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Beware the mismatch between marketing promise and operating performance

12 November 2012 Gareth Stokes
Gareth Stokes, FAnews Online Editor

Gareth Stokes, FAnews Online Editor

In October 2012 South Africa’s third largest bank scooped the “Most Innovative Bank of the Year” award at the Global Banking Innovation Awards held in Washington DC. FNB – part of the FirstRand Group (JSE: FSR) – was rewarded for its culture of innovation

Love it or hate it the bank’s next-generation radio advertising is credited with boosting sales by as much as 40% since its 2011 launch. In an article published at rab.co.za, 22 September 2011, FNB Head of Marketing: Credit Card & Vehicle Finance, Barrett Whiteford observed: “The campaign came about by trying to turn a slice of life insight on its head. Most of it came from customer complaints such as ‘how dare a bank call me at 7:30pm in the evening, selling me something’. We wanted to make people cry, laugh, and in some cases, offend. We then sat down and wrote the ads, as long as they needed to be, to get the story across, and then we booked them, at that duration”. The bank booked 45, 60 and even 84 second-long ads when the campaign went live in May last year.

Shopping around for a new bank

There are some who claim that the FNB add campaign is partly responsible for a greater willingness among local bank consumers to change banks. The Ernst & Young Global Consumer Banking Survey 2012 reveals that South African bank customer attrition has increased from 34% to 39% over the past year, with 70% of clients who have changed banks citing high fees as the motivating factor. The “big four” banks – perhaps excluding FNB – will be even more concerned with the statistic that 13% of their clients are considering making a change soon!

One of the oddities highlighted by the survey is that 63% of bank customers are concerned over clarity around fees despite South African banks being relatively forthcoming (compared to their international peers) with information around their fee structures. This oddity probably stems from differing perceptions, with banks believing they are doing everything possible to reduce fees while consumers find it virtually impossible to navigate the complex multi-product fee structures the banks employ. It is extremely difficult, for example, to compare one bank with another on a like-for-like basis.

What causes us to change banks? As someone who recently took the plunge after more than 25-years with one bank I can offer some personal insight. Yes, the fees troubled me, especially the nonsensical monthly “overdraft availability fee” the bank started charging a few years ago. But fees were not the deciding factor. The truth is that the R50-odd per month in savings achieved by shifting from Bank A to Bank B is not, on its own, enough to discard more than two decades of customer loyalty. The bank I had been with since high school simply forgot about me – I had fallen through the proverbial cracks – an out of sight, out of mind client. Instead of interacting with me over time to offer new and innovative product the bank left me to its impersonal (and often impossible to reach) call centre.

New bank, same set of problems

What informed my choice of a new home for my cash? On some level advertising must have played its part… But the decider was the experience that another family member had with the institution. And so I joined the throng of consumers flocking to FNB. After a couple of months at the new bank I feel right at home and it is business as usual on the personal finances front. Were it not for the new card and pin number one might say that nothing has changed at all. I now receive the same arms-length service, but from a different bank… Ironically, one of my first observations about my new bank is that it needs urgently to divert some of its attention from the glitzy and clever marketing strategies it employs to making sure that it lives up to its promises at an operational level…

The disconnect between the marketing promise and real world service started on day one, when I was told with some authority that although the bank promised to change over my stop orders it would be advisable to do so myself to avoid “complications”. I was also informed (in branch) that my request for a credit card would not be entertained until the bank had a three-month track record. (The latter was remedied by applying for the card online and providing a payslip instead).

Editor’s thoughts: South African bank consumers have a number of options to consider. You can opt for one of the ‘big four’ retail banks (Absa, FNB, Nedbank or Standard) or bank with a so-called second tier bank (such as African Bank or Capitec). To my mind the service and fee mix across these banks is similar… You may save a few rand by switching; but overall the service offering will be virtually indistinguishable. Have you changed banks recently? And did you also experience the ‘same service, different bank’ sentiment I mention in my article? Please add your comment below, or send it to gareth@fanews.co.za

Comments

Added by Irene, 15 Nov 2012
Whether banking, insurance, retail or anything else, there is absolutely no connect to reality between marketing, customer care or compliance and the operational side of the business. These are all just items to be "ticked off" by a Board of Directors, the executive & management, without ever TESTING the efficacy of all these measures the highly paid consultants recommend be instituted. The same goes for all spheres in government - it does not matter how much money or legislationn you throw at something, it NEVER improves matters UNLESS you monitor the efficacy of such spend or compliance with legislation - the poor state of education, combatting crime or even FAIS are prime examples. The only exception I have personally experienced is the truthful marketing and Customer Care department of Shoprite/Checkers - a professionally and efficiently managed entity and an asset to SA consumers - and no, I don't work for them, am not a shareholder and have no connection to them whatsoever, but just a very satisfied customer, where I am actually listened to and not only being heard to then be ignored.
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Added by Bidnis Man, 15 Nov 2012
I only use the big 4 banks with corporate banking and find FNB to be far ahead. They are not perfect and make mistakes and create frustrations but the level and incidence of these is small compared to the other three. It is my personal view that Standard Bank destroyed their dominance by going too far with their BEE around 2003 or so. I find they have a 'government mentality' as opposed to a 'service mentality' I get at FNB. Also remember that one person's experience is always skewed. I ask a fair amount of people about their experiences with business banking and I hear FNB's name a lot. It is common knowledge that advertising no longer 'sells' anything today - it creates some brand awareness and draws attention to something you want anyway - in the end it is the product which is bought by the buyer.
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