Of Banks, Telcos and Jaundiced Customer Loyalty

By Okey Nwachukwu
The general proposition, often buttressed with classic examples and expert advocacy, is that the repeated patronage of a brand, product or service, is a function of customer loyalty. This is unarguably true in a normal setting, but a thorough look at the causal factors in the Nigerian context will offer a new perspective.

Loyalty, as defined by an economist, is “a deeply held commitment to rebuy or repurchase a preferred product or service in the future despite situational influences or marketing efforts having the potential to cause switching behavior.”

Therefore, loyalty is expected, all things being equal, to elicit recurring patronage until a factor in the mix alters. In that case, the customer backtracks to the point of consideration, from where he juggles applicable options until he reaches the purchase stage again, which may ultimately be the product or service earlier rejected.

In the context of human nature where preferences are constantly changing, being able to maintain those loyalty-inducing factors in the long-term demands considerable social engineering. Even some of the most famous global brands have not attained that perfection. They have kept tweaking.

On average, every Nigerian owns at least two mobile lines from different networks. Some have even more. There are several reasons for owning more than one line, the most common being the need to have a backup when one line fails to deliver a requirement. This need may be to make a call, send SMS, access the internet and the whole gamut of telecommunication services.

A similar scenario exists in the banking sector where people own several accounts with different banks. Expediency, fraud and dissatisfaction, among others, often underline the ownership of many accounts. We shall return to this in a bit.

A closer examination of why millions of Nigerians stick with a telco or bank will show that it is not due to customer satisfaction, which naturally engenders loyalty. They are simply stuck. In the case of mobile lines, millions of people, having become associated with specific numbers, have no choice but to stick with the number, often the individual’s first line. Instead of abandoning it, they acquire other lines. This is common among men, while women frequently change or abandon numbers as many times as they become disenchanted or misplace the phone.

I have personally been using a line since September 2001, bought shortly after Econet and MTN launched in Nigeria. The purchase was facilitated by the company I was working for then, and most of the pioneer employees of that organization still use their numbers even today. I hardly avail anyone of my other numbers, despite my dissatisfaction with the first line. This is not the outcome of loyalty, it is just being trapped.

The huge subscriber base and profit margins proudly flaunted every year by banks and telcos as indicative of success cannot be traced to quality of service or operational efficiency, which propels customer satisfaction and loyalty. It is the result of limited choices and/or frustration traceable to Nigeria’s debilitating operating environment.

Apart from MTN, despite its bohemian arrogance, the other networks seem to have completely forgotten the essence of customer satisfaction. The ‘NEPA’ or ‘government’ mindset has become entrenched in their marketing templates so much so that they operate as if they are doing the customer a favour rather than offering a service that is paid for. They seem so satisfied with the existing jaundiced loyalty to the extent that creativity and innovation have become defunct marketing imperatives. What they do now is essentially exploit gaps in regulation and a stifling environment, while offering ‘buy one and get one free’ as marketing and branding stunts.

The banking and telecoms sectors in Nigeria are famous or perhaps infamous for brandishing figures as part of credential parade to hoodwink new customers or reassure other stakeholders. Of course, it is a global practice for quoted companies to publish their financial statements, but the intention is not necessarily to delude customers as is the case in Nigeria. It is a way of informing shareholders of the health of their company.

For the telcos, flaunting the subscriber base is a way of reinforcing market ranking although there are only four of them. There is no authoritative survey yet that indicates that the growing subscriber base can be tracked to efficient service delivery. Vulnerability of the customer will be a major factor. For the banks, a huge profit declaration is indicative of sound health and a reason to bank with them. Can anyone attribute these profit margins to clean business? No. It made the headlines recently that the son of a former governor and current senator, who himself is the speaker of their state’s house of assembly, had hundreds of bank accounts, many of them with a single bank. Does it need a soothsayer to know that these accounts are for dubious purposes, especially for someone not associated with any business apart from holding a political office? Can the banks feign innocence of the malfeasance?

Some of the profits being announced by players in these sectors are nothing more than proceeds of fraud as they are largely contrived charges unconnected to actual service delivery. Unethical indulgence is now a norm in these sectors and more. Regulators often turn a blind eye or give them a slap on the wrist.

Client acquisition and retention has gone beyond positioning at the ‘buy’ point to offer needless incentives. Instead, it entails scanning the entire decision-making process and offering appropriate motivation or drivers that would nudge the customer towards patronage.

Ultimately, it will be nice to see customers in Nigeria who stick with a brand on the strength of satisfaction derived from its products and services. That will only happen when the customer is placed at the top of the pyramid, not elsewhere.