The Anatomy of a Treasury Customer
Customer loyalty is the number one challenge for banks today and an issue we've been monitoring closely in MarketScope. Recently, we explored the brutal impact of customer churn on bank profits. A close look at the hard numbers uncovers how difficult it is for banks to gain ground through acquisitions while losing customers out the back door.
This issue is also at the forefront of our webinar, "Competing for Customers: What's at Stake?" In this ongoing series, Financial Publishing Services and Treasury Strategies have teamed up to examine why treasury management services clients sometimes leave their providers. We also provide ideas for how banks must evolve to remain competitive and attract a new breed of customer: the strategic, well-informed corporate practitioner.
Elizabeth St-Onge, Principal with Treasury Strategies, says corporate practitioners play a highly evolved role in today's business world. They are:
- Short-staffed but expected to perform at a more strategic level, where they are accountable for more bottom-line results.
- Required to make high-level purchasing decisions about increasingly complex products and services.
- Wanting more cash management services but not more providers.
The following diagram illustrates today's treasury landscape:
|The Expanding Role of Corporate Treasury
Moving beyond core responsibilities
|Source: Treasury Strategies, Inc.
Admittedly, today's CFOs have unprecedented access to volumes of information to help manage their increased responsibilities. While such access breeds a more empowered bank customer who has more control over purchasing decisions, the volume of information is overwhelming as CFOs attempt to compare solutions and make those decisions.
Jim Dickie of CSO Insights says this complex decisioning and buying landscape has bogged down the sales process. In a recent webcast on optimizing sales leads ("Optimize Leads and Increase Revenue," a February 2007 webcast by CSO Insights and First Research, Inc.), Dickie cited these sales trends:
- More calls required to win business
- Longer buying cycles
- Rising "no" rates
- More decisions by committee in B2B
Marketing to the treasury customer
The volume and irrelevance of mass advertising today also is contributing to the complexity of purchasing decision making. Information overload further commoditizes offerings and promotes customer churn.
But banks that provide on-demand access to relevant information and business intelligence can help their customers along this lengthy and often complex consideration path.
"Banks are replacing outbound customer communications with messages delivered at customer touch points," says Pradeep Amladi, Director of Industry Marketing, Epiphany, in a WebTrends white paper, "Success in the Balance, The Essential Guide to Financial Metrics."
"By communicating relevant offers to customers as they conduct business in person, on the phone or online, banks are in a better position to up-sell, while they have their customers' permission, time and attention," Amladi says.
Chip Bell, consultant and author of several customer experience books, echoes Amladi's sentiments in the same white paper: "Customers are devoted to companies that help them learn and make them smarter. It's very powerful. It says, 'I care about your growth.'"
Through its work with both banks and corporate practitioners, Treasury Strategies has found the banks that are succeeding in this transforming environment are those that have adopted a new sales approach which involves a deep understanding of the treasury industry and of their corporate client's roles, responsibilities, challenges and opportunities.
Sales and the treasury customer
Clearly, given the increased sophistication of today's treasury professionals and their ability to access information, old-school sales pitches are no longer effective.
For example, due to their increased responsibilities, it's more difficult to earn face time with overworked, stressed-out customers who have little or no time to spend weighing the possible value you offer, especially if your ability to meet their unique needs isn't readily apparent.
Furthermore, it's no longer enough for sales professionals to talk about their own firm's products and services in terms of satisfied customers, years in business, etc. Also known as "expected credibility," this type of communication tells only one side of the story: your company's.
Today, sales professionals must deliver "exceptional credibility," meaning they must be able to communicate adequate knowledge about the prospect's company. In other words, sales professionals must do their homework about a prospect's business and make sure they know how the prospect measures success, so they can clearly explain how their bank can help.
Creating Key Moments of Value®:
How to Keep Customers Coming Back
By Jeff Thull, CEO, Prime Resource Group
Banks can no longer differentiate themselves on the basis of unique products, and the resulting lack of clarity can lead to a high rate of customer churn.
Industry reports estimate that banks lose customers at a rate of 12.5% per year, while acquiring new customers costs about five times as much as retaining existing ones. Thus, it is clear that preventing churn is imperative to profitability and growth.
The first step toward preventing customer churn is to examine the reasons why customers leave. While we may hear explanations such as, "We can get a better rate ... " or "Another bank can provide us with ...," the fault lies with us. We will lose customers if we fail to create personal and unique Key Moments of Value®.
Rediscover your customers
We can begin to create value by rediscovering our customers. This may sound simple, but creating value requires that you continually examine customer interactions with your bank. Every written and verbal communication with them is a potential opportunity to deliver or destroy value. In a moment, we can either increase our customers' awareness of our personal value or mishandle the interaction and thereby frustrate customers to the point that they may disregard any value we delivered to them in the past.
The fundamental philosophy of Key Moments of Value focuses on communicating respect for others, protecting our self-esteem and looking out for others' best interests through open and honest conversations, all in the pursuit of delivering value to both the customer and the bank. Furthermore, when interacting with customers, bank representatives must consider three critical choices they make in regard to creating a Key Moment of Value. These choices focus on: 1) Role (how we behave), 2) Attitude (how we think) and 3) Action (what we do).
We learn 70% of our behaviors by watching someone else perform them. For example, when disciplining or teaching their own children, parents may find themselves repeating speeches they heard from their own parents when they were children. In a similar manner, we might be perceived as a critical "parent" when dealing with customers if we react like a well-intentioned parent might respond and over-criticize. Remember, there are positive and negative sides to all role models. If we are perceived negatively, we can destroy all personal value.
Another negative role model we portray could be the "lecturing professor." This is when we try to lecture our customers on the merits of a new product and inadvertently make them feel inferior. Alternatively, we could be perceived as a bullying police officer, reciting rules and regulations, and pointing out to customers that they are not following procedures.
If you want to create Key Moments of Value, ask yourself these questions:
- What role model do I want to emulate that will contribute to delivering personal value?
- Does my attitude reflect my professional responsibilities to the customer?
- What action should I take to enhance the level of value the customer receives?
When people consciously examine how they think, feel and act, they can bring more positive value to a situation where their customers will recognize, measure and often talk about it with others.
Delivering Key Moments of Value requires a shared vision throughout the bank to create customer awareness of value. It is delivered through consistent behaviors founded upon professional competencies, thoughtful responses and mutual respect. To ensure that all interactions measure up to this level of excellence, it needs to be learned and adopted as a standard for all customer and colleague interactions. It's for your benefit and—most importantly—your customer's.
KEY MOMENTS OF VALUE IS A REGISTERED TRADEMARK OF PRIME RESOURCE GROUP.
About the author
Jeff Thull is a leading-edge sales and marketing strategist and valued executive advisor at major companies including Shell Global Solutions, 3M, Microsoft, Intel, Citicorp, IBM and Georgia-Pacific.
He is also the author of the best-selling books Mastering the Complex Sale: How to Compete and Win When the Stakes are High and The Prime Solution: Close the Value Gap, Increase Margins, and Win the Complex Sale. Jeff’s new book, Exceptional Selling: How the Best Connect and Win in High Stakes Sales, is now available.
For more information, please contact: Prime Resource Group, 3655 Plymouth Blvd., Suite 110, Plymouth, MN 55446, [email protected], www.primeresource.com, 1.800.876.0378 or 763.473.7529, Fax: 763.473.0792.