Westpac disappoints instead of delights

A week ago, Westpac decided to take a bigger interest rate bite than everyone expected, with the explanation that it we necessary to “recoup their funding costs”. The other big three banks took a few days to think it over and then variously stuck to the RBA rise (NAB) or split the difference (CBA and ANZ).

The rise effectively means a boon of approximately $230 million per year into Westpac’s coffers and is strangely in line with the $210 million projected hit earnings will take by its recent move to cut bank fees. I am not saying there is a correlation but it is interesting to give with one hand while taking with the other.

More interesting that the actual rate rise was the immediate media leap – that this was going to “destroy” Westpac’s mortgage lending and cause customers to go stampeding for the exits in droves. So far there has been some customer backlash with resignations from its’ Community Consultative Council and their actions continue to be media fodder.

While I think mass customer walkouts are unlikely – the pain of shifting is probably more than the cost to mortgage holders at this point, it may cause prospective customers to take a look at other options. But with the other big three just as inconsistent on rate rises (not so long ago Commonwealth jumped their rates 10 points above the RBA rise), the options are pretty slim.

Most troubling of all to me, was the conflicting brand message that their actions sent.

Westpac is working hard to be the bank for the average person. Bank managers in branches, a decidedly feel good ad campaign and shiny new campaign line – “We’re the bank you can bank on”, are just a few of the visible markers out there of their efforts.

Further to all that is the follow statement in the “about us” section of the Westpac website on their Vision and Values page:

“…Putting the customer at the centre of everything we do will help achieve this goal. We see our fundamental purpose as helping every customer achieve all their financial goals…”

and this is followed by one of their values:

“Delighting customers
Knowing our customers and what matters most to them, being an advocate and creating powerful experiences to earn all our customers’ business.”

Now I am cherry picking a bit here to make my point. But you don’t get to pick and choose which bits of your brand you will honour today, which values you will hold true. It either is or it isn’t. And it should be reflected in everything you do. It only takes one misaligned action to paint that question mark in people’s minds.

So my question to Westpac is this – how is a .45 % rate rise putting the customer at the center of what you do? How does it help them achieve all their financial goals? And does it demonstrate that you know your customers at all? Because I doubt many Westpac customers woke up the morning Westpac announced the rate hike feeling like they did.

Westpac’s CEO, Gail Kelly, feels that they are being true to who they are, she was quoted in an article this morning and sheds a bit more light on what they see to be important:

“In a briefing to investors, Mrs Kelly said Westpac was aiming to win over customers through service and relationship banking rather than just on pricing. She noted that 70% of bank customers valued service over pricing.”

“The pace of mortgage sales had grown and customer satisfaction rates improved over the past year, despite Westpac having one of the highest standard variable mortgage rates in the market, she said.”

I understand that business reality bangs up against the best intentions on a daily basis and sometimes it is extremely inconvenient to honour those intentions. But that’s what makes them values and promises – the fact that you do honour them, even when it’s tough to do so. And doing it even when it’s hard is what makes a strong, authentic, believable brand.

If you don’t then it’s all just more marketing hype designed to seduce, which leaves people cynical, disappointed and wondering what you really stand for. And while it seems that Westpac at least feels their actions were both justified and in alignment with their promises, there are also at least some Westpac customers not feeling they were.

See you next week.

Michel Hogan is a Brand Advocate. Through her work with Brandology here in Australia and in the United States, she helps organisations recognise who they are and align that with what they do and say, to build more authentic and sustainable brands. She also publishes the Brand thought leadership blog – Brand Alignment.