A few days ago a study was released by Kimberly-Clark Professional (the division responsible for commercial, industrial and scientific products). Hygienists with swabs were sent into six different cities across the country, with the goal of testing contamination levels of common things we all touch. The results leave you thinking about using your elbow more or putting on gloves and point out once again, how smart your mom was when she told you to wash your hands before eating. Results of the study pointed to high-levels of contamination on gas pump handles (71% were contaminated); corner mailbox handles (68%); escalator rails (43%), ATM buttons (41%), parking meters (40%), crosswalk buttons (35%) and vending machines (35%). Now that we have grossed you out before breakfast, we switch to something even more concerning - capturing and keeping customers in a competitive banking environment.
In the past, we have offered up many suggestions for community bankers around customer acquisition and retention, but competition is very high, so we do so again here. We recently attended a meeting with a group of bankers. We started by asking for a show of hands, as to who had seen a good loan small business loan pay off and go to a large bank recently. Virtually every hand in the room went up. When we quizzed further, the bankers indicated loans to a small business customers were being refinanced away at rates from 4.25% to 5.00%. We then asked bankers around the room what steps they were taking to protect their best customers. We take those suggestions, plus sprinkle in some of our own, to help you capture and keep your very best customers.
Perhaps the best way to stem the tide and at least get an opportunity to counter aggressive moves by large banks is to stay close to the customer. Now more than ever, it is important to have regularly scheduled visits with your customers. Have a program to see every important customer at least every quarter. There is nothing like a face to face visit to shake out the issues that customer is facing and to help your bank sales teams keep tabs on the ever-changing customer needs and interests. Doing this also assists your bank by surfacing trends that are developing in your marketplace when they are still in nascent stage. That allows you to build a plan of counter attack with your own products and services, before customers begin to move.
Next, continually take the time to visit the branches and online platforms of the largest competitors in your marketplace. See what they are pushing, sectors they seem to be targeting, pricing or bundling schemes they are offering and other intelligence gathering to stay out in front. It takes extra time, but about 1x per month, you should take a deep dive into the competition's customer facing offerings to stay ahead of the curve.
On the back-end of transactions you lose for whatever reason, it is important to have a "swat team" that looks into the factors as to why the client left your bank. Take a survey, keep an open mind, do not get angry about it (as customers will be less open) and think about what you can do better. Here, you also want to track and report on a monthly basis all prepayments your bank saw that were unexpected and where that customer went.
There are many other ways to boost customer acquisition and retention, but these are some of the most effective we have found that are also echoed by other community bankers. Customers are approaching their bank in new and exciting ways, risk is everywhere and technology is rapidly advancing. These and other factors make now a prime time to call on customers to gather information, educate and assist them in making good decisions for their small business.
As for the whole germ thing, who knows - maybe a community bank wanting to be "clean and environmentally friendly" will jump on this and install hand sanitizer near their ATM machines. Given all the pressure to capture and keep customers, this might be an interesting twist worthy of a marketing angle at some level.