Meeting customer needs - Young Savers
A Yorkshire Building Society case study

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Page 2: Buying decisions and value

Traditionally, providers of financial services for young savers have competed on products such as savings accounts by offering more attractive rates. A major problem with this approach is that it is product-led: it assumes that the provider knows what the customer requires.

YBS has radically altered its way of thinking about younger savers by moving from a product-led approach towards a consumer-led approach. To date, YBS has used a product-led approach successfully, given its aim to offer long-term value to its members. However, it has come to recognise the importance of creating a customer-focused experience that gives prominence to other factors in addition to financial value.

There are two main ways of providing value to customers:

  • Financial: through the products offered and their price
  • Non-financial: including quality of service, customer experience and added value.

Within the financial services sector the traditional approach has been to regard value as 'financial' both for the customer and the provider. However, in the current highly competitive climate with new entrants to financial services such as supermarkets and online providers, it is important for YBS to stand out from its competitors and that's where 'non-financial' value counts.

YBS feels that while 'financial' value has a role to play, 'non-financial' value is a key differentiator in an increasingly cluttered and complicated market. Yet it has been largely ignored to date by financial services providers, who still continue to compete on rate. An example of 'non-financial' value was found in the research conducted by YBS showing that young people (up to 12 years) show a strong preference not for a favourable introductory interest rate but for tangible things such as shopping vouchers and mobile phone top-up cards; hardly surprising, given the popularity of mobile phones.

Yorkshire Building Society | Meeting customer needs - Young Savers