One company’s crisis is another’s opportunity and so it is beginning to appear with the UK’s beleaguered banking sector. With NatWest and Barclays both in the spotlight for, respectively, a massive technology meltdown and associated customer wrath and an interest-rigging scandal, the public perception of traditional banks is not likely to rally soon. A Serious Fraud Office investigation into possible law-breaking also means the issue will stay on media front pages.
One would expect the traditional banks to be nervous about how challenger brands could exploit this situation – especially as Barclays has chosen to “go dark” on marketing. But the banks have long been complacent about retention, relying on customer inertia and a lack of real challengers.
This time it’s different. There are new options in retail banking, including Virgin Money, Metro Bank and banks from the like of Tesco and Marks & Spencer. At the same time there is a greater awareness of mutuals such as the Co-operative Bank and Nationwide. And yes, there is also evidence customers are disenchanted enough to move their accounts. Nationwide has reported an 85% week-on-week increase in new accounts last week. The Co-op, Metro Bank and others are also reporting a rise in new account inquiries.
“The banks have longbeen complacent about retention, relying on customer inertia and lack of real challengers. But this time it’s different”
What’s interesting is that, while these challengers are increasing ad spend to catch the attention of restless customers, they are not running aggressive campaigns attacking their competitors.
There’s nothing like the upper cuts delivered by Costa Coffee via its ‘Sorry Starbucks, the people have voted’ campaign, or the vicious elbows-in-the-face tactics that can go on in airline advertising.
Instead, it’s been very courteous so far, give or take Nationwide’s gentle prodding that “we’re a building society, not a bank”. Co-op marketing and communications director Adam Harris says why/ “We don’t want to talk anyone else down because there are thousands of people who work for those banks who do their best. It will be about what we do and what we stand for.”
There, in a nutshell, is the challengers’ greatest appeal. They appear untainted by a meanness of spirit and can demonstrate empathy with “real people”, be they employees of rival banks or potential new customers. If they keep focusing on customer service, driven by genuine insights, then the traditional players need to watch out.
The need to listen to your customers and act on their wishes was a strong theme at this year’s Marketing Week Live and is explored in our cover feature. The Secret Marketer also has his say on the banking sector, who will appear online soon, and Mark Ritson talks about brand equity and Barclays.