Toward Smarter Growth: Doing More with Existing Customers
If you've heard me speak in recent years, one of the things I consistently point out is the value of organic growth, specifically from existing customers. Doing more business with existing customers is a low cost, high value way of growing your bank. From such an effort, we see growth in several areas. First, an increase in account balances through deposit growth. Next, an expansion of services provided when existing customers take advantage of products and services they haven't used before.
Another important gain here is customers concentrating more business with you. One of the assumptions I want you to operate from is that you never have all of a customer's business. Today's financial services environment practically bombards consumers (and businesses) with offers of all types of services, from many different places. I daresay that other financial entities are doing more marketing to your customers than you are. Unless you are constantly reminding customers about the products and services you offer, they may be tempted to select financial products and services from other sources. Each time this happens, your relationship is weakened.
A key reason you are in such a situation is a failure to look at the whole picture of a customer. Instead, banks tend to focus on the task at hand (I call this being transactionally focused.) The preferred approach is that each time a new or prospective customer walks in the bank, or accesses one of your on-line channels, you should begin profiling them for future services. That young couple opening their first checking account? Think mortgage, car loan, home equity, credit card, and ultimately wealth management. Training your staff to think and act in this manner will greatly increase your chances for broader, stronger relationships with new and existing customers.
The more products and services a customer has with you, the stronger their loyalty should be. This is true even for remote delivery channels like mobile banking, debit cards, and remote deposit capture. I coined the phrase "invisible loyalty" to emphasize that you can still create and nurture loyalty and profitability among customers that mainly use remote delivery channels.
Here are three ideas to help you change staff approaches to customer interactions:
Listening: remind your staff that customer contact is always an opportunity to learn more about that customer's needs, interests, and opportunities. Make sure your employees know the right channels to hand that information off to.
Create a Theme: for a given month, emphasize one aspect of customer contact, such as listening for customer plans or upcoming events that might require a lending situation OR gathering email addresses or cell phone numbers. When you call a local utility, they will often ask for this information as a way of "updating their records" but it's really a ploy to make sure they have current contact information. Customers won't object to your doing the same.
Third, don't forget about your remote channels: While you can't directly engage those customers in conversation, you can analyze their activity and look for patterns that will give you clues to their current financial situation and their needs. Lots of attention these days to data analytics. Here's your chance to leverage data you collect to improve customer service and internal efficiency. When you make a call or send an email to a primarily remote customer suggesting banking products or services they may need, it will come as a welcome surprise to them.
One conflict we always have in the banking world is around "cross selling." Seldom has a term been more misused. Bank employees, because of bad experiences in the retail world, tend to think that customers don't want to be cross sold. But bank customers consistently tell us in surveys that they expect bank employees to tell them about new products and services. Help your employees to understand the difference. Suggesting a bank product or service is not like a certain national pharmacy brand trying to sell you a new credit card or a red foam nose.
As always, I stand ready to assist you in these or other matters. Please write, text, message, call, or send a telegram and I'll be glad to have a discussion with you.
Trent Fleming
901-896-4007
Recent and Upcoming Speaking Engagements
May 2023:
- 5: Tennessee Bankers Association: Tech Conference, Murfreesboro
July 2023:
- 26: Pennsylvania Bankers: Advanced Banking School, Penn State University
August 2023:
- 11: Florida Bankers: Banking School, University of Florida
- 16: Missouri Bankers Association: Directors Symposium, Columbia
