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Less for more: FNB and the decline in club member benefits in South Africa

FNB Slow Lounge

I’m a happy customer of FNB. I’ve tried out all the big banks in South Africa, and so far FNB has delivered the best and most innovative products for me, and hasn’t treated me as a necessary evil. Yet. Unlike some banks I’ve been with (I’m looking at you Standard Bank).

I was very pleased when a year or so back I qualified to get access to FNB’s Slow Lounge. For those who don’t know, it’s a business class lounge for domestic flights at several major airports in South Africa. Some FNB customers get free access depending on the type of account they have with the bank.

Not that I fly frequently, mind you. But when I do I like to have access to the Slow Lounge, where you can get something to eat or drink, grab something to read or just sit on a comfy chair while waiting for your flight.

When I first joined, you could get unlimited access to the Slow Lounge. Then in 2011 FNB changed this to a limited number of free visits per month – four during off-peak times, and two during peak times. This didn’t sit so well with me, but since I generally don’t travel that much it didn’t make much of a difference. I also understood why FNB was doing this – its Slow Lounges were popular, and were becoming overcrowded with riffraff account holders (like me), especially during peak times.

However, very recently FNB changed its benefits again. Now not only are your visits limited, but you also need to swipe R5 000.00 per month at retailers to qualify. Now that’s not cool. Most of my spending is online. I seldom go around swiping that much at retailers without good reason. And certainly not every month. It seems an arbitrary amount.

So basically I no longer qualify for this Slow Lounge benefit, even though I have one of the more expensive accounts at FNB.

You’ll see on various forums, like the one linked above, that this change has made quite a few people unhappy. However, I do understand FNB’s position – it’s offering a good product at a good price, and its customers are happy and making use of this benefit! This is unacceptable!

What really irks me is how common this is. Companies in South Africa have a history of doing this – offering great “special” benefits to clients who purchase specific accounts or club memberships, and then slowly whittling these benefits away over time.

Discovery did this with its Vitality benefits, especially the free gym membership at Virgin Active a few years ago. This membership is no longer free, and in fact the minimum number of visits per year to keep this membership recently increased by 50%. Discovery is especially bad – a few years ago it also had a great discount on flights with certain airlines. This used to be on the full ticket price (taxes and levies included), but now is only on the flight ticket price, even though the real costs come in with taxes and levies.  So same benefit, but not quite as great as before.

FNB is not alone here, but it does run a risk. It’s drawn in a lot of new customers with all these extra benefits it’s been offering, but now it risks chasing these same customers away through what can be seen as sneaky reductions in benefits.

Personally, I understand what FNB is struggling with – trying to keep a great benefit available to its best customers, but still offering it in some form to a much, much larger group of customers who were originally promised the access to the same benefit, but who don’t bring in as much cash.

But FNB’s approach has much to be desired. It did not communicate this change in benefit very well, and quite a few people have used the Slow Lounge without knowing that they no longer qualified for the free access.

How FNB could have done this better

FNB – here are some ideas for ways you could have managed this change in benefit without making us all feel done in:

1) Limit the benefit to a number of peak/off-peak hours

Give your customers a number of hours (broken down into peak/off-peak) in the Slow Lounge that they can use per calendar month. This number of hours would increase based on your account type and spending patterns.

So someone who only has a few minutes before a flight can still pop in for a quick cup of coffee, but not use up a full visit as under the current system, while someone who has hours to wait before a flight doesn’t just sit around taking up space.

This would keep the numbers down during all hours of the day, and would be an easy way to incentivise customers. You could, for example, offer extra hours at the Slow Lounge for customers who frequently purchase flights on their FNB accounts, or who frequently purchase forex, or who pay for holidays or accommodation or rental vehicles using their FNB cards. So offering a great benefit to those most likely to use this Slow Lounge (and who would appreciate it the best, too).

If this doesn’t work for you, here’s another option based on the current system:

2) Limited number of visits, increasing based on spending

Give every FNB client who qualified for Slow Lounge access under the old criteria a limited number of Slow Lounge visits per month. Let’s say that this is four visits per month (off-peak or peak). They can increase the number of free visits to the Slow Lounge if they, for example, spend over R5 000.00 at retailers by swiping their card, or by purchasing additional FNB products, or, like the example above, spending on travel-related items on their account.

Again, this is a great way to incentivise your clients to spend more using your accounts while not excluding your existing ones.

FNB, this seems like a missed opportunity. However, there’s still time to go back, give all the qualifying account holders at least some free visits and encourage them to spend more using your accounts to get additional benefits. You’ll make them happy and encourage people to use your accounts.

Thomas Bevan

2 Comments

  1. There is a simple solution to all of this I believe. My wife has an account at Capitec – costs are minimal, service is great and is cheaper (by far) to draw at ATM’s (it’s cheaper for a Capitec account-holder to draw cash at an ABSA ATM than for an ABSA client!) and till-points, internet banking is great and transactions are updated to your account immediately (which can be very annoying at other thievery’s, I mean banks), etc. They also pay interest on their accounts with a positive balance – now there is a novel idea! Other banks used, but, apparently it isn’t cost-effective for them any more. SA Banks are like the Brit’s, and I suppose any bank really, they need closer regulation and a lot more frank scrutiny, and an Ombudsman who is not paid by the banks to police the banks – that seems ridiculous to me!!

    • Interesting. My wife is also looking at moving to Capitec. FNB’s products are just too expensive for her, especially as she doesn’t transact that much. I guess once you take away all the bells and whistles (like Slow Lounge access) you start to realise that actually your account doesn’t offer anything more than one from Capitec.

      Guess I’ll need to rethink whether I stay with FNB.

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