A banker goes a-banking, volume 9: how to squander a market-capture advantage

If anyone understands that banks are complicated beasts, it is someone who grew up trying to untangle the messes.

Your marketing team can get you an advantage that is yours to lose

So: I get it.

I get how complexity emerges inside banks. I get why it happens.

What I don’t get is how it keeps happening.

Only, I guess I do.

It keeps happening because it hasn’t been bad enough for business yet for the big guns to make the big decisions around deep and sweeping change.

But how long will this be the case?

And who for? Because the giants probably can get away with this for a while longer, but the smaller incumbents will soon be paying the price and, frankly, not a moment too soon.

And yes. Of course there is a story behind this.

So.

Availing myself of the high interest rate environment last year, and belonging to the lucky few that had some money saved away, I read the Money Saving Expert (MSE) emails avidly and chose two of those fixed amount fixed deposit products that allow you to get a nice looking rate for a small sum because the banks knew they had to lure you in with high interest rates but they are not stupid enough to let you go crazy.

Not that I had the money to go crazy with but whatever, the principle stands.

If you are not UK based and you don’t know about MSE, by the way, please do look it up. You are in for a treat. It is actually an incredible public service.

If you are sitting there thinking ‘alright moneybags’, let me say… I wish. Not least because moneybags would have people to go through the admin of dealing with Gavin from Preston when my two little savings products matured and I realised that the only action available to me on their website was to call Gavin.

So if moneybags was in the house, you wouldn’t be reading this piece. Swings and roundabouts, my friends. Swings and roundabouts.

But back to my story.

Problem number one: like many of us, I work a lot. I travel a lot. And I do most of my personal admin after hours.

Gavin doesn’t work after hours.

So, having set aside a Saturday morning after a long trip to deal with some personal admin including this… after going through the rigmarole of logging onto this provider’s website which involved more steps than seems sensible… I realised that, yeah, no can do.

There was only one option: ‘Call us’.

Digital failure #1. I don’t want to call you. I don’t want to speak to you. I want to press buttons in blessed silence. It is 2024.

But OK.

So I call and, you know this already. Digital failure #2. ‘Your call is important to us, but do call back during normal office hours’.

OK.

Fine.

So I move a meeting and clear up an hour during the following week and call. And I go through security with Gavin from Preston who wasn’t called Gavin and wasn’t from Preston but he was a delightfully polite and efficient Northern lad who was, in many ways, the best part of the process.

I tell Gavin that my two little savings pots have matured and I wanted to work through my options, only the website didn’t give me any default actions.

It turns out you need to look up their rates on the public website before logging on, decide what you want, and then… it depends on which savings product you are taking actions for.

For the one product I had, I had to open a new account online and call them after opening it to make the transfer (so I had to get off the phone, do a thing online and call again, you understand, making this digital failing #3).

For the other product, they could open the new account themselves, but I had to go through authentication again.

Do I need to point out that the two different user journeys (despite the many historical reasons why they may be so) are digital failure #4 and counting.

Their rates remain competitive, by the way. Even though the whole savings market has gone down as we knew it would, they still offer good rates. Gavin pointed that out by way of apology as he was going through a process that sounded painful as his own systems weren’t responding and he was trying to not make it my problem.

As I said: Gavin was the best part of the process.

But the rest of the process was so much faff.

So you know what I did? I asked Gavin what the process for refunding the cash back to my ‘principal’ account was. He said I just had to tell him on the call and he would do it for me.

So I did.

Because it was the easiest option.

Because lovely as Gavin was, speaking to him can’t be how we do this.

And having different processes for each product isn’t how we do this.

What if the next product I chose because of its amazing rate has a different process still? One that requires a physical letter or a shamanic ritual?

I jest, but only a little.

And here is the message, dear bankers, in case it wasn’t clear: your marketing team can get you an advantage that is yours to lose.

Yes, yes, I know the rate is part of the product not part of the marketing, but actually that was what we used to say 20 years ago and the world has moved on enough for all of us to know that the experience end to end is the product, and the rate is more of an entryway these days than what actually seals the long-term deal.

The two things that keep customers with you despite poor service (and lovely though Gavin was, the experience qualifies as excellent human touch, terrible as user journeys go) are inertia and lack of options.

The latter is no longer as much of a protective moat as it once was.

So what do you do?

Bury your head in the sand or use the time you have before your customers explore their options to make necessary changes?

Because the bank in question isn’t a global player who can afford to be inefficient through sheer scale.

Maybe I don’t matter to them (who am I kidding: I definitely don’t matter to them, even though you wouldn’t have known it judging from Gavin’s impeccable manner).

But here is what opportunity looked like: they are a small bank that has survived the digital era and hopes to keep doing so.

Their product and marketing folks managed to get a great rate in the market locked down for a particular type of savings product when that’s all people were scouring the internet for, which is the definition of product market fit and capitalising on the moment.

Then they also managed to get themselves recommended as a good deal by trusted sources, so they got an influx of new customers (I checked: there was an uptick ranging between 24 and 40% depending on who you ask or what they measured). Most of those products were fixed term, giving the team anything between six and 18 months to focus on one thing: retention.

And how do you do that? You make it easy and profitable to stay. First easy, then profitable. You make it easier to stay than leave.

And for that, yes, you need some systems uplift, evidently.

And OK, six months is not long enough.

But if you put your mind to it, 12 months is.

And, frankly, you should have put your mind to it before you went all out.

The marketing campaign with a great rate should have been a step of your modernisation plan, the thing that could bring you an influx of customers even when you are 12 months away from completing your systems uplift to make the numbers look good even before the effort is complete. What a win that would have been.

But that is something you should have planned before going out with the aggressive market capture rate that you couldn’t retain because customer inertia works both ways: it may take them a while to leave you, but it will take them forever to forget what it actually took to finally leave you.

And in my case, inertia wasn’t even an option.

I would have gotten lazy if I could. If I could have just left it there languishing in a below-market but not-terrible rate, I probably would have. For a time at least.

But that option wasn’t there.

They wanted me to pick another product and made it hard for me to be lazy. But they also made it harder for me to pick another product than they did picking to walk out the door.

Their own process made it easier for me to leave than stay.

And all the while, all I could think of was: ‘I wonder what the marketing team’s targets will look like for this year and which wall they will be banging their heads against?’

#LedaWrites

Leda Glyptis is FinTech Futures’ resident thought provocateur – she leads, writes on, lives and breathes transformation and digital disruption.

She is a recovering banker, lapsed academic and long-term resident of the banking ecosystem. 

Leda is also a published author – her first book, Bankers Like Us: Dispatches from an Industry in Transition, is available to order here.

All opinions are her own. You can’t have them – but you are welcome to debate and comment!

Follow Leda on X @LedaGlyptis and LinkedIn.