Achim Griesel
For community financial institutions, success starts with growth.
In a recent op-ed, The Wall Street Journal opined on the unlikely alignment of Goldman Sachs CEO Lloyd Blankfein and Sen. Elizabeth Warren on the issue of more regulations demanded by the Dodd-Frank Act.
Warren is obviously an advocate for more oversight and regulations. But why would Blankfein, a leader of one of Wall Street’s biggest banks, warm up to the idea of more regulations? It’s because he realizes additional regulations are additional hurdles for smaller competitors to overcome. Blankfein understands one of the benefits of being one of the biggest banks is that there are far more resources to manage the requirements of running a business.
That’s fine for Goldman Sachs and the other too-big-to-fail banks. For the rest of us, there are more pragmatic reasons to put every resource toward growth.
Achieving growth is more than a product play, more than marketing, more than a sales culture and more training. Sustainable growth can only be achieved if your approach is strategic and incorporates all of the above, and a blend of everything that follows.
The right product. A review of several million customer records at community banks and credit unions shows most consumers and businesses start financial relationships with a checking account. It is the key product in achieving primary financial institution (PFI) status. This same data also shows that once a community bank has achieved PFI status, it should have more than five additional product and services per customer. That’s why the PFI is such a critical relationship, and why developing more of them hinges on the right products.
The right policies. With compliance always at the fore, policies can overlook who we really serve – our customers. That’s a big mistake. Policies are often outdated, misplaced or simply not useful and can cost you money. While we must be in compliance, we should also evaluate policies from the customer’s point of view. Examine your policies and ask if they are helping or hurting your bank.
The right process. Your best sales force is your front-line staff. But are they empowered to sell your products? Do they understand your product, policies and sales process? More importantly, do they believe in it? If you can make your sales process simple and logical, and clearly outline expectations, you can transform your bank into a full-time sales machine.
The right training. Unleashing a sales culture starts with training. When you engage customers, you gain their trust. Gain their trust and they’ll take more products. When they take more products, they’ll refer you to their friends. That’s how you generate more revenue for your organization.
The right incentive. Community banks find competitive advantage through products, policies and training. What else is there? Incentives. There are so many options here, from grand prizes to rewarding every new consumer and business with cash or gift incentives. Whether you’re competing with the big banks or other community banks, the right incentive can put your institution in the lead.
Right marketing, right offer, right audience. Your marketing must be more strategic than just occasional campaigns. The right marketing medium, frequency and offer drive the most customers to your branches, including your web branch. Your offer should include product advantages and an incentive. The message should focus on how the customer benefits and be spread across a number of mediums.
Leverage the power of referrals.When customers feel wanted, and are enchanted by how you do business, they’ll spread the love. Maximize the warm fuzzies by measuring referrals and providing tools that incent customers and employees. Don’t forget to cover all channels from traditional branches to online.
Measurement and accountability. What gets measured gets done. For measurement to be meaningful, we need to compare our own benchmarks and comparable benchmarks for new PFI acquisition, same-store sales, PFI relationship profitability, acquisition costs and branch performance.
Mystery shopping and training.This is the key to evaluating how well you execute at the front line. It’s important enough that it should happen all the time, but a successful strategy needs at least an annual in-depth mystery shop of all branches. Once that’s done, you have a foundation for your training plan. Training is essential at all levels and the mystery shop shows where you’re succeeding or falling short. Training allows you to make adjustments from branch to branch. Reinforcing that shows how committed you are to acquiring new customers and becoming more profitable.
The bottom line is, if you are serious about growing your organization – and you should be – you have to think of it as a strategy. Evaluate your potential, and look at both the potential results and the investment.
