From higher savings rates to better savings habits

Case Study

Proposition Development

From higher savings rates to better savings habits

Case Study / Proposition Development

The Challenge

Post Office Money had formed a productive partnership with Bank of Ireland, creating an alternative to the mainstream banks, with a proposition built around savings. However, the savings market remained in a period of historically low interest rates, with little obvious differentiation to drive customer’s choices, leading to a a price-led mindset across the industry. On top of this, new competitors such as Monzo and Starling were starting to enter the market, attracting a large share of younger customers. To ensure their growth continued, Post Office Money needed to find a new way to earn customer decisions that didn’t purely rely on cheap savings rates.

The approach taken

To help colleagues reconnect with what really mattered to their customers, we undertook a four-week, paycheck-to-paycheck online study with people from across a wide array of demographics. We set participants a range of tasks, including setting a savings goal at the start of the month, tracking their spending decisions throughout, and reflecting at the end of the month on why things hadn’t worked out as planned.

Those customers were then invited into an in-person two-day co-creation session with the leadership team, sharing their views on the insight that had been uncovered, and the potential ideas to help them get to the outcomes they wanted.

The insight uncovered

If you ask people what they want from a savings account, they’ll say they want a higher interest rate.

But it turned out, the thing that most people wanted help with was how to become a better saver. After all, there’s no point having a high savings rate if you have no savings in the account.

Building a good savings habit was much more valuable to them than just keeping their money safe. However, they didn’t believe they could do it. As time went on during the month, they lacked or lost the motivation to save. They didn’t know how to behave in a way that would allow them to maintain their willpower.

So in our co-creation workshop, we heard from experts in behaviour change and habit forming – such as an Olympic Gold Medal-winning rower – to share their perspective on what it takes to build strong habits, and inspire new and better ideas.

The answer we developed

We learned that with the right support and by breaking big goals into manageable chunks, people could become the savers they wanted to be. This new understanding of how people behaved informed the design of three brand new savings propositions centred on helping customers build good savings habits.

One of these was a ’12 Week Savings Challenge’, designed to create the motivation and habits to become a better saver, and built on several behavoioural science principles. The challenge had daily goals and nudges, rewards that increased every week, and a social element to share goals progress. If the customer ‘completed’ the challenge, they were rewarded with a higher interest rate.

The impact created

The ’12-week savings challenge’ marketing campaign was four times more effective than any previous campaign that Post Office Money had run. Moreover, the pilot offer was a huge hit with customers, being oversubscribed within 24 hours of launch.

The work had an impact on the organisation as a whole, too, with the direct exposure to real customers’ real lives creating a mindset shift in many of the Executive leaders who attended the session and engaged with the video diaries.

“It was a great experience working with the team at Foundation. They really helped us explore how to move away from vanilla offerings by uncovering what customers really want. This was done in such a creative way, working with customers that we were able to ideate ideas that really will make a difference.

I think my favourite part of the whole process was having our Exec team in the room alongside customers to create new ideas together. It was a valuable, unlocking moment for our senior colleagues. We still talk about it!”

Mary Burnett, Post Office Money