National Australia Bank’s (NAB)
break-up campaign – a promotion it commenced engaging various
social media platforms such as Twitter and YouTube in mid-February
to attract mortgage customers from rival banks – has become a
marketing and commercial hit.
NAB has recorded a “significant
increase” in the number of mortgage customers switching from
Commonwealth Bank of Australia (CBA) and Westpac to NAB’s lower
standard variable home loan rate since the launch of the break-up
campaign – by 43% and 37% respectively, according to NAB’s group
executive, personal banking, Lisa Gray.
Gray said NAB would continue to
offer to pay A$700 ($748.61) in early exit fees if CBA’s and
Westpac’s mortgage customers switch to NAB’s standard variable home
NAB’s other traditional rival,
Australia and New Zealand Banking Group (ANZ) scrapped its mortgage
exit fees in November 2010.
70% rise in new mortgage
customers since February
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NAB’s social media drive has also
helped the bank register a 70% increase in the number of new
mortgage customers since the “break-up”.
“NAB customers are now A$47 per
month better off on an average $300,000 home loan than the
customers of the most expensively priced major bank,” said
Regulatory reform on banking
competition in Australia is one of the primary factors driving
change in the market.
In March, all of the country’s
senior bankers were called before the country’s Senate Economics
Committee in relation to three amendments of the country’s 1959
The proposals included preventing
banks from changing variable interest rate charges on mortgages
above or below the Reserve Bank of Australia’s discount rate, as
well as the banning of some ATM fees and mortgage exit fees.
In light of growing competition,
NAB began to abolish monthly account service fees on most popular
retail banking transaction accounts 22 months ago.
Using social media to
It also slashed fees on several
personal and transaction accounts, enhanced its credit card
offering by making it “fairer” for customers and, by joining the
rediATM alliance with Cuscal, doubled its ATM-network to over 3,100
units in almost two years.
But as banks are facing harsh
restrictions on loans, NAB seized the social media initiative to
differentiate itself from competitors:
On the weekend before Valentine’s
Day, NAB commenced the break-up campaign on Twitter, posting a
tweet that read:
“Sooooo stressed out. Have to make
a tough decision and I know I’ll probably hurt someone’s feelings!
NAB also posted a link to its
YouTube page, which was set up in 2005 and has had 71,852 channels
as well as 238,807 total upload views. It also launched a
The YouTube video showed somebody – NAB – writing a letter to
CBA, ANZ and Westpac, explaining the break-up: “(…)I’ve decided I
need to break up with you. Honestly, it isn’t you…it’s me. I’ve
changed. I’ve moved on. (…)”.