“That’s what I’m considering right now, and it feels like a no-brainer”
These were the words of a research participant, sharing their decision to switch from their traditional process to an alternative new product.
What is most interesting here is the fact that this new product was not from a Fintech Start-up, but a 300-year-old institution.
Fight or flight (or transition)
Starling and Monzo were the disruptors in mind. Yet here was NatWest competing with the disruptors through a remodelled brand and fresh digital product. Not only that, but it was also on offer for free, vs. monthly fees from its competitors. An easy decision indeed!
In this research session, my participant faced three options:
- Make no change and continue with traditional business banking (limited functionality)
- Switch to an alternative freemium or paid-for provider (Starling or Monzo)
- Transition to Natwest’s new product (greater functionality with a monthly fee of £0.00)
“… it feels like a no-brainer.”
Dodge the meteor
History demonstrates that brands that do not evolve choose the path of extinction. However, here my participant was learning of an institution that had chosen to evolve; to bring a remodelled product to market that could be perceived as heads and shoulders above the up-start competition.
The dinosaurs fight back, but balancing price and functionality in this world of disruption is a difficult game to master.
In research sessions, I often see that the primary decision influencing factor is price, and users are sometimes willing to forsake some function or usability if the price tag is right.
When measuring usability, we look to the qualities of effectiveness (can the user complete their goal), efficiency (how long does it take), and satisfaction (how do they feel).
Satisfaction is subjective, with many influencing factors, and I wonder how significant “free” is when users feel satisfied, or if they choose to spread the word to friends and colleagues. Are some users willing to accept a level of friction in the satisfying knowledge that they’re accessing a service for free – the cost of admission?
“Offering practical value helps makes things contagious,” writes Jonah Berger, the author of Contagious: How to build word of mouth in a digital age. He continues:
What makes things popular? Why do people talk about certain products and ideas more than others?… People like to help others, so if we can show them how our products or ideas will save time or money, they’ll spread the word.
Jonah Berger, Contagious
For this participant, Natwest looked remarkable, standing head and shoulders against competitors due to the functionality on offer for free, i.e., practical value in abundance.
And as Berger says, products and services that offer practical value will advertise themselves.
Allosaurus or Alligator?
How will the disruptors such as Starling and Monzo respond? Do they need to respond? Or do they have sufficient user adoption/reliance on their products and services not to warrant a response? Time will tell.
But there is hope for the dinosaurs, to step outside and watch and listen to customers and users. To push aside legacy and react free of limits and compliance. There is, however, a doubt in my mind; will Natwest’s new digital product be forever free…?
How will you respond? Offering a service for free is rarely a sustainable option, but how else can your product or service offer your user more practical value?