It is four years since the Midland Bank griffin symbol started disappearing from high streets to be replaced by HSBC’s abstract red and white hexagon.
The demise of the griffin was only the start. In 1998 the real work began, as HSBC signs went up in the UK’s 1,705 Midland branches and 1,000 items of stationery and literature were changed – six years after Midland became a member of HSBC Group. The budget assigned to the rebranding was £35m.
That same year the company appointed St Luke’s as the creative agency in charge of rebranding in the UK. In 1999 Lowe Lintas won the £150m global rebranding work. Last week the £15m UK creative account was put up for review amid reports that HSBC is looking to consolidate its global advertising (MW last week).
But in a financial services environment where online brands such as Egg, Smile and Cahoot are snapping at the heels of old-school high street banks, how successful has HSBC been in establishing its identity and differentiating itself from competitors?
While observers praised the company for achieving the transition from one brand to another, they agree that in the UK the bank needs to inject a bit of warmth, and build customer loyalty for the brand.
One bank marketer comments: “HSBC is relying on inertia and what it needs to develop is brand loyalty. HSBC has got the company part of it right, but it hasn’t got the customer part in place yet.”
He adds: “HSBC injected a lot of money into branches, which was quite positive. It went from being out of date to being a better place to ‘shop’.”
The company itself claims that throughout the transitional period and right up to today its market share has remained stable at 14 per cent of personal banking. This compares to Barclays’ 19 per cent and Lloyds TSB’s 22 per cent.
Marcel Knobil, chairman of brand organisation Superbrand, says: “Initially it was a struggle as customers and staff stumbled over the name. But now the HSBC name is recognised by customers. They had to break a long-standing mindset.”
An initial problem was the legal battle the company faced with HFC Bank, which argued the name was too similar to its own. HSBC settled out of court in February last year and HFC has declined to comment on it for legal reasons. At the time HFC claimed that there were more than 1,000 examples of confusion between the two names, including people walking into the wrong bank and safe keys being sent to the wrong place.
With this stumbling block out of the way, the issue facing the company is how to develop the brand concept. HSBC’s annual report for 2000 outlines the company’s strategy for the brand. It says: “HSBC has embarked on the next phase – making the HSBC brand synonymous with integrity, trust and excellent customer service.”
Tim Batten, creative director of branding at Citigate Albert Frank, agrees this phase will be important, adding: “Branding is essential because the customer has to have a view of the bank. Branding humanises a company, so people know what to expect from it. HSBC needs to convey a brand value. The public needs to have an affinity with something they know. HSBC hasn’t got that yet.”
While the rebranding was carried out globally, the bank deals with customers on a local level and the challenge will be to play to the strengths of these two extremes.
Knobil says: “The second phase will be to develop core values – which were well established in the Midland brand – but to do so in an international language.
“I think it has been difficult to maintain the sense of warmth that the griffin had. The griffin was a chat over the fence, whereas HSBC is more a chat over the Atlantic. It has tried to inject that warmth but that’s what it needs to work on,” he adds.
The company has already tried to rebuild the warmth through sponsorship of local events and working with underprivileged communities. In 1999 HSBC staff volunteered as student advisers to help schools in the Sheffield Education Action Zone tackle underachievement. It is a strategy which observers say is working and could be developed further.
Building and communicating the brand’s core values, while pushing HSBC’s international experience, is likely to be well received by customers. As world travel is opened up through cheaper flights, the knowledge that your bank has branches around the world is reassuring and convenient.
Batten says: “HSBC has a big corporate feel, which may not be a bad thing because people have traditionally been dissatisfied with UK banks.”
John Williamson, partner in branding consultancy Wolff Olins, adds: “HSBC has potential because it doesn’t have a national identity such as Deutsche Bank. It has the opportunity to develop global branding ahead of competitors. What it needs is a simple concept that consumers can grasp.”