Lloyds identifies 18mn customers as prime growth targets

Lloyds Banking Group has labelled more than 18mn of its customers as prime growth targets and has trained up hundreds of staff to try to sell them extra products and services.

The UK’s largest high street bank has deployed a team of about 830 new and existing staff to target “relationship growth” with 18.7mn of its 27mn customer base, according to people familiar with the plans and an internal presentation seen by the FT.

Lloyds is two years into a strategic overhaul, of which one aim is to “deepen its relationship” with customers. Chief executive Charlie Nunn has set out a target of increasing the average number of products it sells its customers by 5 per cent by the end of 2024. When the strategy was launched, the figure was 2.4.

Under the sales plan, which went live at the end of April, 18.7mn customers have been labelled with a “growth” icon, signifying they are a prime target for “relationship growth”.

Of those, 10.2mn have been labelled “deepen”, meaning they “show propensity to deepen relationship with additional product”. A further 3.4mn fall under a “protect and deepen” category, meaning they have “limited relationship” with the bank but “significant opportunity to deepen” while 5.1mn are categorised as “protect”, meaning they “hold products with us with limited opportunity to deepen relationship”.

The new team of “relationship managers” are equipped with an online “needs capture tool” that gives them access to customer data and allows them fill in more information about their “current situation and potential additional needs now and in the future”.

The tactic is being deployed after Nunn said in an investor update in February that the bank’s goal of using technology to sell new products to its 19mn mobile app customers would not be achievable at scale by 2026. 

Lloyds said that as part of its strategic transformation it was “evolving some of our customer facing teams to enable colleagues to deepen their understanding of our customers’ financial goals, so they are set up to support them now, and in the future”.

Mark Brown, general secretary of BTU, the biggest independent union at Lloyds, said he was concerned that the new team would “come under increasing pressure to sell more products to customers and it could be a slippy slope to the bad old days of mis-selling”.

The UK financial regulator is currently conducting an industry-wide probe into potential mis-selling of car finance. Lloyds subsidiary Black Horse is the UK’s leading provider and the bank has already set aside £450mn to cover potential compensation costs. It has previously paid more than £20bn in remediation costs linked to payment protection insurance mis-selling.

The new sales plan comes after Lloyds reorganised its risk management function in response to an internal review that found that two-thirds of the bank’s executives believed it was a block to “strategic transformation”.

Gary Greenwood, an analyst at Shore Capital, said that retail banks have a history of trying to boost revenues by selling more to existing customers, rather than paying to acquire new ones. “In the past banks have been guilty of milking their existing customers and exploiting them for higher profits.”

However selling more than two products to a single customer is challenging, he added, because it is easy for people to shop around for the best deals.