H: Jayne Constantinis
A: Gillian Almond, Santander Current Accounts
B: Mamta Bhatia, psychologist
H: With everyone vying for our business we’re all pretty used to shopping around for the best deal these days, but is there any advantage in remaining loyal to our existing suppliers? All that and more coming up
Break
H: Hello and welcome to the Consumer Advice show, I’m Jayne Constantinis. Now, you can’t turn around these days without a billboard advertising the promise of the best rate on the market. In addition there are a plethora of price comparison websites, from Meercats to operatic tenors urging us to shop around. No matter whether it’s our home or motor insurance, a new mortgage, credit cards, savings, current accounts or utility bills, there are so many choices. However have you ever considered that your existing provider might just be able to match or even beat an offer you’ve noticed from a competitor, and that remaining loyal might offer you more benefits in the long run if the relationship is right? Well joining me today to discuss this is Gillian Almond from Santander current accounts, and business and consumer psychologist Mamta Bhatia – thank you to both of you for coming in. And coming up on the show today – how being loyal to a provider can reward you with better deals. We explore the psychology of loyalty and why it’s important to take stock of your relationships to ensure they work harder, and all of your questions will be answered live. And we are live so if you’ve got questions or comments for our guests then please use the box on your screen, click send, send us your name of course please, and if you’re Tweeting while watching the show please use the # tag Studiotalk TV. Now research from Santander suggests that we are quite a loyal bunch, the average current account holder in the UK has been with their bank for 18 years. But in the tough business environment, everybody wants your custom. So, Gillian, isn’t this the perfect time for we consumers to be shopping around?
A: Absolutely, I think it’s very important that consumers continue to look at their finances in particular and shop around. There are a plethora of avenues in which they can find information, from the internet to the multiple banks that they have choices of on the high street. So it’s very important that they take stock of their finances and review them on a regular basis
H: But your argument would be that we are often being seduced by short term, or the promise of short term gains – is that possible?
A: I think there definitely is an element of that in the marketplace and people are attracted by the low entry level rates to get them in a – to get them the best deal in the short term, but we think it’s important to look at the overall lifetime and relationship of the customer and that’s why in Santander we recently launched the zero current account which rewards our existing customers for their loyalty and we want to really appreciate the existing relationships they hold with us, and that’s why we launched this account, it’s really saying thank you to our customers for staying with us
H: Mamta, you know in psychology terms it’s human nature isn’t it to shop around, isn’t it the sort of hunger / gatherer instinct in us?
B: Well it’s either fight or flight so those who want to fight will really go out there and look for the best deals in the market, and it’s so competitive right now because of the economy as you say, or there’s people who are just like flighting and just sitting, you know complacent with what they’ve got, but I’d really encourage people in this current times to go and look at what is out there
H: And is it just the grass is greener or do you think it’s something – and would that be the case anyway – or do you think it’s because of a particular economic climate?
B: I think the grass will always be greener, but to Gillian’s point it’s really about looking at the long term relationship, so there are lots of deals out there trying to entice people and say this is great, come on board, but actually as a consumer I think people really need to look at what they’re getting in the long term and think about the benefit that that brings to them, rather than the immediate hook
H: I mean your research was very interesting, 18 years the average amount of time that people are loyal to their bank. Did anything else interesting come out? Was there for example a difference between men and women’s attitude to loyalty?
B: Very interesting
A: You can answer that one!
B: Very interesting, you know men are more loyal to their bank than women are apparently and apparently to their wives as well, so the research has revealed! But like we said it’s different strokes for different folks and ultimately it’s about what service is that bank providing to you and your wife, you know how long are you going to be to that cause, and it’s about the long term relationship like we say
H: And what – you know how do you as a very large organisation respond to a change in climate like this, because you know it takes a long time to move a large organisation like yours
A: Absolutely I mean obviously at Santander it is – always wanting to be innovative and wanting to be sort of a leader in the marketplace and to have the products as well as obviously the customer service and the delivery we give to our customers, so it’s very important to us that we launch products that meet customer’s needs, and I think that our zero account has been very much focused on existing customers, buck that trend in the marketplace as you touched upon, there’s a lot of accounts out there, a lot of different financial products out there that attract you with the kind of low entry level to bring you over, but we want to say actually hey, let’s reward our existing customers because they mean a lot to us and we want to appreciate the relationship that they bring to the bank
H: We’re going to take questions throughout the show but I want to now just look at what Tony Gibson has sent in. He says “I tend to stick with a provider if it means minimal work for me. Is it really worth my while going through all the trouble of comparing loyalty reward programs – doesn’t that mean a lot of work for me?” And I’m sure that – that thought’s echoed by a lot of people
B: Yes it’s really – he’s got to ask himself what the impact would be of not looking around and also looking at the service he’s been getting right now, so is it working for him, is it not, how has he been rewarded for his custom with this, with this bank, so when he looks at all of these things and if he finds that he’s not actually very satisfied I think he should really look around and see what’s out there
H: I mean this idea of the amount of work involved, that really is where a lot of people, I confess I’m a great one for changing utility bills – my utility providers, they come to the door and they show me the figures and they say all you need to do is sign here, and I’m hooked, so I’m a classic case. Sorry about that!
A: I think it’s a very common observation that consumers have, and particularly when it comes to financial services, I believe there’s a degree of complexity in moving from one provider to another, and in Santander we pride ourselves on our account transfer service, which enables customers to move their current account from another provider to ourselves hassle free, so we basically just take a signature from you and we do the rest of the work for you, we’ll take your direct debits, your standing orders and it’s all done behind the scenes
B: And that’s fantastic, and I think just to build on your point Gillian, it’s really a case of thinking what’s the benefit of doing this and what’s in it for me, will I get something from it and often we can overcomplicate matters in our minds, so just speaking to Santander, just walking into a branch and when you receive that fantastic customer service you’re more likely to go with it
H: Great. More to come in a moment, don’t go away because after a short break we’re going to look at the psychology of loyalty and why it pays to make sure that your relationship is working for you
Break
H: So if you’ve just joined us I’m joined today by Gillian Almond from Santander current accounts and consumer and business psychologist Mamta Bhatia. Mamta, I just want to ask you about this psychology of, of dealing with our existing suppliers – what’s going on and what do you mean by this business of testing the relationship to make sure it’s working?
B: Yes so as human beings just as we have relationships with each other, we also have relationships with the organisations that we deal with, so every relationship has a state of healthiness, and ultimately, if we’re – if a relationship is healthy then actually we’re more loyal to that organisation or that person, but if a relationship isn’t as healthy we’re more likely to look at the other options that are available to us because inherently it feels like we’re losing out in a way or we’re missing out in something, so this is what we say about the state of the relationship, the state of that affair
H: But isn’t this at the heart of the issue because what feels like a healthy relationship to me the consumer, may not feel like a healthy relationship to you the provider. How do you make sure that the two things meet in the middle?
A: Well that’s why it’s key that both ourselves and our customers are happy with both the products they’re getting and the customer service that they’re getting, so we always make sure that we are taking stock of what’s happening in the marketplace and we’re also speaking to our customers on a regular basis to make sure we’ve got that insight so that we can make the necessary changes and evolve our product range to make sure that we’re meeting customer needs
H: And what about this very British thing we have about not asking for a better deal, you know it’s the not haggling, it’s the not putting yourself out there
B: Well I think it’s about assessing the impact of not doing that and thinking actually what will I lose out on and what will I miss out on if I don’t, you know just go in there and have a conversation with some, it doesn’t have to be complicated
H: Do you think we’re getting better from your experience at Santander, we as consumers are getting better at saying actually this is not working and what I’d like you to do is x, y and z and if you do that I’ll stay with you?
A: Absolutely, I think we’re getting feedback on that all the time, you know whether it’s through our call centres or directly through our branches, and you know just the other day I had a branch feedback to me about a customer who’d called in about their mortgage, and obviously looking to renegotiate, and then when they started to expand the customer’s requirements they recognised that they didn’t have their bank account with us, so it was a natural opportunity then to talk about this fantastic new zero account, they’re already an existing customer with us through their mortgage relationship, so we were able to talk to them and then bring that over, so the customer walked away with a total package and just felt really happy and inclusive and really felt that we’d appreciated them as a customer and appreciated the duration of their relationship with us
H: I suppose what you describe there means that the empowerment, because that’s really what it’s about isn’t it, the empowerment of the consumer, is nothing to fear from your perspective because it means you get to learn more about what they want
A: Absolutely
H: It can only be a good thing
A: It’s if you don’t ask you don’t get, you’ve got to probe, you’ve got to make sure, and I think that’s why we’re really keen – going back to your original point – that customers and consumers, wherever they’re banking – are actually making sure that they’ve got the best deal that they could possibly have, and it will mean, you know, speaking to their current provider, it will mean looking at the best buy tables and getting on the internet and just getting more facts about what’s available for them
H: Let’s just address what Peter Barker has raised. He says “it always seems that the best deals are reserved for new customers? Is there really value in being loyal?”
A: Absolutely
H: Well you would say that wouldn’t you? Prove it!
A: Yes I mean I think there is definitely this – and that is the way the market plays particularly in financial services and that’s why we at Santander are very proud to talk about our zero current account because it really does buck the trend. If you are an existing mortgage, investments and indeed savings customer now you can actually take this new account and it’s available only to you as an existing provider, you can’t get it if you bank elsewhere, save elsewhere, you have to already have a relationship with us, so that’s why we’re saying to these customers come to us, get the zero account and we’ll give you free ATM usage worldwide and free overdrafts
H: But this perception Mamta that we’re not being valued, that other people, you know the new customers are more precious than us, that really feeds into the psychology of it doesn’t it?
B: Yes completely, because it’s not just enough to be loyal, actually you need to be appreciated and rewarded for your loyalty and I think it’s fantastic you know that Santander are doing this, because often you know there’s this glamorous hook and you’re hooked in and then what? So you know relationships never stand still, ultimately and you need to keep feeding into those relationships and vice versa
H: Yes. Let’s look at this from Maureen Finch. She says “there are some suppliers that do the opposite of rewarding loyalty aren’t there? I’m a Sky Broadband customer and pay more than their introductory rates I see them advertising at present. Shouldn’t they be offering this to me too?” well I suppose the answer is yes but why – you know why would they not be doing that?
B: it’s a very, very difficult question, I think literally you know organisations or people just think about the initial catch unfortunately and it’s if – you know you don’t nurture those relationships then people will get upset and they will voice their opinions and you know to maintain that relationship you’ve really got to invest in it and you’ve really got to listen to your customers and give them what they need, and if you don’t do that then you have very upset people, you know emailing shows like this!
H: Yes. And you’ve raised an interesting thing there haven’t you because it’s not – it’s not necessarily about always getting it right, but it’s about listening when you get it wrong
A: Absolutely
B: Yes
H: And doing something about it isn’t it?
B: Fundamentally I mean everybody just wants a good listening to, and you know if you’re going to a place and you’re getting a good listening to and you’re getting someone, talking to someone who understands your needs and can accommodate them, not just pigeon hole you into a box, then you’re more likely to give your time and your energy to that organisation or that individual.
H: Ok. Lots of questions coming in so I’m going to try and rattle through as many as I can. This is from J. Terry, Kingston-upon-Thames – “I find that I end up with so many supermarket loyalty cards because I need to spread my shopping round to get everything I want at the best prices” – quite right, we all do that – “it doesn’t really make sense having so many loyalty cards.”
A: I suppose it’s because she’s obviously going to different places to seek out the best deals, and while she’s there she’s making use of a loyalty card and getting something for nothing essentially, so there’s an element of, you know, keep up that behaviour and the rewards will come through, and I think we’re doing something similar in Santander, we’re wanting to reward customers for coming to us and using our bank for whatever financial need they may have, as I said banking, savings, investments, and as a consequence they’re going to have access to a fantastic zero account
H: Thank you. Don’t go away and don’t you go away because in a few moments we’re going to be taking more of your questions live
Break
H: And if you’ve just joined us today then this is the Consumer Advice show and we’re taking questions about the merits of consumers remaining loyal to their existing suppliers, and you’ve been sending lots of questions in so let’s just take some of those now. One coming through here from Aston, Aston Cave who says “I don’t feel I understand my financial products well enough to know if I’m getting rewarded suitably. Any advice?” That’s interesting isn’t it because I think a lot of people who are trying to poach our business make it seem unduly complicated, almost to make us afraid because we don’t understand it
A: Yes. I think it’s very important, questions like that, that – and the customer takes stock of what’s available for them in terms of information and guidance. I think I touched upon it earlier in terms of the internet, in terms of the sites where they can get impartial advice, but also they can go onto the high street, they can go to the plethora of providers out there and get information from financial advisors to help steer them, and to give their finances a bit of a health check.
H: And we’ve got one here, in fact somebody who’s clearly taken your advice, from Mr J Dearing I think it is. He has had the same current account, not for 18 years as your research said, but 35 years. He’s never even thought of changing it, force of habit I suppose, it just seems so much hassle sorting out loads of direct debits etc that he doesn’t bother, but he wants to know is it worth the hassle?
B: Yes I think, you know like I said earlier it’s about not over-complicating it in your mind, so thinking about ok, am I happy with what I’ve got, if I’m not happy what are my options, what’s out there, what do I like the sound of and then really sitting down and going into a branch and speaking with someone about the offering and seeing if they like that or not, and if so making the shift over, often especially if we’ve got a fear of finances we can over-complicate things but it doesn’t have to be complicated, especially if you look to what’s out there in the web in terms of direction like Gillian’s mentioned
H: No you’re right aren’t you because sometimes the value is in going through the process, you might not change provider, but the very fact that you’ve looked at what’s out there makes you feel more confident that you’ve made an informed decision
B: Yes absolutely
A: Yes I mean I think it’s very commendable to have that relationship, but absolutely make sure that everything’s in full working order, you’re getting exactly what you need from your provider, and if not look somewhere else
H: I mean it’s a bit like your car goes in for an MOT every year, why shouldn’t you have a quick MOT of all your personal finances and your household bills and everything? If you’ve got time. Let’s have a look at this question from Crazy Al as he calls himself – “I’m coming to the end of my fixed term mortgage which is currently on a very low rate and dreading shopping around. My current provider doesn’t seem to be that concerned about keeping me, as they’ve offered me a take it or leave it rate. Should I threaten to leave to get what I want?” Does that work Mamta, threatening to leave?
B: Well I think it absolutely does because you know it shows you what you then mean to that person, to that organisation. If you’re giving them an ultimatum they need to put all their cards on the table and say this is what we can give you and this is how we can keep you as a loyal customer, but if you’re not happy with the offering I’d seriously encourage him to threaten them, look around and maybe move
A: Absolutely
H: By the sound of his provider not making any effort to keep him, I mean that’s shameful isn’t it, for any organisation?
A: Absolutely, I think again you know the mortgage business, they do need to make sure that obviously they’re getting the best deal all round for that customer, and the customer needs to make sure that the mortgage provider is obviously meeting their needs and that should be about the total package, it should be about the customer service as well as the product, and I think as Mamta’s just touched upon if they’re not prepared to take that ultimatum then he should go
H: You should go, you should walk. Sally Arthur has said or asked “is it worth shopping around for comparison prices and then going back to your regular provider to see if they can match the best quote?” That sounds like a very sensible and canny strategy
B: Yes I think it puts you in a place of great influence actually when you go out there and you see what’s out there and you come back to your provider again, a test of their commitment and loyalty towards you and you can, you know you can say to them this is what I found out can you match it, can you do better? And then you’ll see how much you mean to them and if you’re not satisfied with their response, my advice is – walk. You know
H: What would you say? If you’re on the receiving end of that sort of –
A: Absolutely no I think it’s exactly as Mamta said, I think they do need to understand what’s available to them, what’s the best price, what is their value to somebody else, and then go back to the incumbent provider and say what are you going to do for me?
H: Ok we’re almost out of time, so could you just give me your sort of top tips for your advice to consumers, how to get the best out of organisations like yours and how you think you should behave to get the best deal from your providers?
A: Yes I think as we’ve touched upon already, customers need to look around, do the financial health check, look at the accounts on a rolling annual basis as a minimum, to really make sure how it stacks up in terms of what they want from it and what the competitors are offering, and I think as we’ve touched upon in terms of Santander we want to reward customer loyalty and say thank you, so that’s why our zero account is now out there and available to existing mortgage and savings customers
B: And my advice would really be look at what you’ve got, are you happy with it, yes or no? And if you’re not then really assess what’s wrong, what are the gaps, what’s out there, what’s filling the gaps that I have and then go in to have those conversations with those people, getting more information, go back to your bank and say this is what I’ve got, can you match it or not, and if they can’t, walk
H: Yes and I think you said it earlier the best thing is if you don’t ask you don’t get
B: You don’t get. Absolutely
H: Thank you very much, really really interesting,
B: Thank you
H: Thank you for coming in to talk to us. I’m afraid that’s all we’ve got time for, my thanks to Gillian and Mamta. If you want to find out more about how you can benefit from remaining loyal then visit Santander.co.uk. Thank you for watching, bye bye
