The smartest community bankers are living the good life
Opportunity abounds and the best community banks are taking advantage of it. Competition from the weaker community banks and the large banks is limited at best. The weaker community banks are drowning under the weight of our current regulatory environment which is reducing what little profit margins they had. Many of these banks are now looking for that super secret sales idea that no one else has figured out or thought of. Sadly, many of the ideas they’re falling for are nothing more than repackaged ideas of the past. Here are a few…
- High Interest Free Checking – Not a bad idea, but certainly not unique. Many banks have this type of checking so you’re still going to have to sell it.
- CD Rate Specials – This is the gift that keeps on giving. Without the right approach, you’ll do nothing more than reprice the bank’s liabilities at a higher rate or upset loyal customers by giving “new money” customers the better rates.
- Call Programs – We wrote a blog on this. It’s a good idea if done right. Most bankers do it poorly and in the process upset many customers and demotivate the best employees.
- Cross-Sell/Incentive Programs – Great idea, and if most community banks were able to implement these programs properly, many of them would be living the good life right now. Unfortunately, this is not the case and most miss the mark with badly designed and mismanaged incentive/cross-selling programs that are ignored by their best employees. FYI…we do it right.
This is the opportunity… Very few of your competitors, if any, are taking advantage of the opportunities that are not only knocking but are screaming for attention. Here are a few of the most obvious opportunities you can take advantage of right now.
Opportunity Calling
You can’t blame marketing for this one. Community banks spend a great deal of money and time driving in business. It’s working! Customers are calling your bank every single day. Unfortunately, over 90% of community banks miss and even destroy this opportunity by doing an amazingly poor job of receiving inbound phone calls from potential customers asking for product information. Far too many employees are in an “order-taker” mode or an “I’m too busy texting my BFF to deal with this call” mode. Many just look at the phone as added work and if they actually convince a caller to drop by, it just means more work! The typical mindset is to be nice but not informative and inviting.
Solution: Monitor your phones to hear what your customers hear and add 10% to the bank’s net income by capturing the simple opportunities that call in on a daily basis.
Opportunity Walking
Against popular opinion by some, branch banking isn’t dead yet! In fact, we see a bright future in branch banking for the best community banks. The worst banks, commonly referred to these days as the “typical bank”, look at the branch traffic as transactional. Customers are walking into the branch every day to cash checks, make loan payments, deposit funds, etc. The vast majority of branch employees are putting on a smile, even calling some customers by name and patting themselves on the back for their great service. If that’s all the employee does, then he just let opportunity walk in and then right back out the door. Unfortunately, that’s what you’ll find in most community banks while they high-five each other for giving the best service. The reality is they are doing a disservice to their bank and their customers.
Solution: Track cross-sells not activity. Converting the obvious opportunities walking in to your branch every day will add another 10% to your bottom-line.
Opportunity Sitting
If as much time was spent growing and developing the current customers your community bank already has, as is spent on attracting new customers, you’d soon realize the sheer stupidity of those past sales initiatives. We all want new customers, but too often we forget about and even ignore the customers that are right in front of us. A typical community bank will have 5,000 households for every $100 million in deposits. That same bank will have less than two services per household. The average household has about six banking services. Do the math. The opportunity for dramatic and sustained growth is already in your door.
Solution: A simple and effective “Reason to Call Program” will build customer relationships while uncovering needs and opportunities. This takes your net income and ROA to the next level.
Opportunity Talking
People talk! Unfortunately, the loudest talk usually comes from dissatisfied customers. They tell everyone about their poor banking experience. We hear community bankers tell themselves and others how great their services are but the real judge is your customer base. What are they saying? Are they talking? Your best relationship-banking score is your advocate score. The advocate score is the one that shows which of your customers is talking and referring business your way. If you’re not tracking this, odds are pretty high that they’re not talking and those that are talking are not being thanked and recognized enough and you’ll soon silence their voice.
Solution: How did you hear about us? That’s the question you should be asking every new customer. You need to know which customers are talking about you. Track the talkers and you’ll soon see your bank at the top tier of your market.
Opportunity Lost
We’re just scratching the surface by giving a glimpse of a few of the opportunities that are staring you right in the face. Implement the solutions, manage the processes and track the results of these opportunities and you’ll end the insanity of searching for that magical sales idea that never was. Continue down the road of searching for the latest and greatest idea and you’ll continue to see the same results of lost opportunity. If you want a good place to start, try your phones. It’s a quick, easy fix. Let us know if you want to see how you stack up in your market.
