1-2-3: Is the Santander Bubble Deflating or Bursting?

Mike Bamford

In a time when the banking landscape is experiencing seismic changes in order to stay relevant and competitive in terms of customer service, innovation, digital focus and communication, the results from Harris Interactive’s latest customer relationship survey, Customer Power, suggest that banks cannot rest on their laurels when wanting to retain the loyalty of their customers.

Using Harris Interactive’s Customer Relationship Score framework*, which connects both rational and emotional metrics with intentional (future looking) metrics, we can see that as an industry the banking sector has been relatively stable over the past 2 years.


Figure 1: Banking Sector Relationship Scores


*Harris Interactive’s Customer Relationship Score framework consists of the following questions:

  1. Overall satisfaction/dissatisfaction
  2. Likelihood to recommend to a colleague or friend/family member
  3. Value you as a customer
  4. Your relationship is based on trust
  5. Continue to use and/or purchase products or services again
  6. Are your preferred provider/company of choice
  7. Give you something different/unique compared to other providers/companies of their type

However, as you can see from Figure 2 below, the picture is not as stable when examining the banking sector by brands, as some notable changes have occurred in 2016.

Figure 2: Overall Relationship Score by Brand


The main question which people will ask after viewing Figure 2 is: “What is happening to Santander?”

Since it brought its flagship 1-2-3 account to market in March 2012, Santander has fully established itself as one of the key players in the UK current account market.

Then, throughout 2015-16, customers were dealt a double blow when Santander doubled the monthly account fee and slashed the % interest paid to savers. These two ‘business decisions’ might help to keep Santander financially strong, but this is ultimately at the detriment of their customer base.

What our Customer Power survey shows for Santander between April and November is:

  • Brand Advocacy (recommendation) is down 13% points
  • Feeling they are offered unique benefits with their account is down 12% points
  • Feeling that the customer relationship is based on trust is down 10% points
  • Likelihood to continue using is down 10% points
  • Being a preferred provider is down 9% points
  • Overall Satisfaction is down 9% points
  • Feeling valued as a customer is down 7% points

I do not wholeheartedly believe that the double financial blow delivered to customers in 2015-16 can solely explain why some customer relationships with Santander have started to appear to falter, but I believe it is something that will have a pronounced impact on the customer/bank relationship.

One of the major pull factors of taking an account out with them would have been to take advantage of the financial benefits offered, and now for these to have altered quite considerably, the people having benefited will likely be feeling aggrieved and less likely to see the relationship as one built on trust – hence the drop in score here.

I think we need to also acknowledge that Santander set the bar very high in 2012 when they brought the 1-2-3 reward account to market, offering people the chance to earn through everyday bill payments, but now other banks are offering similar benefits, i.e. NatWest Reward Current Account. This, coupled with benefits which might not be deemed as competitive as they once were, could easily explain why people are now starting to not see Santander as unique/different and their ‘preferred provider’.

This demonstrates the need to examine the customer relationship using a multi-layered model of metrics, e.g. satisfaction, recommendation, feelings of trust and value with ‘future metrics’ of offering something unique, preferred supplier and likelihood to continue using and the reasons behind these, if one is to fully understand what is happening in customers’ hearts and minds.


  • Banking
  • Customer Attitudes
  • Harris Interactive
  • Santander