonstrate the bank acting to meet local needs. However they are forgetting some of the basics which must come before the tag line - namely that they are still a full service bank which means that their first duty to the brand is to maintain all the services which go with the category. If this is some kind of segmentation exercise gone wrong then it's even more surprising given that HSBC managed to segment customers very successfully in the past when they launched First Direct.

If HSBC really wanted to meet local needs then they should have repeated the same steps which they adopt in other areas by set up a premium area within the bank. Banks such as Coutts can afford to put security guards on the doors and turn the majority of the population away in exchange for a higher share of business from the elite - however HSBC probably can't afford to loose the broader populations business in the UK.

1 comment:

Ron Shevlin said...

far be it for me to criticize a UK bank, but of all the potential downsides of this decision (to limit the branch's services to just the more affluent consumers), here's the one that sticks out for me:

Today's 50k earner (I don't know how to make the pound sign), MIGHT BE tomorrow's 75k earner.

The big question to me is "Is HSBC alienating future customers?"