8th Jun 2015
Metro Bank’s chief executive Craig Donaldson tells Customer Focus how his bank is built on a unique relationship with its ‘fans’, evangelical customers who believe in its ethos of convenience and exceptional customer service.
According to chief executive Craig Donaldson, there has been a tectonic shift in the relationship between this leading challenger bank and its market. Metro Bank is using its strong customer-centric strategies to differentiate itself from its competitors. This new culture is being driven by the intangible capital of converting its customers into so-called Metro Bank ‘fans’, forging a new relationship in which customers not only actively transact with the Bank, but actively believe in its ethos. The bank’s achievement is to have lifted itself from a market where price is the primary differentiator to one dominated by social attributes – exceptional service, convenience and customer choice. Adopting the precepts of the relationship economy has also revolutionised Metro Bank’s marketing programme. Says Craig Donaldson: ‘That’s the key. Last year we spent £60,000 above the line on advertising – and we doubled the size of the bank, because we found new customers through our fans. They told their friends that they should be customers – and that’s how we build the bank. I would far rather we focused on creating fans, and continue to keep them, by doing great stuff for them than spend money on advertising and creating a clever ad line!’
Donaldson explains how he abandoned the one-size-fits-all proposition and instead adopted a listening culture: ‘Customer service means different things to everybody. You have to be able to adapt to what the customers want by listening and then taking action. Service is all about the individual and understanding how you deliver to them.’ Craig Donaldson cites two examples. In Chiswick, his store opened the doors five minutes early, before 8am, to accommodate a waiting customer. Says Donaldson: ‘Those extra five minutes both surprised and delighted him, creating a Metro Bank fan. And that to me is what amazing customer service looks like, because it was special to him.’ Elsewhere, bank staff responded within 15 minutes to a holidaymaker with another bank who
had lost his cards and needed urgent replacements. ‘He came in to
see us and asked if we could print replacements off instantly if he had a photo ID and we said we
would give it a go – and he walked out 20 minutes later with his account set up, with a card, transferred
money and credit cards in his hand. He was absolutely blown away. Now both of
these gentlemen are telling other people about the story.
‘What happens when you create a fan is that whereas customers transact with you – fans believe in you. We want our fans to know who we are there for; they tell their friends how amazed they were and it is those amazing stories which create more customers for us.’ Metro Bank launched into the mainstream UK banking scene in 2010 at a time when the sector had been under constant fire. It now has total deposits of more than £3 billion – a 109% rise in one year – more than 500,000 personal and business customer accounts and recently announced strong full year results, which saw growth across lending and deposits.
Metro Bank has moved into the High Street, just as other banks are exiting. Zingy red, white and blue frontages hint that these are destination and fun ‘stores’, not branches which connect the bank to the community. ‘Yes, we have stores, as nobody wants to go into a bank branch,’ says Craig Donaldson. ‘Our stores are there to be part of the communities they serve: and that’s why when people ask why we need stores, well, to me if you don’t have a store how do you become part of your community? How do you add value to the communities you serve?’ Each new Metro Bank store launch is a showbiz moment – because ‘it creates a conversation and people engage with us,’ explains Donaldson.
But the bank is not concentrated on just its stores: ‘Of course we offer mobile apps, telephony, and internet access, and we deal with customers through social media, but we do think there is a really important part for the store in the total mix,’ he adds. This year has seen the 35th store opening in Tunbridge Wells, with another six in the pipeline, plus increasing investment across all digital channels. The store-based model has some unique features to differentiate itself from more traditional banks, including welcoming dogs with water and treats, welcoming children with lollipops and no in-store customer/staff barriers. The bank boasts instant account opening, with debit and credit cards issued on the spot. It has a 24/7 UK Call Centre and only closes three days a year. It is open 76 hours every week, including Sundays. Says Donaldson: ‘We do all this because we want to be there for our customers. We want them to bring children, or dogs, into the store, and we make it easy for them to do so. We win a lot of business and customers through those little things that matter, they are not gimmicks.
‘I don’t want to have customers join me just because they want to
switch. I want them to join for a fair price and a great service which I think
is the best value, knowing that we will continue to deliver a fair price and
the best value. Our contract with our customers is really clear and I think that’s
a better model for the long term.’ Metro Bank is now about 18 months ahead of
its own business plan and exceeding its targets for store openings. ‘Our
service is now so good that we measure ourselves now against how we can be
better. We don’t really compete against the other banks. I don’t want to be
rude but I’d rather focus on us being better, than being better than other
banks,’ says Donaldson.
But is Metro Bank benchmarking the quality of the customer experience with best practice outside the banking sector? ‘We did a piece of work where we benchmarked ourselves against Apple, John Lewis, Disney, and others. We think we can learn more from those sectors than within our own industry. I want to look at organisations that are truly customer-focused. Too many organisations in this banking sector talk customer service but it’s a thin veneer over the top of what they do.’ A set of key metrics is embedded to measure the bank’s investment in customer service. A monthly voice of the customer meeting analyses customers’ views in detail. Says Donaldson: ‘This meeting is massively important to us. It’s the most important meeting to me of the month and who pulls that together? Everybody – it’s owned by all of us. It’s the voice of the customer we’ve got to listen to – and act on it.’ Metro Bank is equally clear on the link between employee engagement, customer engagement, performance and profitability. With 1,700 employees and plans to hire another 500 this year, employee engagement is standard procedure. Donaldson explains: ‘We hire for attitude. We are recruiting people with the right approach and then training them, giving them the skills to do the job. What is the right attitude? Somebody who has good interpersonal skills, a good intellect, and a good work ethic. If you’ve got those three things wrapped in a bit of passion you will get on superbly well here at Metro Bank. I want people who enjoy dealing with others, enjoy engaging with customers and have good attention to detail. ‘I want to create fans, it’s all about the people who, when they see that customer standing at the door, want to open the door to that customer and get on with serving them. We have another session, voice of the colleague, because if I have happy, well-motivated and well-trained colleagues, I will have happier customers. To me I only have one strategic issue in this bank – and that’s creating the right culture for the long-term. ‘I have tactical issues and things to do – but the only strategic issue is creating the right culture for an amazing experience, each and every time. If I treat my people with respect, they will treat our customers with respect.’
Metro Bank is on course to have 150 stores by 2020. But what does Donaldson think the landscape will look like five years from now? ‘I see growth. I see how customers accept us. I see the service we deliver. The key thing is about how we grow our culture that is absolutely focused on the customer and creating fans. The only thing that will stop us achieving what we can achieve is us. Because it’s all about creating the right culture, focused on the customer, focused on surprising and delighting them, so we create fans. ‘We started in 2010 at what was accepted as the hardest of times. Since then, we’ve grown to over 500,000 personal and business customer accounts, over £3 billion in deposits, over £1.7 billion in lending and we are growing at an astronomical rate. We’ve built a model that is focused on choice for the customer and giving them power so they feel in control, rather than being the other way round. For a lot of organisations, that’s a scary prospect. ‘There isn’t a silver bullet to doing this. There are a million small things which come together to make a culture. We have a unique business model focused on the customer, we have a pervasive culture, fanatically executed, and that’s what makes us unique.’
Craig Donaldson is juggling expanding
Metro Bank with the added regulatory pressure that has been imposed on banks
since the 2008 banking crisis. So does he think it’s a level playing field for
his retail bank?
‘The level playing field for us is about getting consistent access to payments, a level playing field for capital requirements and for winning government banking – three distinct areas. ‘We are getting there and we are doing pretty well. But for me, long term, if we really want to have a totally diverse infrastructure, we have to sort out especially the capital requirements and access to the payments infrastructure. So no I don’t think it’s intrusive and stopping profitability. I think the regulators have had a hard time post what happened in 07-08 and I think it’s right that a regulator should be intrusive and challenging.’