Wednesday, 13 January 2010

Beyond silo marketing

How many times have you phoned an organisation as a customer only to be told "that's another division, you'll have to phone another number" or "we can't do that, they're a separate company".

A classic example of this is the UK financial services sector, multiple product companies which organise themselves by silo (mortgages, savings, current accounts, insurance etc) all with separate contact centres and customer contact details.

Let me give you an example. At the moment I have a current account, a mortgage, two ISAs and a long term savings product with the Nationwide Building Society. I am a good customer and they want more, regularly bombarding me with information about other products. I was in the Bromsgrove branch on a Saturday a few months ago and one of cashiers tried to sell me yet another savings product.

"What's in it for me?" I asked.

"Well it's a good rate of interest" was the reply.

"Yes, but its no better than what I could get by going online" I countered. "Perhaps if you offered me an incentive, an eighth of a percentage point off my mortgage for example."

I know it was never going to happen, I was just feeling difficult, but you can imagine the reply.

"We can't do that, they're separate divisions."

I was therefore intrigued to read a profile of the Santander Bank in this week's Time Magazine. Buried deep in the profile is one of the secrets of Santander's success, namely a computer programme, called Parthenon, which does nothing more impressive than group information by customer rather than product. That's right, all of an individual's interactions with the bank grouped in one place, no silos or separate divisions.

Parthenon has enabled Santander to strip out millions in costs from its acquisition of Abbey National, it has aided cross-selling opportunities and, crucially, enables Abbey to offer incentives in the form of highly competitive interest rates, to good customers.

Apparently, this is revolutionary for the banking sector, but there is a lesson for all business here. You may think you are being customer focussed by being terribly polite and attentive, but if you are forcing customers to navigate your own internal organisation then you are not and ultimately you will pay for it.


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