What We Can Learn from Bankers

What We Can Learn from Bankers
Tags: Consumer Behavior, Customer Experience, Marketing, Psychology
July 5, 2010

What We Can Learn From Bankers

There are lessons to be learned from bankers...

...unfortunately, it’s from their failings.

Break the bonds of industry pricing!

Get compensated well for the value you provide.

In fairness to bankers, and you, I have to admit I’ve been a very vocal critic of the banks for decades. Now that I’ve admitted my bias let me share with you why.

There are typically two comments that I hear when talking to bankers:

Money is a commodity.

Our customers don’t value a banking relationship.

Let’s deal with the commodity comment first. My experience has been that there are many commodity products out there, but very few commodity businesses. There are very few things to which we can’t add value through enhancements or service. Those bankers who feel that money is a commodity aren’t seeing those opportunities. If you’re one of those bankers, or you feel that you’re selling a commodity, bring someone in from the outside to help you add value to your offerings. You won’t be able to do it alone.

To those bankers who feel that their customers don’t value relationships I ask “What kind of relationship are you providing?” The reality is that most banks, at least most of the larger banks, have three operating units - the deposit group, the lending group and the wealth advisory group. Typically these are separate operations so that there is little, if any, collaboration among them. There is also little, if any, bundling of the three group’s offerings to tailor the offerings to the customers’ needs.

Finally, the compensation for those who generate sales in each of these areas is based on gaining new deposits, making new loans or managing new investment portfolios. Once the sale is made, the account is transferred to the back office for processing. There is little, if any, reason for the person making the sale to continue visiting the customer. Hence the question “What kind of relationship are you providing?”

It’s counter-intuitive, but organizational structure and compensation programs can enhance or diminish the customer’s experience and your ability to command higher prices for your products and services. If you’re not getting premium prices, determine whether or not you’re using a page from the bankers’ handbook - viewing your offering as a commodity or touting a non-existent relationship as a value proposition.

There are lessons to be learned from bankers...

...unfortunately, it’s from their failings.

In fairness to bankers, and to you, I have to admit I’ve been a very vocal critic of the banks for decades. Now that I’ve admitted my bias let me share with you why.

There are typically two comments that I hear when talking to bankers:

Money is a commodity.
Our customers don’t value a banking relationship.

To those bankers who feel that their customers don’t value relationships I ask “What kind of relationship are you providing?” The reality is that most banks, at least most of the larger banks, have three operating units - the deposit (Treasury) group, the lending group and the wealth advisory group. Typically these are separate operations so that there is little, if any, collaboration among them. There is also little, if any, bundling of the three group’s offerings to tailor the offerings to the customers’ needs.

For more pricing tips visit http://www.pricingforprofitbook.com.