A common mistake many community bankers make (as well as most other businesses) is to compete on price. Most banks don't intentionally set out to do this, but things just seem to go that way over time. There are many problems with this, which you have read about on multiple occasions in this publication, but understanding why that happens and what one can do about it is important.
In general, people go with what they know and how they were trained. Calling officers are no exception to this, so they usually make it a practice to ask customers what they want and then try to match that up to a product or service offered by the bank.
One problem with this approach is that most customers don't understand the bank's products or services in depth, so they rarely know what they want. This can lead customers to ask for something they have either heard someone else is using or leads to a case of asking for less than they really want.
Consider that most customers, if asked, would never have said they wanted a microwave oven, Wii game system or iPod before they knew those products were available. They didn't know you could pop popcorn in 3 minutes without a pan and stove, so they didn't ask for a microwave. They didn't know you could download a bazillion songs onto something the size of a credit card instead of carrying around 800 pounds of CDs, so they didn't ask for an iPod. People only ask for what they know exists, so there is a natural limitation to what they will say when a calling officer asks them what they need.
Don't get us wrong. We aren't saying that calling officers shouldn't ask customers what they want. It still makes good sense to ask their desires (and to position your product and service offerings); but it makes more sense to dig deeper into their behavior to boost sales. In so doing, bankers gain an enhanced understanding into the customer and can then better uncover where unmet needs and new opportunities may surface. While admittedly, giving customers what they want (before they know they can have it) is the ultimate sales goal in banking (and bigger profitability); no one said it would be easy.
To get started, we suggest bankers focus on a few key things as follows:
First, consider how the client uses a given product or service you offer. Then, ask yourself whether the same product could be used by another person or group at that same customer? Could it help the user's company increase profitability or improve them in some other way? Start with your existing product and service suite and brainstorm on ways to make them more valuable to customers.
Next, bankers should examine the customer segments they are doing very well with and brainstorm to seek out ones with similar profiles in order to boost sales. Customers with similarly structured operations will often be interested in products or services that solve similar issues their company is having.
Finally, bankers must take extra time to educate customers how to use some of their products and services (and features and benefits) in order to gain full competitive advantage. Sure, a 2Y CD isn't as complex as an iPod, but throw in a money market account, flex pay options and an online banking solution and you are starting to get there.
As you begin what appears to be one of the most difficult years in decades, taking a different look at things can help maintain profitability and deliver new customers.