By Paul Reilly
Banking is a value-added industry—it always has been. As other industries are scrambling with technology to build stronger relationships with their customers, banks have always recognized that the best competitive strategy is to build lasting personal relationships with their customers.
Maybe it has something to do with the generic nature of the banking industry. How much more of a commodity can you get than money? Money is the commodity product among commodity products. I once heard someone define commodity as a product differentiated only by its price. How significantly can one bank differentiate their financial products from other banks’ financial products? Can one checking account look appreciably different from another bank’s checking account? Maybe, but probably not.
In value-added organizations, people are the single unique dimension of value because there’s no commodity in creativity and no traffic jam on the extra mile. I can design a product that looks a lot like a competitor’s product and wrap it in a bundle of services that mirror my competitor’s services, but I cannot duplicate their people.
As marketers seek ways to promote brand loyalty, those involved in professional selling realize that the brand that inspires true loyalty is Brand-U. Imagine working for a bank where customers prefer your products, like your holding company, and feel strong loyalty for the people with whom they do business.
If rate were the only thing that mattered in banking, there would be only one bank to serve customers—the cheapest one. Consumers are cautious with their money, but trust is the currency of all great relationships. When two people like each other, trust each other, and want to do business, they will work out the details.
Selling is relationship management. It’s important that bankers understand the value-added selling process; it’s imperative that bankers understand their customer’s unique financial needs so they can prescribe the right solution.
Treating customers as account numbers is a sure-fire way to lose customers. The first step in relationship management is understanding your customers. Ask questions. Listen. Spend time with them. Look for ways to add value to the relationship. Know their needs, wants, and fears. Fewer than one-in-four salespeople have a detailed strategy for working with their number one customer. Do you have a detailed strategy for adding value to your primary customer relationships? So, as other industries invest heavily in technology for customer relationship management, they could learn an important and cost-effective lesson from the banking industry: Focus on the customer and add value with your people. Customers have a plethora of choices for where they can deposit their money. The bank that manages the relationship the best will earn and deserve the business.