Santander’s super sausage creates standout
Santander have blown the UK banking market their 123 current account. This has helped them win 1 in 4 of all current account "switchers" since 2013, more than trebbling current account balances, from £13 billion to £41 billion.
Here are some take-aways from their success.
Most financial services marketing is blah, blah, blah wallpaper, talking about being nice to customers, being "there to help you succeed" or being "on your side". And all the time flogging the same boring products.
Santander have used product "sausage" to stand out with their 123 current account. I liked it so much I took out not one but four of them, one for me and Mrs Taylor, and one each for our three daughters. The account gives you cashback at 1, 2 or 3% on different types of spending. And 1, 2 or 3% interest on your current account, depending on how much cash is in there. This is a stonkingly good amount of interest and cash back.
2. Use a hero product
My reaction to Santander's 123 account was that it was too good to be true and must be costing the bank a fortune. Well, this doesn't seem to be the case at first sight: pre-tax profits in the UK were up 23% in 2014 to £1.4 billion. I assume this is because the 123 account works as a "hero" product to attract new customers, who can then be sold other services. Also, the way banks work is that those extra £28billion of current account balances have then lent on to other customers to make money for the bank.
3. The power of a brand property
The genius of 123 is that as a brand property it makes a fiendishly complex product as simple as, well, 123. To be interested in the account you don't need to know or remember what cashback you get at what % level (1,2 or 3%). You get that the maximum is 3%, and this sounds a lot.
4. Word of mouth
My guess is that the 123 account has been a great generator of word of mouth. That's how I heard about it (thanks Tim). And the word of mouth has been created not through some stunt, or request from Santander to "join a conversation" or post a photo, but rather by real people talking about how good the product is.
5. Adding some sizzle
Santander have added some nice emotional sizzle to the promotion of the 123 account, using their celebrity endorser brand properties (Jennifer Ennis, Rory McIlroy and Jenson Button). Rather than just generic endorsement, these celebrities have been used to SMS (sell more stuff). Using there of them to promote the 123 account is also smart.
6. Stretch from the core
Santander have stretched from the core current account to also now offer a 123 credit card. And yes, I've got one of those as well. Clever leverage of the 123 property to enter a new sector.
In conclusion, Santander have shown that even in a market like financial service, seen as being lacking in innovation, good old product sausage can help you stand out and grow your business.
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