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

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...
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Page 3: Reasons for change: research results

Every day, young people are bombarded with messages in the form of TV adverts, posters, mail shots or internet banners. But is that what they really want? Feedback from YBS customers allied to market research results suggested this is a differentiated market with differing needs and wants.YBS commissioned research to help it understand its target audience's needs, behaviours and motivations and to...
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Page 4: Market research: lifestage analysis

Quantitative research uses questionnaires often involving large numbers of people. By contrast, qualitative research is based on more detailed interviewing of a representative sample from the target population. Organising focus groups is a form of qualitative research, inviting, in this case, young people to talk about their financial requirements. YBS organised several workshops at which young...
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Page 5: Market segmentation

Market segmentation involves grouping customers with similar characteristics. Customer focused organisations want to know as much as possible about each of these segments so that they can develop sympathetically the products that cater for that segment's particular needs. YBS has built on its research findings to meet the needs of its youth market and build long-term relationships.YBS worked...
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Page 6: Key insights from research

The 9 months pre-birth and 12 months post-birth is a period of major change in lifestyle requiring thoughtful financial planning and self-education. Key factors that affect new parents may include the need to save for the loss of an income, because during this period national figures for this group show that:21change home25invest in the home22buy a new car35invest in new capital items (TV, DVD...
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Page 7: Key motivators

YBS then examined factors that motivate the choice of financial products by new parents. Results of this research indicated that parents expected to take a lead role in the account choice of their children up to 16. They were also likely to be swayed by relevant promotional offers aimed at the children ('package of goodies'. The desire to save for the child's future was of prime importance and...
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Page 8: Customer Relationship Management (CRM)

CRM involves developing real, effective relationships with customers, and YBS has built an important lead in this area. CRM works only if a business is able to build up knowledge of its customers, identify the different segments and adopt a different contact strategy for each segment based on this. Rather than bombarding the public indiscriminately with communications, YBS aims to use a targeted...
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Page 9: Conclusion

The Targeting Customers process has helped YBS to define an approach to engaging with customers in a better way and the new Young Savers accounts are due to be launched in 2003. The final stages of the process include the development of a customer contact strategy based on its CRM programme and the identification of measures to define success, such as retention rates, number of relationships...
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