Chief Global Analyst
Insights Division, Kantar
In a year when South Africa flirted with its first recession in over a decade, 2018 still saw some local brands prosper. Not least among these was First National Bank, South Africa’s oldest bank and one of the “Big Four.” Against a soft economy the brand has managed to grow market share. In 2019 FNB ranks second only to Standard Bank in the BrandZ™ Top 30 Most Valuable South African Brands with a brand value of $3.5 billion. While this is down from last year, it retained its value twice as well as any of the other big four banks.
The origins of FNB’s success go back over a decade to its commitment to invest in digital services designed to make customers’ lives better (while allowing the bank to realize more value from its customer base). This commitment is exemplified by the First National Bank mobile app. Far from limiting the scope of the app to just financial transactions, FNB has sought to make it an integral part of customers lives.
The FNB app offers a much wider range of financial services than is typical. For example, it allows customers to list and sell a home, renew insurance policies and car licenses, test their financial fitness, get budgeting advice, and even locate a local plumber. Customers also earn “eBucks” for their purchases and can purchase directly from the eBucks shop using the app on their mobile or from participating retailers. In the year ending June 2018, transactions completed over FNB’s app increased 65 percent over the previous year.
This focus on the customer experience is critical to FNB’s growth strategy and is one that many large and well-known brands would do well to emulate. While some brands focus single-mindedly on customer acquisition, FNB has recognized that the first step for a big brand is to leverage its customer base in order to ensure future growth. High customer satisfaction ensures lower levels of defection and more positive word of mouth. As a seminal study from Bain concluded, it’s five times more expensive to acquire new customers than to retain older ones.
Of course, to grow share a brand must reach out to new category entrants or encourage people to switch from other banks. FNB has sought to amplify its focus on making customers’ lives better with campaigns like “How can we help you?,” which speaks to the power of help and helping people to help themselves. Broadcast campaigns may prime new entrants and switchers to choose FNB, but to make opening a new account as easy as possible, FNB now offers the opportunity to “Switch with a Selfie.” In 2018 FNB reported a 4 percent increase in customer numbers to 8.2 million.
Big brands also grow by extending beyond their existing category to new ones. Today, faced with new competition, FNB is repositioning itself as a diversified financial services company, leveraging the transactional data of its 8.2 million customers to sell additional services across the three pillars of lend, invest and insure. As FNB increases its focus on insurance the only question is whether the bank will be able to sustain the same customer satisfaction in a different business and continue to grow.
So, to sum up, FNB has created a playbook for South African brands based around a few central themes:
1. Lean into technology. The more people experience a product or service the more meaningful and salient it will be, a fact that explains why FMCG brands have traditionally had high brand contribution scores in BrandZTM data. FNB’s creative embrace of mobile has enabled the brand to be more useful and present in its customers lives—and in doing so create a more resilient brand.
2. Focus on existing customers. By working hard to make the lives of individual customers better, FNB has reduced churn, which is a major factor in unlocking growth. Brands should seek to go above and beyond for their existing customers in addition to looking for new ones.
3. Streamline conversion for new customers. FNB has made opening a new account as easy as possible. Brands that seek to create friction-free onboarding or sales processes will always win out over those that require people to fill out forms or jump through hoops.
4. Change the narrative. By reaching into new areas of financial services and support, FNB is both extending what it can sell as well as finding new areas for growth. Brands should look for areas where they can offer complimentary services to existing customers as well as improve their range of offerings for new customers. More services not only unlock more revenue, they also foster a deeper connection with consumers.
Above all, FNB shows that when faced with a challenging environment, brands must find creative solutions to reach and support a more demanding and discerning customer base. Whether the brand’s current progress is predictive of future success remains to be seen, but for now, FNB has laid out a good blueprint for marketers to study and hopefully emulate.