Many find Sterling Bank’s aggressive marketing tactics exciting but only 29.4% will be swayed to become customers
The Issue
An online altercation in July 2018 was what showed many observers the character and disposition of Sterling Bank and established its brand personality among its peers. That was when it released an ad that many saw as a jab at its competitors in the banking industry thereby stirring up conversations on the proprietary nature or otherwise of its marketing approach.
Though it ended with an apology mandated by the nation’s central bank, Sterling Bank used that occasion to create a pathway in the minds of people and introduce itself as a fearless provocateur. It has over the years toed the same line and won the admiration of observers — mostly young people — who admire the idea of a banking sector maverick.
With gross earning numbers of N160 billion in 2020 Q3, a figure that is significantly less compared to GTBank’s 2020 Q3 Profit numbers which stands at N228.23 billion, Sterling Bank’s offensive marketing continues to draw the ire of some while attracting praise, adulation, and mindshare from many others. The bank’s brand personality has never been in doubt considering its tone and propensity to rock the boat, what remains to be seen, however, is the overall impact of this disposition on its stakeholders and ultimately, its financial bottom-line in the near to medium term.
In this case, the offensive approach to marketing is characterised by a desire to be innovative, assume market leadership, and respond to competitive moves with counterattacks. These strategies are designed to obtain an objective, usually market share, from a target competitor. In addition to market share, an offensive strategy could be designed to obtain key customers, high margin market segments, media mentions or high loyalty market segments.
An early example comes from business magnate, Richard Branson. The year 2000 saw the unveiling of the London Eye, which was sponsored by the British Airways. However, there was a technical problem and the wheel couldn’t be erected. Virgin soon took advantage of this incident and decided to fly a blimp over the site with the slogan ‘BA Can’t Get it Up’.
This stunt embodies the very idea of brand warfare and shows how companies can capitalise on the failures or embarrassments of others.
The Question
Sterling Bank CEO, Abubakar Suleiman, who resumed in April 2018 set out the bank’s mid-term objectives (2017 – 2021), which include to grow its market share, diversify funding base, reduce non-performing loans and increase return on average equity. These objectives are hinged on Agility, Business Specialization and Digitization of its operational model. It also adopted the HEART initiative, an acronym for Health, Education, Agriculture, Renewable Energy and Transportation, which is a huge departure from the ‘One customer bank’ mantra.
In 2019, a study ranked Sterling Bank as the third best retail banking institution in Nigeria in its 2019 Nigeria Banking Industry Customer Experience Survey. In terms of the most improved bank based on profitability growth year-on-year, the bank recorded significant profit increases with 17.2%, including FCMB and UBA with 13.2%, and 13.3% respectively.
In 2020, the bank was also ranked among the top three banks in good customer experience in the Small and Medium Enterprises (SME) segment. But tracking the public information of listed banks on the Nigerian Stock Exchange, all the banks recorded customer deposits growth higher than 20% in 2020 with the exemption of Jaiz Bank and Sterling Bank which grew by 7.2% and 6.5% respectively. For Return on Assets, which takes into account the bank’s usage of customer’s deposits, the best five banks are Guaranty Trust Bank: 4.6%, Stanbic IBTC Holdings: 3.8%, Zenith Bank: 3.1%, UBA: 1.7% and Jaiz Bank: 1.5%.
Evidently, the bank’s approach has created a perception that it is pushing above its weight. But how do customers feel about such an aggressive strategy, and does it encourage them to become Sterling Bank customers – which is the purpose of the risky but audacious strategy.
If Sterling Bank can truly put its money where its mouth is remains arguable. For instance, how many times for the horrible ATM services, internet transfer issues or customer services. Because most people do not take the bank seriously yet, the bank can appear fun and exciting. The conversations will become serious when it has bigger customers who are willing to jump on Twitter anytime there’s an issue.
What The Streets Are Saying
In 2019, a study ranked Sterling Bank as the third best retail banking institution in Nigeria in its 2019 Nigeria Banking Industry Customer Experience Survey. In terms of the most improved bank based on profitability growth year-on-year, the bank recorded significant profit increases with 17.2%, including FCMB and UBA with 13.2%, and 13.3% respectively.
Asked if they are aware of Sterling Bank’s aggressive marketing tactics on social media, 55% said ‘yes’ while 45% said ‘no’. Covering several options, we asked our national focus group (NFG) to describe the bank’s aggressive tactics — 31.6% described it as ‘unethical’, 21.1% view it as ‘interesting’, 18.4% described it as ‘mischievous’, while 13.2% found it ‘funny’. 5.3% found it exciting and another 5.3% said it is dirty.
For those who viewed the campaign positively, comments include “It’s awesome”; “So sweet. Drag them by their wigs. We are here for the violence!”; “E sweet. It works”; “I don’t think it is offensive”; “It’s challenging the conservative ‘face-your-front’ marketing communications paradigm in Nigeria. I love it”; “It’s intriguing and innovative to me”; “This is the first time we in advertising can enjoy the competitive marketing that other countries in our industry enjoy. This is fun, let’s just enjoy it”.
Looking at those who viewed it negatively, comments include: “I always thought it was funny, but seeing this tweet screengrab it’s actually not funny. It’s wrong”; “It’s totally unethical. Violates the ethical principles that guide the relationship between the commercial industry (banks)”; “It’s wrong and unprofessional. Once is a mistake; but to then make it the basis of your marketing strategy? It screams insecurity. The exact same thing as what bullies do. They feel threatened by other banks, and they think the only way to ‘one up’ them is to repeatedly attack them, which plays on the internet mentality of ‘savagery’. The internet often applauds these kinds of savage replies, and so Sterling uses it to their advantage”.
Culture Intelligence from RED asked our national focus group if such messaging encourages them to become Sterling Bank customers, 70.6% replied ‘no’ while 29.4% answered in the affirmative. Asked if they would encourage other banks to adopt such methods, 57.5% agreed and 42.5% disagreed.
The latest ‘holding company’ restructuring trend in the Nigerian banking sector, which has led more banks to diversify their revenue base to remain competitive, supports a different kind of ambition for Sterling Bank. According to the bank’s Managing Director, Abubakar Suleiman, the bank does not intend to compete with Fintechs.
“Our end-to-end plan is that we want to significantly leverage technology to become the major financial adviser and lender in specific sectors,” he said in an interview. “We want to be number one for risk underwriting. We want to develop a capacity for risk underwriting at a level that no one can compete with. That’s our intention. I think the role of the bank above all else is to underwrite risks so that capital can flow and the economy will grow.” As a holding company, Sterling Bank channels its focus on wealth creation and the use of technology to improve lending and investment opportunities for customers. So, how does the strategy go with its underlying mission to grow company profit?
“Buzz. Such bold and aggressive marketing moves are intended to create buzz,” said an expert. Consumers want humour, and they want brands to be authentic. In the minds of the target audience, it also positions the brand as a one willing to think and act outside the box, and actually wants to rival your competitors. That Sterling Bank can truly put its money where its mouth is remains arguable. For instance, how many times will customers complain about horrible ATM services, internet transfer issues or customer services before it becomes a problem. Because most people do not take the bank seriously yet, it can appear fun and exciting. The conversations will become serious when it has bigger customers who are willing to jump on Twitter anytime there’s an issue”.
Insights on What The Streets Are Saying are drawn from data collected through in-depth interviews and surveys with our 500-member consumer panel spread across the country, including 100 culture insiders, who are all leading thinkers and doers across media and marketing.
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