Page 1: Introduction
This case study focuses on the way in which Britannia Building Society has continued to place its customers at the centre of all its activities in order to produce the benefits that guarantee a successful future.
Britannia is one of this country's leading financial services organisations with a strong
competitive advantage from its 'Mutual' organisational structure which provides an
unbeatable link with its customers – because its owners (members) are its customers.
Today modern organisations must pay close attention to the 3 C’s which are the basic facts of life of business success – namely customers, competition and costs. Customers provide organisations with their basic needs through the sales which the organisation is able to make to contented customers. Competitors provide organisations with a spur to efficiency. No company will be successful unless it can stay ahead of its competitors.
Costs are the driving force that determine profitability. Successful companies must continually seek new ways of keeping costs down whilst at the same time giving better value to customers.
The age of the consumer
When a firm produces goods or services it must make sure that it genuinely meets consumer needs. A business is unlikely to be successful if it tries to deceive customers through advertising and publicity but at the same time failing to meet their needs. The financial services industry has changed out of all recognition in the 1990s. In the past the Industry had been characterised by specialisation:
- Building Societies – focused on managing customers’ savings and lending money to house buyers in the form of mortgages
- Insurance companies – focused on a range of household and business insurances and the provision of life assurance and pensions.
- High Street banks – focused on managing customers’ accounts, money transmission services and a range of loan and overdraft facilities to private and business customers.
All this has changed as the government has encouraged active competition in the financial services market. Increasingly, organisations have begun to offer a range of services. Today a modern financial services organisation acts as a “one-stop shop” providing a range of benefits to customers:
- looking after their savings and rewarding them with interest
- providing mortgages and long term loans as well as short term personal loans and overdrafts
- providing bank accounts with cheque books, ATMs and other money transmission products
- providing customers with a range of insurance and assurance covers and pensions
- servicing customers’ requirements for foreign currency and overseas transactions, etc.
- providing a range of business services
- buying shares and unit trusts for customers
Many organisations, which are household names, now offer all or some of this range of services and compete strongly with each other. These include Britannia Building Society, National Westminster Bank and the Prudential.
As competition has spread within this sector, so too has the sophistication with which customers’ needs are met. This development has been helped particularly by new technologies such as the on-line database. Today, customers receive a 24 hour service from financial service institutions through automated services which are to be found on the wall outside financial services organisations and through telephone links.