Guest blog: Tactical use of additional 'value add' to help achieve positive individual member outcomes

Guest blog by Andrew Holden, Managing Director, Parliament Hill. This article was first published in Society Matters magazine.

Andrew HoldenBuilding societies are adept at providing competitive and innovative products and services to help their members save, build financial resilience and have a place to call home.

However, no sustainable business can consistently sit at the top of the best buy list. But as consumers are becoming ever more proficient at comparing rates before they buy, and then switching to the next headline rate as soon as they’re able, the increasingly competitive marketplace brings greater vulnerabilities for societies. 

Increased intermediary involvement in the mortgage market, where customers remortgage as soon as it’s viable, can interrupt the relationship between member and society. In the savings market, the loyal older (and often local) savers, who so often hold the most valuable balances, are gradually being replaced by younger cohorts, with a greater affinity to comparing and switching rather than loyalty. And as interest rates have risen, the value of switching becomes all the more worthwhile for the individual. 

What tactical action can societies take? 

Fair value and the wider Consumer Duty mean tactical rate offers for all may no longer be feasible, meaning new ways of providing member value to savers and borrowers are needed. 

One way to add further value across the board, and to bring about the ability to take tactical action, is through the use of ‘member benefits’. These may include everyday savings for individual members, their families, and even their businesses. It could be discounts on the weekly shop, or trips to the cinema, or buying a car. Or it could be a 24-7 GP helpline, a legal helpline or an IT support helpline. 

Benefits and offers like these can be used (for example through the Parliament Hill ‘savings calculator’) to demonstrate how members can save hundreds of pounds every year. And they can be employed tactically to help achieve numerous outcomes, including attracting new members and increasing engagement, and therefore strengthening relationships, with existing members. 

Benefits can be used to make the case for members who are considering leaving a society, to stay. Any perceived advantages elsewhere can be offset against the savings available within the benefits scheme. It may not always be necessary to make up all of the difference to a better rate elsewhere – we’ve heard of members with a ‘mortgage tolerance’ of £20pm, or others who would only cross the ‘hassle threshold’ of switching for a certain monthly gain. The value available through benefits can help to keep them under that threshold. 

Improved CRM systems are enabling more effective use of data and segmentation. This can help to identify members approaching a point of vulnerability – e.g. product maturity. Promoting valuable benefits at anticipated points of vulnerability, should positively impact their decisions. 

More strategically, in light of the current cost of living crisis, offering benefits such as described, including to the most vulnerable individuals above, could provide additional evidence to support the FCA’s expectation that ‘firms should be stepping up now to support customers in these straitened times’. They also demonstrate fair value in line with the requirements of the Consumer Duty.
 
Overall, this is a natural extension for building societies, an additional step in providing appropriate and relevant support to help their members, along with the opportunity to support wider CSR goals. And further differentiating mutuals from their plc competitors. 

Find out more:

Contact Andrew Holden andrew@parliament-hill.co.uk. Visit Parliament Hill parliament-hill. co.uk/membership-engagement

This article was first published in Society Matters magazine at the end of September 2023

You may also be interested in...

BSA Card
  • BSA.IndustryResponse Industry Response
  • Prudential Regulation

BSA Responds to CP11/25 Retiring the Sourcebook

The BSA strongly supports the retirement of the Sourcebook

BSA Card
  • BSA.PressRelease Press Release
  • Mortgages & Housing

Bank Rate cut to 4.00%

While today’s rate cut is a step in the right direction, it won’t be enough on its own to prevent a generation from remaining renters.

BSA Card
  • BSA.Event Event
  • Prudential Regulation

Advanced treasury risk and balance sheet management

This course has been postponed. Please contact the events team if you're interested in attending a future course. We now offer three tiers of treas...

BSA Card
  • BSA.Event Event
  • Prudential Regulation

Treasury risk and balance sheet management

Due to popular demand, we now offer three tiers of treasury management training for BSA Members, Associates and Non-members. The courses will be repea...

BSA Card
  • BSA.Event Event
  • Prudential Regulation

An introduction to treasury management

Due to popular demand, we now offer three tiers of treasury management training for BSA Members, Associates and Non-members. The courses will be repea...

BSA Card
  • BSA.IndustryResponse Industry Response
  • Prudential Regulation

BSA responds to CP10/25

The BSA responds to the PRA's consultation CP10/25 on managing climate-related risks

BSA Card
  • BSA.Event Event
  • Prudential Regulation

Risk appetite training for credit unions

With increasing regulatory focus on the safety and soundness of Credit Unions, it is crucial that you understand the regulator’s risk appetite expecta...

BSA Card
  • BSA.Event Event
  • Mortgages & Housing

Annual meet-up for mortgage professionals

The 2025 Annual Mortgage Meet-up will be taking place in London on Thursday 25th September. Exploring some of the biggest issues shaping the futu...

BSA Card
  • BSA.PressRelease Press Release
  • Savings

Cash ISA Transfer Performance H1 2025

Collectively, the industry can report that 89 per cent of cash ISA transfers were completed within this timeframe between 1 January 2025 and 30 June 2025.

BSA Card
  • BSA.PressRelease Press Release
  • Mortgages & Housing

Generation Stuck: Majority of 25-44 year old renters thought they would own a home by now

New BSA research finds that a huge proportion of would-be first-time buyers have been unable to fulfil their dream of homeownership in the timeframe t...