At this month's Startup Grind London, Vernon Hill II, founder and chairman of Metro bank, shared his journey and the business wisdom that allowed him to build two banks and build his assets to £1.2 billion.
Customers, clients, and consumers are the lifeblood of any enterprise. The act of selling requires there to be a recipient to buy a product or service for commerce to work. Despite the need for customers to facilitate our economic system there exists a greater body to sell to. In this article Vernon Hill reveals what has allowed him to launch the first UK high street bank in 100 years, and how he turns customers into loyal, brand ambassadors; commonly known as fans.
An Apple a day
"Think about how Apple treats phones," Vernon put simply, "It's all about the [user] experience". Everyone knows a person who absolutely adore Apple products, they recommend them to anyone, to them Apple can do no wrong. These Apple fans are almost evangelical in how they talk about the firm. One of Vernon's pieces of advice was that we should all behave a bit more like Apple, but not in the way you may think.
Apple don't have customers, they have fans. Fans that are rabid for Apple products, fans who have an emotional connection to the company, but most importantly; try to sell Apple products to anyone who'll listen. Having a customer is one thing; when asked about your product they'll shrug and say "it's ok, I guess," but having a fan... that's like having a salesperson that people already like.
Throughout the evening Vernon repeated "fans are the most important thing" and "fans are loyal and bring their friends". Part of the reason that Vernon values loyalty so much is because the "value [in banking] is in core deposits," what this means is that the real value for Metro Bank is the smaller but consistent deposits customers make (such as pay checks, pension, benefits). The lesson here is that in business the customers and clients that consistently use your service are worth more than an inconsistent but high-paying customer.
However Vernon has another ace up his sleeve in his mission to turn customers into fans; he made banking fun.
How to make the conversion
When it came to starting Metro Bank, Vernon "forgot conventional myths about banking" and made it all about the experience for the user. Through small changes that differentiated Metro Bank from other institutions Vernon was able to get his customers to talk excitedly about their banking experience. Vernon and his team "got rid of every stupid bank rule they could find" and implemented policies like:
- Not chaining pens to the counter and tried to "get the number of pens we give away," up
- Make the opening times "convenient for you", making sure that Metro Banks were accessible after normal business hours
- Included Coinstar machines in the branches that were free to use and didn't take a fee, to give customers "another reason to come into a store"
Vernon's "user-experience first" philosophy extends to how Metro Bank is marketed; "I don't advertise rates, I don't advertise prices; I advertise convenience and service," he explained. Similarly the philosophy extends to how users interact with Metro Bank. For example Metro Bank's app allows users to deactivate lost cards, and sub-sequentially reactivate the card through the same app if the card is then found.
Fans aren't just for blowing air
Vernon found that each customer is worth roughly £3000 to the bank so, according to Vernon, "anything to keep customers happy that costs under £3000 is worth it." It's widely known that keeping current customers is far cheaper than sourcing new ones, and Vernon's philosophy is the embodiment of that.
Using Vernon's "simple, not expensive, common sense" approach, you can turn customers into sales sleeper agents who will tell anyone and everyone about your product. Make it simple for customers to interact with your enterprise. Question dogmatic beliefs about how businesses in your field should be run. Make your focus the user experience and get the one thing better for business than customers: Fans.
In part one of the series Vernon Hill shares how to create a powerful business model in just a single sentence, and in part two he talks about why innovation is essential and how to implement innovative strategies in any business.