Happy New Years,
Welcome back. You’ll be happy to hear I have a New Year’s resolution. 2016 is my year to avoid temptation. More specifically, there’s no room for tempting but banal “10 Things You MUST Do To Get Your Business Digital-Ready” type efforts in my 2016 writing. Nothing as dull as “10 Predictions For How Your Business Will Change In 2016”. No way. 2016 WILL BE the year of avoiding temptation…
So instead I’m going with three predictions. Because three is far less tempting than ten. Right…? Here they are…
- If it can be digitised it can be disrupted
- The pace of change is about to increase
- Mobile is going to grow and grow in importance
Bugger it – if I’m to cave, I may as well give you three more, this time business types we’ll see a lot more of.
- Incumbents craving the status quo, resisting change and stuck in the past, some making half-arsed attempts to create new business models but none finding the ability and courage required to cannibalise themselves
- Incumbents regretting not starting digital transformation earlier, and so attacking it with increased vigour this year
- And pure plays, busy disrupting both 1 and 2
So, that’s temptation given a talking to. On with the blog. Let’s move from temptation to apathy.
Like all couples, my wife and I have always kept another important someone in our marriage. In fact, for 15 years our closest personal details – personal accounts, credit cards, home and investment mortgages, our children’s Kiwisaver, and our business accounts – were all shared with No. 3.
So when we sold our home eighteen months ago to buy a plot of land and build, it seemed natural to turn to them for help – after all, they were one of NZ’s big four banks. As faithful long-term partners we looked forward to renewing fiscal vows…
It was great at first. The loan was pre-approved and it was just like old times for us three. The cracks in the partnership started when I told them I was starting my own business (Generator Consulting). Without a year’s business accounts it turned out they Just Weren’t That Into Me and the computer said no. Pre-approval vanished and I overnight I was shunned as the archetypal Bad Boy.
Did we deserve to get dumped???
It’s true losing a guaranteed monthly cheque may have reduced my appeal… but with multiple clients secured my income was now diversified, with reduced risk. We were also fortunate to have significant equity. The bank were trying to minimise their risk, however I (and not the bank) carry all the risk – banks recoup costs through property and equity in a default. Our equity meant the risk was in fact minimal.
It’s fair to say I felt pretty let down and as fate would have it during the process I was asked to do an NPS customer satisfaction survey on the bank. I duly rated them zero (an active detractor). More than that – I offered a detailed explanation why. Surprisingly, months later, they have not bothered to contact me… usually standard operating procedure for all active detractors in an NSP.
In the end we sought a mortgage broker and went to market. With a number of banks easily seeing the deal for what it was we had no trouble lining up a replacement, and the build is moving along*.
The art of moving on
Fast forward six months, out rental property has just come off fixed interest rate – seemingly oblivious to my dislike for them my old bank wants to know what I want to do, refix or stay on floating.
As an active NSP distractor I want to dump them, humiliate them, and leave them crying with a broken heart. But it won’t happen. Even with a sweetener to move (covering all legal fees), the benefit of moving is just not there.
There’s no financial incentive to move, just the cost and effort on my part – my bank gets away with bad behaviour, there’s no lost bonus, no lost job, no performance review at risk for the bank in my case. They know I’m stuck with them.
So with no incentive to leave – I’ll stay. And they’ll get to trade, profit, and have no incentive to improve all based on customer apathy.
- Fat, slow, undifferentiated oligopolies are not environments conducive to customer empowerment
- These businesses profit from customer hostages
- Price is only one component to the value equation… Value=(benefits–costs)
- If you are going to ask for customer feedback, do something with it, follow up get some insights. Detractors will detract – they will actively tell people about their experiences.
- Remember the customer now has a platform and a voice – If I was so inclined I could can now tell you the original bank is Westpac
- As a customer you sometimes need to vote with your feet (note to self)
* The build is going well (thanks for asking), it is on schedule and not ‘that’ far over budget.