Banks are struggling with the concept of relationship building. How do we deepen share of wallet and expand the number of products and services that each client buys from us? That is the first step toward customer retention, increased profitability, and decreased acquisition cost of new customers.
It all makes sense, but how do you do it? I've learned some valuable lessons from service people in New York City. Here's an example:
In returning recently to visit to the city, which I left roughly a year and a half ago, I went to one of my favorite restaurants, a steak house, without having made reservations. To my great surprise, the manager remembered my face. Before I knew it, there were hugs and kisses and a great bottle of wine on the table to boot. During the meal I had conversations with the waiter- one of the most professional I have ever met-about the restaurant, his native Croatia, and basketball. This was not just a dining delight; it was turned into a veritable homecoming.
Surprisingly, it is hard to get this service and recognition outside New York. It's a thorough pleasure to come back and feel that I'm among friends.
At the hotel where I stayed, there is a great jewelry store. It is far too expensive for me, but two years ago my daughter and I dropped by and in a couple of minutes bought a nice pair of cuff links, which I still cherish. This time, I dared to stick my head into the store to see what else they had. As I walked in, a saleswoman turned around and said, "Well, hello there. How do you like the cuff links and how is your daughter?" You could have knocked me over with a feather. How did she remember? I had been there just once and made only one purchase.
This is what relationship building is all about. A friend often mentions the jewelry saleswoman who remembers his anniversary. The woman at the hotel jewelry store remembered, followed up, and got another sale. She's committed to maintaining the relationship and making it a valuable and pleasant experience for me.
Banks have a lot to learn from these types of businesspeople. It takes a professional to make a client feel at home, to make them do something they didn't plan on doing-namely buy something. Bankers are good at making friends with the clients who are already in the fold, but they're not as good in identifying the potential "A" customers of the future and making sure they return.
There are plenty of restaurants in New York, but I know I'll be going back to the steak house even though I like to explore different foods. I just enjoy the atmosphere. There are plenty of jewelry stores in New York, maybe even some that would give me a better deal than the saleswoman at the hotel shop did. But none will make me feel as valued.
That's why people stay with the same bank, the same gas station, or even the same clothing store year in and year out. We as bankers need to learn the skills of the professional salesperson. They involve not merely creating a friendly and trusting atmosphere, but also the ability to identify clients' needs-even ones that are not clearly articulated-explore them, and develop clear solutions.
It is a well-known joke that nobody likes going to the bank, but why is that? Our most-valued clients should enjoy coming to the bank. They should feel like they are making a visit. Those clients whose business we really want should be able to come to a bank and be recognized. They should be greeted with "Oh, your CD is about to mature soon," and with discussions of grandchildren's' financial needs or college plans, etc.
Bankers do not believe that going to the bank should be fun. They believe it's a necessary component of one's life. I'm concerned that we overstate our importance and could get eliminated by other financial institutions that make it more fun for clients to visit. Or, that we will get disintermediated because it will become more fun to use a PC than to come to bank branch.
Our challenge is to build relationships with our clients like those the New York professionals I mentioned have done with me.
