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Why is First Direct changing its marketing strategy?

First Direct has said it will stop using ‘great customer service’ as its key selling point and start focussing on being a ‘modern bank’. But are the two really that different?

Zoe Burns-Shore, the Head of Brand and Marketing at First Direct, told Marketing Week recently that customer service is no longer enough of a brand differentiator. ‘The problem is if you spend too much of your advertising talking about customer service then unless you’re already a customer, you don’t have any real idea of the difference it makes. It’s a great way of keeping customers, but to gain new ones, repositioning the brand in a more modern way makes the most sense.’

First Direct marketing campaign

The arguments for ditching the focus on customer service are plentiful:

  1. If I’m not a customer yet, I can’t experience this apparent ‘excellent service’ for myself.
  2. It’s expected. As Burns-Shore notes, ‘it’s just something people expect in the Amazon age.’ It’s not enough on its own to convince someone to sign up.
  3. More than one USP is needed in order to acquire banking customers – they are so (passively) loyal to their main bank, it’s going to take a lot.
  4. Relatedly, with 5% market awareness, First Direct feel the need to boost brand awareness with something that really captures customers’ attention and imagination.

But is it really the case that promoting good customer service won’t work as an acquisition tactic? And is being a ‘modern bank’ about more than delivering good service?

At Mapa Research, where we analyse the digital experience offered by banks across the globe, our view is that customer service doesn’t need to be left behind or considered overly traditional – it just needs to exist on digital channels.

The key is in how First Direct communicates its levels of service. Simply showcasing awards won or talking about a commitment to service may not be enough – people need real testimonials from other customers, and more frequently (as it is still hard to compete based on financial products in this low interest rate environment) evidence that the good service everyone does indeed want and expect can be found across all channels.

In our report on Digital Help & Support published earlier this year, we noted plenty of room for improvement in how banks offer assistance on mobile and desktop banking platforms. Unlike a telephone call or branch visit with a real person, the most common form of digital help is a page of FAQs. The rise of contextual help is something that brings good old-fashioned customer service into 2017 – and something First Direct offers. Promoting features like this could boost both its existing servicing credentials and its place as a modern bank.

First Direct contextual help

In a bid to raise brand awareness, First Direct is launching its first major ad campaign in two years, including a TV spot, that focusses on the £100 switching reward as well as the bank’s ‘five-star rated’ mobile app, which features touch and voice-activated ID verification.

Apart from the switching incentive, this sounds a lot like customer service. Making it easier to log in to and use the mobile app – isn’t that a great experience delivered well?

One customer we spoke to believes that First Direct’s new mobile app does a decent job of translating First Direct’s good customer service, ‘I’ve always loved being able to phone up and speak to a friendly representative almost immediately. However, in the past year or so, I began to wonder whether this was a good enough reason to stay on as a customer, given that other banks had significantly better digital experiences. The new app, coupled with the knowledge of how good their telephone customer service is, does just about enough to convince me that I should stick with them.’

This is probably one of the main reasons that First Direct doesn’t want to be known as a digital bank, and has no intention of ditching the call centres.  Burns-Shore commented: ‘We’ve asked our customers if they’d prefer First Direst to be digital only and there’s actually resistance because around mortgages and complex banking issues people like to be reassured that there’s a human on the other end of the phone waiting to help them. However, she does then go on to confirm that ‘around 75% of all our transactions are now made digitally so it’s a huge opportunity, but we also have a great services proposition and that’s a real asset against the new players.’

Subscribe to our Mobile Banking Monitor to see all the changes First Direct, and 50+ other banks around the world, have made to their apps each quarter.

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