Despite high levels of customer loyalty, building societies are failing to make mutuality mean something to memebers.
Research from Norwich & Peterborough Building Society throws up the surprising fact that 9 per cent of its customers pop into their branch every day and 53.8 per cent visit their branch at least once a week. Clearly, N&P must be doing something right.
Over half the customers surveyed have been using their local branch for up to nine years, with 28 per cent having been regulars for between 10 and 19 years.
Some 89 per cent said the best thing about their branch is the staff. They are obviously a friendly lot at N&P.
If this pattern it typical of most of the building society industry – and there is no reason to suppose it is not – what is most surprising about this information is that N&P and other mutuals with high customer loyalty do not seem to be making the most of this opportunity to sell their members other products and services.
The banks must be green with envy that N&P's customers are so keen to go into their branches. Bank users have made it plain that they prefer to queue in the rain to withdraw their money than confront one of the offhand staff behind the bank counter.
Having encouraged customers to use cash machines, the banks have begun to realise that if they do not talk to customers over the counter, it is difficult to sell them more profitable financial products.
Clearly, not all N&P's customers want a mortgage even once a year, let alone once a week, so the vast majority of those making regular visits are doing so to pay in money or withdraw cash – not to mention having a chat with staff.
The societies know these customers have savings and a need for a wide range of fin-ancial products, including household buildings and contents insurance, travel and motor insurance, life cover, long-term care insurance, as well as pensions and other savings products.
A mutual is an ideal organisation for providing these products at very competitive prices because it can broke the business around the market and get the cheapest rates possible. It can offer badged products to customers at cost, on a non-profit basis, but charging a small premium to cover administration costs.
Sadly, few of them seem to be much interested in this obvious expression of the benefits of mutuality.
The most obvious example of this failure to make mutuality mean something is the fact that Nationwide, in common with many big mortgage lenders, offers mortgage protection policies which pay off the mortgage in the event that the borrower dies before the end of the term but it is by no means the cheapest in the market.
Term mortgage protection cover of £100,000 for a 30-year-old over 25 years costs £13.40 a month from Nationwide. The same cover from market leader Equitable Life (still just a mutual) is only £11.46 a month or £11.15 from Marks & Spencer and £8.15 from Tesco, both of which have to make profits for shareholders.
Why don't N&P and other mutuals exploit this very potent demonstration of customer loyalty?
Why stop at financial services? What about turning one corner of the building society branch into an internet cafe where customers could, for a small fee, familiarise themselves with the benefits of internet access as well as keep in touch with friends and family via email?
You only have to go past EasyEverything's internet cafes to see there is huge demand for this type of service.
The mutuals could use their clout to negotiate a raft of special deals with everything from computer manufacturers, TV, video and mob-ile phone companies to household goods manufacturers, offering their goods for sale at highly competitive prices viaa dedicated internet site.
The benefits to customers would be considerable, while providing the company with extra sources of revenue.
Mutuality could really mean something.