Page 2: The market
Over recent years, there has been continuous change in the market-place for financial services. A number of the larger building societies and life assurance societies have converted to public limited companies (plc). At the same time, the range of financial service providers has fluctuated - reduced initially by mergers, then widened by the entry of new players, some of which include leading retailers. For most consumers, the pace of change and the implications of such change have been difficult to understand.
Nationwide is now the world’s largest building society with seven million customers, 13,000 employees, 690 branches and assets of more than £40 billion. Nationwide is large enough and strong enough to offer a real competitive alternative to the banks. The main aim of the Society and its subsidiaries is to provide a full range of top value, quality financial services that are widely available and delivered with speed, courtesy and reliability. This aim is backed by the key values of fairness, honesty, staff importance and corporate responsibility.
Commitment to customer ownership
In order to continue offering the strongest possible competition to banks and other public limited companies, in terms of price and service, Nationwide is committed to remaining a mutual building society. This means the Society is owned by the customers as opposed to shareholders.
There are many reasons why Nationwide is committed to this approach. The absence of shareholders demanding dividends means that Nationwide can work to lower profit requirements and instead offer consistently higher rates for investors. Nationwide’s championing of member ownership has aroused widespread public interest. Its policy is designed to pass the benefits of mutuality on to members - with more emphasis on customer satisfaction and business efficiency and less emphasis on profit. Nationwide wants to remain the first choice for customers who want ‘membership’ of a building society and as a place where people want to work. It is only by achieving this that Nationwide can consistently achieve top industry ratings.
Nationwide has improved its competitive advantage by offering improved rates, improved services and a better product range. Its business has grown from using a strategy of differentiation which has successfully communicated a range of unique benefits providing value for buyers. These strategies have been shaped by customers’ views of what ‘value’ means to them. In practice, five factors have dominated:
As a customer owned building society, Nationwide has had the flexibility to adopt an aggressive pricing strategy, improving its savings rates across a range of products. In order to project this message, Nationwide has focused on brand development. An important part of this process is sponsorship - developing and emphasising the value represented by the Nationwide customer proposition and strengthening relationships with the wider community.