Closures cost banks loyalty

Environment Minister Chris Mullen last week called for a “popular uprising” against Barclays Bank’s plans to close 172 rural branches on April 7 and a total of 4,000 over the next five years (The Telegraph, April 4).

Many disgruntled bank customers, their friends and families will support this opinion. And who can blame them?

While many of the powerful companies – such as banks, financial organisations and supermarkets – loudly proclaim their espousal of customer relationship marketing, what they really want is customer relationship management.

This has nothing to do with customer delight and a great deal to do with manipulating people’s trading habits to enhance company profits.

Great idea, except that customers are not fools or sheep. While they are happy to adopt the new methods of telephone and Internet banking which the banks are promoting to save themselves property and administrative costs, they will only do so if they perceive a payback, such as more efficient or faster service, or a better return on savings.

There is a difference between adopting popular and convenient direct marketing methods and making deeply unpopular moves, such as closing rural branches and penalising customers who persist in banking in person.

Don’t the banks realise that? If so, maybe the closures are part of a plan to get rid of all the old fuddy duddies, who don’t want to bank by phone or Internet and insist on sticking to the expensive, old ways.

Could it be that Barclays actually hopes these people will vote with their feet? If so, it should remember that even the most avid technocrat is likely to act in support of an elderly relative, whose life is affected by a rural bank closure.

Those who hold the purse strings should reflect that the bank is turning its back on an opportunity to collect valuable data, by abandoning personal, day-to-day relationships in favour of virtual, distant ones.

Many organisations are pinning their sales growth on Internet communication, but almost everyone finds financial product information deeply boring. So how will they make their sites compelling enough to inspire visits, especially when competition is so intense?

Before the industry’s movers and shakers decree that customer-centric marketing should loose out to accountant-centric management methods, they should calculate the cost of buying back the loyalty of the customers they are so diligently alienating.

David Lunn

Marketing manager

Hays Marketing Technology

Liverpool

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