BID Daily Newsletter
July 26, 2013

BID Daily Newsletter

July 26, 2013

Looking Closer At Chains

It may seem crazy, but every day some 69mm people in 118 countries eat at McDonald's and 11mm visit a Burger King around the world. Whether they are ordering a Big Mac or a Whopper, it's clear people love eating fast food. Wealthy people in particular have an affinity toward national chains, according to recent research by Spectrem Group, as more than twice as many prefer a national fast food chain over a local one.
Beyond fast food, it turns out wealthy people generally prefer national chains in many things they do. The same research found 79% prefer national department stores; 55% prefer national hardware stores, 59% prefer a national electronics chains and 55% prefer national chain bookstores.
Unfortunately, the study didn't focus on banks, but this is something to think about from a community banker's point of view. After all, even the smallest banks compete daily with large national banks.
Faced with this challenge, it's important for community banks to remember what we do best and to focus on our strengths in all of our customer interactions. It's true that big banks have made efforts to improve customer satisfaction and they have more branches than smaller banks, but it is equally true research shows these large banks continue to disappoint when it comes to personal service.
That's an area where community banks can and do outshine the rest, so take a bow. You may think customers are tired of hearing about the benefits of working with a smaller community bank, but it is a mistake to assume they know how much you have to offer beyond personal attention and service with a smile.
To capture more customers, make sure you promote your small business focus and expertise. Customers and prospects must have a good sense of all offerings and the noise level among competitors is high, so you have to be just as loud. Then, be sure to drive home your ability to make things happen faster and with fewer hassles and you will retain your strong foundation.
Playing up the local angle is also really important. It's one reason American Express's Small Business Saturday campaign has been so successful and serves as a lesson to community bankers that people like to stay local. The more you advertise your strengths, the more you let customers know who you are and the more likely they are to come to you. Once you have them, layer on the exceptional customer service, give these customers direct help to assist them in managing their business and show them you care and you have a customer for life.
Of course to compete effectively, we also have to have the products and services our customers are clamoring for. As we've said before, getting on board with mobile, for example, is critical and one area where community banks can do more. Consider a report late last year from Javelin Strategy & Research that found 30% of community banks still do not offer a single form of mobile banking. You might not think it matters much to your customers, but adoption rates are high and the big banks are pushing this relentlessly so you must have something if you are going to stay in the game over the long haul.
In banking as with other industries, there will always be competition from national chains. That doesn't mean community banks should stop trying to compete, however, because despite the hype of national brands, there's a lot to be said for shopping local and knowing the customer personally. We know it and so do your customers.