Page 3: A fresh approach
On 19th February 1997, Sainsbury’s Bank opened for business. It offered two Visa credit cards (Classic and Gold) and two savings accounts (Instant Access and Christmas Saver). The Bank initially offered a 24-hour telephone banking service and trialled Bank Information Points, which include marketing literature as well as a Freephone to the Bank’s call centre.
Sainsbury’s Bank is based largely on telephone banking and therefore has none of the costs of staffing branches nation-wide. Consequently, the Bank has been able to offer highly competitive rates of interest when compared with more traditional banks. This is important as today’s customers are knowledgeable and willing to shop around for the best interest rates.
The chart indicates how Sainsbury’s Bank customers were able to secure a superior interest rate in 1997.
Reward schemes have also been created to win clients. Customers transferring balances to Sainsbury’s Bank credit cards received either cash incentives or Sainsbury’s Reward Points that shoppers exchange for goods or services from Sainsbury’s stores. In addition, there were prize draws with one million Reward Points given to one customer and 10,000 Reward Points given to ten runners-up.
Sainsbury’s Bank also has its own cash dispensers. The Bank has 73 of its own cash machines and, customers of Sainsbury’s Bank can use their cards in around 14,000 LINK cash machines throughout the UK.
The Bank’s approach to promoting and advertising in its early days was to adopt and seek to gain the high ground in direct banking through the 'fresh banking' theme. Sainsbury’s Bank is all about service, ease of access, value for money and choice. Sainsbury’s supermarkets have a long history of offering value for money to their customers, offering first class service and providing an extensive choice. It was imperative to build on these core qualities in developing new banking products. Moreover, it was possible to emphasise the 'it makes sense' approach to banking at the supermarket.
Today’s customers regard time and convenience as being of premium value. A supermarket like Sainsbury’s is designed to offer high quality products and the best possible value for money without making you wait to be served. The real skill lay in translating these associations into a banking context.
Customers quickly identified with the new 'fresh banking' from Sainsbury’s. Moreover, customers felt secure because of the established presence of Bank of Scotland. What Sainsbury’s Bank then needed to do was to roll out a range of products and services which would make it the envy of existing banks.
The attractiveness of the fresh approach was reflected in the statistics, which showed that in just over eight weeks, Sainsbury’s Bank had over 100,000 customers with deposits of over £100,000,000.