Good Morning all,
and welcome to my March Digest, it’s hard to believe we are already at the end of Q1, and 12 months on from the first signs of disruption caused by Covid-19. Despite dealing with the 3rd (and hopefully final) lockdown, there has been lots to be positive about so far in 2021. We hopefully have encouraging signs that operating practices and customer behaviour can start to revert to pre pandemic times. In this edition, I will cover the usual topics of savings, mortgages, network updates and news of how community activity fits in with our Blueprint.
Don’t forget that all previous Growth Series blogs are available here.
Savings
As mentioned previously, savings balances across all channels are expected to grow by over £1bn this year, and we have made a good start. Agency balances are up by £53m, with 85% of agencies seeing a growth. For this growth to continue, it will need to be driven by the twin savings focus areas for 2021 of retain & attract – which is the core agency activity.
I mentioned last month we are focussing on variable rate retention, and there are a number of initiatives under way to help with this. One is developing a membership loyalty programme aimed at providing exclusive products and offers as well as promoting the benefits of being a member of a mutual organisation – this month’s blog provides more insight on this.
Fixed retention in February was again excellent at over 90%, and March so far is 93%. 1st April is a big one – performing this well at retain means we don’t have to pedal quite as hard to attract to achieve your and our growth plans.
On the subject of attract, the main aim of the loyalty range is to ‘give back’, but we have also seen it benefit growth as a by-product - we launched the Loyalty Regular Saver at the end of February and at the time of writing we have opened over 30,000 accounts. Over 8000 opened in agencies, already generating over £3m balances nearly 90% of which was new money– the demand exceeded expectations and led to a very busy period where your teams have risen to the occasion. We have now launched the Loyalty ISA, as the next stage of our plan to reward loyal customers in 2021. I expect this will lead to some product transfer activity, but if we can replicate the success of the regular saver and attract new funds in the form of ISA transfers, I’m sure you’ll see the benefit in your balances.
You are now able to fully participate in OB calling activity to support both your retain and attract activities. Agencies will get the same call opportunities as branches, and the usual cycle is for the first half of the month we provide call lists to focus on attract (recent examples have been contacting those who have benefitted from the raise the floor exercise, and also to encourage customers to top up their 20/21 ISA before the end of the tax year). The second half of the month we switch focus to the upcoming maturity customers. You can of course talk to these customers about attract as well, by bringing funds from elsewhere.
My ask of you and your teams is that they focus on opting customers into marketing calls to increase the opportunities to engage, and that you plan to ensure there is time to complete these calls. Some agencies have already embraced this and are reaping the benefits.
Just a reminder, next week (Thursday 1 April) you will receive your ISA campaign materials.
ISA season is an important part of the seasonal demand for savings and plays a critical role in helping us to achieve our savings inflow targets. A strong ISA season sets us up well for the rest of the year.
The campaign supports one of our key marketing outcomes to help more consumers achieve their individual savings needs. This year we are focusing both on acquiring new customers as well as the opportunity of encouraging customers who already hold ISAs elsewhere to move them to YBS.
We are focusing on our recently won Moneyfacts consumer award – of being the ‘No. 1 High Street Savings Provider’, as a ‘reason to believe’ that YBS is a good place for ISAs, whilst also highlighting the benefits of growing your Cash ISAs in 1 place.
This ISA activity is part of our continued effort to become ‘more than just about rate’ and to lean into our excellent reputation and service as a USP for YBS. Customer focus groups provided insight which influenced the messaging and creative for the campaign.
Mortgages
The big news in the mortgage market this month is our return to the 95% mortgage market via our Accord channel – the first major lender to do so.
Following the most recent budget, there are more positive signs about the economic recovery, and it’s clear the Government are prepared to do ‘whatever it takes’ to support people getting back on their feet. The Government also recognises the importance of the mortgage market to the economy and has announced a number of initiatives which will help borrowers get on the housing ladder. We know a number of our peers are planning to re-enter the market and so, given this, we felt now was the right time to begin offering mortgages at 95% LTV again, allowing us to continue to fulfil our purpose of helping people to own their own homes.
One of the reasons we have been able to lead in this is that we have not had to wait for the government scheme to start mid-April. The Government has done a lot to assist economic recovery, including furlough schemes, stamp duty incentives and business loans. At YBS, our performance in 2020 exceeded our expectations, and so we feel we have the experience, capability and financial strength to enter the high LTV market with our own resources.
This isn’t just a quick grab for market share. It’s aligned to our strategy and purpose that I shared last year as part of our Blueprint. We have a well-defined target market and have tailored our proposition to ensure we lend to the right ‘types’ of customers who genuinely need our help. Initially, we will be limiting these loans to first time buyers. As you may have seen in our annual results message last month, we lent to record numbers of First Time Buyers last year; this wasn’t a coincidence, but a conscious choice as we seek to help those customers most in need. Low deposit mortgage availability has reduced drastically in the last 12 months, and this has given us a real opportunity to live up to our purpose. Launching a 95% LTV product is a continuation of this.
I shared this message with the mortgage brokers amongst you earlier in the month. Hopefully you’ve been able to place some business since.
It is difficult to gauge demand at 95% LTV, as we have not operated in the market for so long. Using Accord will allow us to ‘test the water’ and provides the opportunity and flexibility to react quickly if volumes are higher than expected, with less operational impacts across the business. Once we have some experience in the market, we will look to widen the proposition to more buyer types if possible and include YBS through our Direct Mortgage Team.
This will provide options for those of you who are referral agencies. Due to the changes we have made to our direct mortgage offering, phasing out face to face advice in our branches, we are also looking at the referral process for agencies to ensure it is as smooth as possible for both customers and your teams. The process to contact a local branch to book the appointment is still in place and should be used until further notice.
Network Updates
NPS: Our Society’s Net Promoter Score (NPS) is a measure of whether our customers and brokers like what we do for them and also if they’d recommend us to their family and friends.
We ended 2020 with an on-target performance of +53.
Covid made the last year tough - really tough, and in reality the Society only just achieved this NPS figure and no more. However as a Society, colleagues really pulled together to make sure our customers continued to benefit from a great service. The most consistent factor mentioned by customers and brokers over the past year has been the friendliness, professionalism and knowledge of our colleagues, and we should all be extremely proud.
The 2021 Society NPS target has been set at +55, this represents a two-point increase on our 2020 year end position. This is a stretching and challenging target for us all, but it absolutely fits with our Blueprint and our ambition to consistently improve the experience we provide to our customers, so we’re one of the best savings and mortgage providers in the UK.
In addition, and separate to the surveys that we do to obtain the Society NPS score, we also measure ‘Transactional NPS’ by contacting customers who have recently engaged with branches and agencies. The target for 2020 was +79, and we achieved this. The target is staying the same in 2021 – because we have done so well on this in the past (agencies 2020 score was a brilliant +85), it could be easy to get blasé and complacent, so my ask is to please obtain both your scores and comments from your DM and discuss with your teams to ensure we ‘reach for better’ and continue to contribute to this key measure.
Marketing
In 2020 we launched the new agency hub to provide a better experience for our agencies; improved navigation and more tools and information to help you. To access the hub, you need to select your agency from the drop down list and enter ybsagencyhub as the password. Under ‘local support’ you’ll find a whole host of information and tools. As lockdown eases, and when you feel the time is right, you can use the downloadable adverts to send to local press or door drops/leaflets with the ability to order print. These are customised with your local agency contact details and there are many templates to choose from, with images you can pick to suit your local market. Your Development Manager would be happy to talk you through and answer any questions that you have.
Branch to Agency Conversions
This weekend sees the agency network grow to 109 as our branches in Wigan & Wallasey become agencies. They are both being taken on by existing proprietors, and I look forward to their contribution to the success of the agency network in the future.
Community
And finally, our strategic Blueprint not only maps out the route for our business growth, but it also highlights our lasting commitment to our local communities, the places where we live and work. I have asked Naomi Hockney, our Community Engagement Manager, to tell you a bit more and how it relates to agencies.
Purposeful Investment in our Communities
The Board have committed investment of over £800K for 2021 to new and existing initiatives in response to the need within our communities, particularly considering the ongoing impact of Covid-19.We’ll keep you updated on progress through Dave’s digest and support colleagues through internal communications channels.
Small Change Big Difference:
Age UK:
I hope you enjoyed this update, if you have any feedback, please feel free to get in touch.
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