Unfortunately, when I went to pay for the bag, my HSBC credit card was rejected. The immaculate sales assistant tried to process it several times but eventually, as a queue formed behind me, I was politely informed that my card had been stopped by my bank.
It was a horrendous moment made worse by what happened next. My executive friend insisted, in a flurry of French bonhomie, to buy the bag for me. He explained that when I had the money in the bank I could repay him. I exited the boutique with as much grace as I could muster. By the time I turned the corner I had my head in my hands. Quelle horreur!
I went back to my hotel room and immediately called HSBC Premier. I had a perfect credit rating, a £5,000 limit and nowhere near that balance on my credit card. Why had HSBC blocked it?
Politely I was informed that as I had been in four countries in the past five days, my spending had set off an alarm. As a result, my card had been temporarily stopped. The staff-member assured me that this was standard banking practice and explained that, having confirmed that my card was in my possession, she would remove the block and all would be well.
But all was not well. As I explained to the implacable woman on the end of the phone, I was with HSBC because they were “The World’s Local Bank”. That statement did not just resonate with me, I lived it – spending 20 weeks of the year overseas working for clients. I wanted, and needed, a bank that understood the whole international thing. I didn’t care if it was standard banking practice for four countries in five days to set off a card alert – I was not with a standard bank. I was with HSBC and expected it to be different. That was why I banked with it.
Or rather that was why I had banked with the brand. Soon after the incident I switched my accounts to another bank and gave up on HSBC.
The key point in all this is that if I had been banking with one of the bog standard, Identikit brands that had no differentiation in my view – Lloyds, Barclays and the rest – the same experience in Paris would not have caused me to switch banks. I would not have expected anything other than average service and my reaction to the blocked card incident would have been less severe.
But my relationship with HSBC was different. I believed in the brand. And when it let me down in a manner so contradictory to its positioning, I felt betrayed. HSBC lost me not despite, but because, of its brand strength.
I remembered this saga while reading about Apple’s tax disclosure this week. According to its annual tax statement, the world’s most valuable company earned £23bn from overseas sales last year but paid only £446m in tax. Theoretically, if the world were a simpler and fairer place, Apple should have paid corporate tax of £8bn on these profits. Instead it paid a tiny fraction.
Avoiding billions in tax is surely morally worse than avoiding millions. Logically, doesn’t this revelation make Apple an even worse organisation than Starbucks, which received a backlash about its perceived lack of international tax payments? Won’t this damage Apple’s brand equity even more than Starbucks’?
Actually no. Shame on Apple for not doing the right thing but the brand will not be damaged as much as Starbucks and the reason for this disparity is brand.
Starbucks is positioned on being a fair, community-inspired organisation. Its mission statement speaks about “human connection”, “community”, “responsibility” and “accountability”. Even worse, Starbucks is one of the few brands to activate this positioning and turn it into customer-based brand equity. Consumers bought into these values and Starbucks’ subsequent tax shenanigans will hurt the brand badly in the UK as a result.
Apple is a different case. Like its late, great founder, this is a brand that is wholly driven by far more introverted goals. It wants to make beautiful, simple things and crush its competitors. This is a brand that makes no comment about society or communities or anything else. Apple has no corporate social responsibility policy and happily manufactures its beautiful products in very ugly places.
In tax paying and societal terms, Apple is a much worse company than Starbucks. But in branding terms, it is in the clear. That might sound like bias on my part towards Apple. It’s not. I am not surprised Apple is not paying its full tax threshold. In the same way that I was surprised that Starbucks was not paying more.
And I’ll be working on my iPad in Costa Coffee from now on.