FI Highlight: Yorkshire Building Society
The UK’s Yorkshire Building Society (YBS) is a bank that wanted to be sure they were attracting younger patrons that would become long term loyal customers. When it began looking into traditional marketing approaches geared towards younger consumers, the bank noticed that most banks chose to emphasize savings accounts with competitive rates. Realizing that there was a big assumption on which products in this segment actually wanted, YBS chose to conduct its own market research. Here’s what they did and what they found.
The goal of their market research was to determine the customer orientation of young people. They wanted to find out about the financial requirements of younger customers in order to offer them products that would meet their identified needs. This was a distinct and deliberate shift away from product-led research to a customer-led approach, recognizing that customers are interested in more than just the mix of products and their prices. Consumers also consider non-financial factors that include quality of service, added value and overall customer experience. YBS recognized an opportunity to differentiate itself from competitors by moving beyond the financial value framework.
Image source: telegraph.co.uk
The market research began with extensive qualitative focus groups composed of young people in order to find out about their motivations and financial requirements. Two important early findings were that young people have very little desire to save money and that having a debit card is considered extremely important beginning at about age 14. Not surprisingly, the under 12 population is largely dependent upon their parents for all financial decision making. In the 12-15 years of age group, however, young people become more independent and concerned about being able to spend, although with the knowledge that parental protection and advice is nearby. Starting at age 16, most young people have a strong desire to manage their own financial affairs, and this is where the cash card becomes a must-have item.
Another round of focus groups drew upon four distinct market segments organized by life stage: Couples planning to have children, parents who control children’s accounts, youth aged 12-15 that have their own accounts, and young people aged 16-21 with their own accounts. Expectant or new parents were more interested in long-term saving products with an eye on their children’s future, promotions that offered new families relevant “freebies,” and accounts for children that are controlled only by parents.
Image source: mybanktracker.com
By carefully researching the financial requirements of different market segments (in this case, age groups), YBS has been able to develop a comprehensive customer relationship management (CRM) system that keeps messaging highly targeted to the needs of each segment, which is much more effective than a constant barrage of indiscriminate communications.
*This post originally appeared on Instant.ly.
About Elizabeth: Elizabeth A. is a freelance writer whose work on entrepreneurship, tech, and social media has been published by The Huffington Post, PolicyMic, USA Today, and more. She regularly contributes to the Instant.ly corporate blog.