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Selling commodities without personally offering bottom-line value causes customers to need you less and less and eventually not at all. “Selling
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Results of January 2006 Retail Banking Survey We appreciate that so many of you invested a few minutes to complete the January 2006 Retail Banking Survey. Below are the results with some commentary. 1. Our Retail Division is responsible to serve businesses with sales sizes of:
Certainly the great number of respondents that do not get involved with business is surprising. More interesting to us is the metric the bank employs to determine where business belongs. With experience in helping more than 125 banks develop and sustain business banking environments, we find one recipe for challenge is to use loan size as a measure of whether the business belongs in retail, business, or commercial banking. We could go on about the many reasons, but suffice it to say that when the metric is driven by products versus clients, optimal success is difficult to achieve. 2. Our Retail Division has licensed bankers to offer:
3. Our Retail Bankers employ the following:
Are you as surprised at the large number of retail bankers not engaged with new customers during the critical first year of this relationship? 4. Our Retail Division employs event-based marketing triggers:
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Trends in Retail Banking 2006: Part Two By:
Julie Ruffolo We’ve received some great comments from SM&H clients and readers from our January 2006 discussion of trends in retail banking. Clearly we can’t cover them all in detail, and our trends focus primarily on sales and sales management issues. There are countless more involving operations, security, brick and mortar, etc., that we won’t even try to comment on. Heck, we can’t even cover all the sales stuff. But here’s a try at a few additional things to think about as 2006 continues to roll along. EBC caused by MIM Event-based conversations are strategies that integrate marketing and sales in a synergistic manner. EBC is designed to employ technology as an enabler combined with targeted, client-focused interactions that lead to the deepening of relationships and create more intense customer loyalty. The concept centers on MIM (money in motion) and SLEs (significant life events) of customers as their financial pictures continue to change. Imagine it’s Monday and the personal banker sits in front of his or her computer. The associate receives an e-mail that a good customer in his or her portfolio has made a deposit 25% above the average balance or has withdrawn 30% of the funds in a money market account. This event (and many others that the bank can customize) triggers a phone call from the banker to the customer to find out what’s new. One community bank calls this process the Customer Check-in. Consider:
ROI of the latest home equity program EBC creates a demand strategy between customer and banker versus the typical product strategy we see when banks do phone call blitzes or call nights to sell any product to anyone at any price. The keys obviously are a robust ERM (Enterprise Relationship Management) system combined with training, job aids, and coaching to be certain these conversations are client-focused. You be the customer and receive a call that says “our computer system has informed me that…” For years marketing has been seeking a method of getting actionable data into the hands of the retail banker immediately. Banks such as Wells Fargo, RBC, Allied Irish Banks, and many other large organizations have embraced this important concept. It’s time all organizations looked into what this approach can do to optimize the customer experience and to maximize revenues. Customer Development: The Next Level of Profiling Most customer profiles are really bank profiles. It’s all about the products the bank wants to sell and not about the customer and what he or she might need. A trend we are seeing is that banks are starting to “get it” and are thinking outside-in to create Client Development Planners. This is an important approach as we see retail banking differently than many organizations. Recent studies have shown that retail customers are less loyal than ever before. Other surveys show that many customers spread their money around with several financial services providers. Organizations such as Merrill (“Total Merrill”) Lynch understand that regular contact with customers showing the greatest opportunity for growth pays big dividends. Also, when done correctly (without always pushing the next product because we have a campaign going) the customer begins to see the value of working with a professional financial services provider and begins to migrate money over to that provider. The Client Development Planner has the look of a profile but it takes into account true customer needs instead of focusing on what products the customer does not have (so I can push them down their throats the next time they come to the bank). This allows the retail banker to take a longer term, relationship focus and helps the banker profile the customer from the outside in. One bank we know takes a Share of Heart approach, which looks at a customer’s hobbies, interests, and passions, in the belief that the more they know about their customers, the more their products become valuable. This works well in tandem with technology that allows queries to be made so the retail banker can actionize the data in the Share of Heart tool. Imagine getting a call from your retail banker because the banker knows you love dogs and they have two tickets to the dog show for you. Think about sorting on all the people named O’Connor so you can potentially (no, you don’t send it to all O’Connors) send a St. Patrick’s Day e-card to them. Clearly data can be interpreted in many ways. Our questions are: does the fact that retail banking customers are less loyal reflect changing buying habits only or is it that banks have taken a transactional view of the retail customer? Is most cross-solving (we don’t like cross-selling) typically done in the first 90 days of a new customer “relationship” because that is what the customer wants or is it because incentives are short-term in nature as well as the way banks reinforce sales? These are interesting questions to ponder, and as you do, think about your approach to profiling. Is it customer-driven or bank-focused? Retail White Paper Tackles Issues in Greater Depth We want to keep Conversation Signposts short and thought provoking so we can’t put every trend we see in retail banking here such as: how advanced, short, learning modules are what our clients are asking for more and more; how channel integration is key to the total retail customer experience; how customer segmentation has caused some banks to use high-level retail bankers as portfolio managers; and how the customer experience, trust-building, and customer engagement have surpassed “service” as the keys to victory in the retail space. We are exploring these issues in depth, however, with 54 selected banks. I am conducting one-on-one interviews (it’s the way we do things at our little company) that last 70-90 minutes. We will not be selling these data nor will we be publishing the total results to the entire banking world. We will only provide the in-depth information from all interviews to those bankers who choose to invest the time with us. Want
to participate? Give me a call. The process is well underway but there
is still time to throw your hat in the ring. I can be reached at |
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By:
Joanne Worden Continuing with our retail banking theme, I’ve been drafted to answer a question our Performance Coaches are frequently asked in the field: How important is it really for me to observe my personal bankers in the branch? I get a lot of pushback on this one. Help me! You have opted to invest some money with a golf coach or tennis pro. You have asked a talented singing teacher to mentor you so you can be the next “American Idol”. You have also asked them not to see you in action. What a ludicrous approach. You would, of course, want these professionals to watch your activities and behaviors. It’s the only way you can ever get a return on your investment. There are many reasons why branch managers are reluctant to observe the banker with the customer present. One reason is very logical: the customer might be uncomfortable and therefore the experience would be less than positive. Others include: the banker would be so nervous that he or she might make a mistake that can cost the bank some money; the manager doesn’t have time; the manager remembers how much he or she disdained being observed and vowed never to do that with his/her own people. Let’s address that last one first. We tend to imprint our beliefs on others, meaning that just because we didn’t like being watched, we take that to mean everyone hates it. We’ll even create scenarios and commentary to bring out that hate when we interact with associates so they too, now disdain observations. As a manager your job is to improve the performance of your people and leadership cannot be expedient. If you are to help your bank, help your people, and ultimately help your customers, observations are vital. Get over yourself. Let’s talk about time. The mistake managers make is feeling they have to sit and watch an entire customer interaction. That is wrong. The manager should simply observe what they plan to coach the banker on. If that is the questioning process, they only have to be with the customer during that portion of the sales conversation. They can make a gracious entrance and exit at the proper times. This approach reduces the observation from 30 or 45 minutes to 12. Finally, from a customer perspective, if this is approached the right way by the personal banker, “My manager would like to sit in with us for a few minutes if that’s ok. She wants to get a sense of how we are executing on the customer experience and she also likes getting to know the customers that come in to the branch. Is that all right with you?” Sure some customers will say “no” but the majority will be totally fine with it. Here are a few other ideas:
Your associates may never play in the Masters or be on stage near Simon. They will only reach their full potential in the sales process, however, if you, the manager are willing to invest time to see them in action. |
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Here is where you will see St. Meyer & Hubbard associates in April and May 2006: April 2006
May 2006
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The second quarter is here. Solutions to goal achievement are here every month. Bankers tell us the tips they find in Conversation Signposts have contributed to some significant wins on behalf of their clients and pre-clients. If someone else at your bank could benefit from Conversation Signposts forward this edition and have them click on the hyperlink below to register: It’s FREE! What’s not to love? http://www.stmeyerandhubbard.com/signup.html
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| Jack Hubbard Chairman 847-717-4328 jhubbard@stmeyerandhubbard.com |
Bob St.
Meyer President 847-717-4322 bstmeyer@stmeyerandhubbard.com |
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