‘Simplicity is divinity’ – is this what is behind the success of First Direct?


I have always been a little mystified by First Direct. Firstly, it is a bank. What is there to get excited about when it comes to banks? I am one of many who unfortunately has become very apathetic towards banks – I just do not care about them. This may surprise many people – but sadly it is true. My apathy means that I cannot even be bothered to leave the bank I have been with since I went to university. I cannot be bothered to leave a bank that has invested absolutely NOTHING in me as a customer in all that time. So why am I not moved do something when I meet friends and colleagues who tell me wonderful things about their own bank – First Direct. Honestly – I find it more difficult to find someone who DOES NOT like First Direct than I do someone who DOES!! It is my apathy towards banking that stops me from moving – maybe once I have finished writing this blog post I will be inspired to do so!! So what is it that makes First Direct so special?

Let’s start with a few First Direct Facts (since its launch in 1989) – I have taken these directly from their website:

  • first direct has 1.16 million customers
  • 950,000 of them use Internet Banking
  • 420,000 customers use SMS message banking. first direct sends around 3.5 million text messages to customers every month
  • first direct employs 3,200 people in 2,700 FTE roles at two sites, in Leeds and Hamilton (near Glasgow)
  • 44% of first direct‘s sales are via e-channels
  • more than 1 in 4 of first direct‘s customers join because of personal recommendation
  • over 89% of customer contact with first direct is electronic
  • first direct handles around 135,000 telephone calls every week
  • first direct takes over 54,000 calls (40%) outside working hours each week (Monday to Friday 08:00 – 18:00)
  • first direct takes over 1,700 calls a day from abroad
  • first direct has been in profit every year since 1995

Compared to their competitors, First Direct have generated a phenomenal level of satisfaction and loyalty with their customer base. In 2011, right in the midst of the financial crisis (caused by banks), First Direct were quoted by Satmetrix as having an NPS (Net Promoter Score) Score of 61% – second only to Apple in the UK !!

Source: Satmetrix industry benchmark reports
Source: Satmetrix industry benchmark reports

This result is no fluke. The UKCSI – an independent customer satisfaction survey produced by The leadership Factor on behalf of the Institute of Customer Service also puts First Direct right at the top of the rankings. The latest results put First Direct third in the overall table behind ASOS and John Lewis. They scored the same as Waitrose and Amazon (http://www.instituteofcustomerservice.com/10560/UK-CustomerSatisfactionIndexUKCSI.html).

At a time when customer perception of the banking industry in the UK was (and still is) at an all time low, nothing has changed as far as the customers of First Direct are concerned. Searching for verbatim comments online, the positive comments from First Direct are amazing – here are a selection:

“I left my high street bank (sponsor of the premier league) when I took a half day off work to go in to the branch and they were closed for staff training. Unbelievable!! This was a long time ago and I went home that night and set up a new account with 1stD at 23:00. Since that time I have had one or two small gripes but the overwhelming experience has been an exemplar of top quality customer service. Some of their products are not brilliantly competitive but so don’t buy them. They don’t spend ages trying to sell me things and calling them is almost always a pleasurable experience. Well done them.”

“They are brilliant – got thoroughly hacked off with HSBC and moved our account to First Direct (on recommendation of a colleague) and they made it as easy as possible for us to do so.”

“First Direct are absolutely fab. I have been with them for around 20 years. It’s so nice to talk to someone friendly on the other end of the phone. They have always helped me if my account has gone overdrawn/got into problems. I have never been kept hanging on or moved from pillar to post. The person who answers the phone generally deals with the problem. Also if you move your account to First Direct you get £100 paid into your account – not a bad incentive!”

“I think First Direct are great. You always get a real person on the phone. And you can say something like “can you move £100 from my joint account to my personal account” and they get what you mean, without having to quote loads of account numbers.”

Yes it is possible to find negative sentiment towards First Direct – no organisation is perfect. However, the overriding feeling is very positive. So just what is it that makes First Direct so special? How have they managed to sustain such positive customer perception when all of their competitors (including their parent bank) have seen customers turn against them? Last week, along with over a hundred other customer experience professionals, I think I found out why.

This is Mark Mullen. Mark is the CEO of First Direct. I was fortunate enough to attend one of the biggest customer experience conferences in Europe – European Customer Experience World (produced by the Focus Group). Mark was the keynote speaker on the first day. If you have not heard him speak, he is pretty cool. Mark delivered his speech without the aid of slides or notes. He had the audience entranced. Mark spoke of many things – from the importance of good customer data, to the significance of the humble telephone for First Direct when it was launched to the current day.

Mark touched on the very reason why First Direct was created, and why it continues to thrive today. He quoted another legendary business leader, Sir Richard Branson’ to highlight the very essence of First Direct:

‘In order to be indispensable, one must first be unique’

When First Direct was launched, it was the only bank of its kind. It was unique. Today, that differentiator is still alive and kicking. Mark said that he is often told that First Direct has lost its ‘innovation mojo’ as so little has changed in its proposition over the years. ‘Why re-invent the light bulb?’ is his response. If you have something that works, and continues to work for your customers, why change it. This is when Mark came up with another very memorable quote:

‘Simplicity is divinity’

There was an audible murmur of agreement in the conference room. Mark believes that it is First Directs commitment to ‘keeping it simple’ that has ensured it remains as successful today as it was at launch. Why try to do things differently when your customers are very happy with the things you do? The challenge for First Direct is to keep doing the things they do as well as possible, continuously improving – if customer satisfaction is at 94% this year, Mark wants them to move it to 94.1% next year. First Direct have not attempted to get greedy – they just want to stay true to their proposition. Keeping things simple and being consistent at doing it certainly makes a lot of sense. It is difficult to do justice to the quality of Mark’s speech. He is the kind of CEO a lot of people would love to work for. Mark recognises the importance of his people, and together, they are committed to keep doing what customers want.

It is almost ironic that the secret to First Directs success appears to be so…..simple. Obviously the execution and leadership required to deliver it is another matter, but at a time when so many big businesses are struggling, re-focussing on the core business and getting it right consistently, would be a very sensible strategy.

Have I convinced myself to switch to First Direct? Not quite…….but many people are making me realise that there is a better way to do banking – so I am getting closer.

Do you bank with First Direct? Have you switched from another bank? What do you think about them – your views would be very gratefully received.