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NAB social media break-up campaign pays off

National Australia Bank’s (NAB) break-up campaign – a promotion it commenced engaging various social media platforms such as Twitter and YouTube in mid-February to attract mortgage customers from rival banks – has paid off:

The bank has recorded a “significant increase” in the number of mortgage customers switching from Commonwealth Bank of Australia (CBA) and Westpac to NAB’s lower standard variable home loan rate since the launch of the break-up campaign – by 43% and 37% respectively, according to NAB’s group executive, personal banking, Lisa Gray.

Gray said that NAB would continue to offer to pay A$700 ($748.61) in early exit fees if CBA’s and Westpac’s mortgage customers switch to NAB’s standard variable home loan rate.

NAB’s other rival, Australia and New Zealand Banking Group (ANZ) scrapped its mortgage exit fees in November 2010.

The NAB’s social media has also helped the bank register a 70% increase in the number of new mortgage customers since the “break-up”.

 

NAB broke up with rival banks just before Valentine’s Day

On the weekend before Valentine’s Day, NAB commenced the break-up campaign on social networking site Twitter, posting a tweet that read: "Sooooo stressed out. Have to make a tough decision and I know I’ll probably hurt someone’s feelings! Arrggghhh."

NAB exploited social media to involve its followers in its ‘personal affairs’, publishing subsequent tweets such as: "Thanks for your concern, everyone. Relationships can be tough sometimes! Good advice helped".

NAB then posted a link to its YouTube page, (which was set up in 2005 and has had 71,852 channels as well as 238,807 total upload views) and its micro-site www.breakup.nab.com.au, for more information.

The YouTube video showed somebody – NAB – writing a letter to Commonwealth of Australia Bank, ANZ and Westpac, explaining the break-up:

"(...)I’ve decided I need to break up with you. Honestly, it isn’t you…it’s me. I’ve changed. I’ve moved on. (…)

"It’s not just one thing that got me to this place – remember when you tried to convince anyone who’d listen, your customers had a great variable standard rate on home loans, but actually it was me who offered my customers the lowest of the major banks for the past 18 months. Me. Not you. That really hurt."

 

Gray: NAB customers “A$47 per month better off” now

Gray said that NAB customers were “currently A$47 a month better off on an average $300,000 home loan than the customers of the most expensively priced major bank”.

The bank said that it had began to abolish monthly account service fees on most popular retail banking transaction accounts 22 months ago.

Gray added that NAB also slashed fees several personal and transaction accounts, enhanced its credit card offering by making it “fairer” for customers and doubled its ATM-network in a matter of almost two years.

 

SapientNitro, Fiserv, Aite, Ernst & Young all pro social media

In December 2010, RBI published an analysis by Alex Sion, vice-president of financial services at SapientNitro, an interactive marketing, design and technology services agency, who examined the impact of technology on retail banking.

Sion discussed what banks can do to innovate and stay relevant as they enter into what he calls a new era of engagement banking.

Carol Cowan, vice-president product management and marketing at Fiserv, told RBI in December that social media websites have become such an integral part of consumers’ everyday lives that banks could no longer ignore them.

She argued that social media offered a powerful way for lenders to connect with customers of all generations.

In February this year, RBI spoke to Ron Shevlin, senior analyst at the consultants Aite Group, who explained how banks can exploit the potential of social media to their business advantage.

In March, Ernst & Young argued that a coherent social media approach will help improve brand perceptions and leverage the benefits of online advocacy in its first global survey of customer behaviour in retail banking.

In March, NAB launched UHomeLoan, the first product on the assets side of NAB's online-only subsidiary UBank and the latest step in the online bank’s rapid development.

 

Banking challenges in Australia

RBI also reported in March that regulatory reform on banking competition in Australia was one of the primary factors driving change in the market.

All of the country’s senior bankers have been called before the country’s Senate Economics Committee in relation to three amendments of the country’s 1959 Banking Act.

The proposals included preventing banks from changing variable interest rate charges on mortgages above or below changes to the Reserve Bank of Australia’s discount rate and the banning of some ATM fees and mortgage exit fees.