HSBC raise question: what the hell’s a sub-brand?!

"Sub-brand": one of the most mis-used and misunderstood terms in branding. According to this article in Marketing, HSBC bank are the latest to have a go at it: "HSBC is realigning marketing based on six sub-brands targeting consumers and businesses according to levels of wealth."

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 Let's try and shed some light on this. The HSBC consumer offer has:

– At the top, Private Banking: for high wealth folk, with its own separate website

– Premier: seems to be focused on international travellers, who want their bank account to work in different markets

– "Advance": HSBC's attempt to bundle all sorts of stuff (Worldwide
Travel Insurance, Roadside Breakdown Assistance, ID theft assistance)
in return for a £12.95 monthly fee

– A fourth sub-brand to be confirmed

– At the bottom is the bog standard "bank account"

Then we have HSBC Corporate for big business and HSBC Business for small business.

1. Hang on a minute. What the hell is a sub-brand?!

– Sub-brands are products with the same fundamental mission as the "mother brand", but a slightly different personality, to reach a new target audience and/or
charge a price premium. For example, its easier for Gillette to create a distinctive personality and charge more for "Gillette Fusion" than "Gillette 5 blade".

– They tell a new chapter of the same brand story, not a whole new story: e.g.
Gillette's Fusion is the latest and best chapter of the story "A best a
man can get".

– They have the same family name (e.g. "HSBC") and a new christian
name (e.g. "Advance", "Premier" etc.). Importantly, to be a sub-brand we should be able to say the mother brand and sub-brand together in one breath e.g. Bacardi Breezer, Gillette Fusion.

– Most often, sub-brands have non-descriptive names, such as Fusion, so they can be "loaded" with distinctive personality/tone/feel

Importantly, this is more than just a naming debate, as sub-brands tend to get more investment of time and money, and so should only be used when really needed.

2. Why sub-brands are dangerous

The term sub-brand is dangerous, as it can lead to fragmentation of investment, and dilution of the brand. Brand teams create new names, identities and marketing campaigns for each sub-brand. In fact, they end up creating new brands telling different stories, rather than reinforcing and building off the main brand.

Picture 1 Funnily enough, the previous incarnation of HSBC in the UK, Midland Bank, showed the perils of sub-brands back in the 1990's. They created three different "added value" current accounts charging a monthly subscription (sound familiar?!). Each had its own name, logo and ad campaign: Meridian (I think for older people), Vector (young thrusters) and Orchard (savers). The move created confusion for consumers and employees, and the sub-brands were ditched.

3. Back to HSBC: over-using sub-brands?

What we have with HSBC is a set of products targeted at different consumer needs. So far, so good.

However, some of these don't really seem like sub-brands, but rather product "platforms":

1. "Everyday" bank account,

2. International (would be clearer to call it this rather than "Premier"?)

3. Advance (added value current account)

4. Business: small and big.

The service delivery for each needs to be different of course. Everyday consumer banking can be online, whereas as big businesses need dedicated account managers, for example. But the emotional stretch doesn't feel that different. Therefore, do HSBC really need to create sub-brands like Premier and Advance, each with a different looks and feel, and new name that need explaining? I'm not sure.

The one where you could argue there is more emotional stretch is private banking (prestige, pampering, personal sevice). This has its own separate website anyway, so can look and feel a bit different.

4. Different approach: Lloyds TSB

Interesting this other bank taking a different approach. They have a "Classic" current account, then four "added value accounts", that go from Silver to Premier. Each one is more expenisve for more benefits. This feels easier to navigate, and creates less dilution of the brand, though I wonder if four options are really needed.

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In conclusion, think carefully before you rush into sub-branding. Use it only when the emotional stretch is big, probably linked to a premium price positioning. And if you do use it, ensure you are telling a new chapter of the same brand story, like Gillette Fusion, not fragmenting the brand like Midland did with Vector.