Pub. 8 2018-2019 Issue 5

6 O V E R A C E N T U R Y : B U I L D I N G B E T T E R B A N K S - H E L P I N G C O L O R A D A N S R E A L I Z E D R E A M S Relationship Cultures Thrive When Employees Share a Commitment to Customer Care BY TOM HERSHBERGER, PRESIDENT/CEO CROSS FINANCIAL, LINCOLN, NEBRASKA I t is not uncommon to hear bankers talking about new customer acqui- sition and their desire to expand market share. It is clearly one element of a growth strategy. However, too many financial institutions overlook the wealth of business that can be nurtured from within their existing client base. In some institutions, single-service household ratios exceed 40%. If nearly half of your clients have selected you for only one of 12 to 15measurable financial solutions, there isdefinitely roomto improveperformance. Cross Financial routinely collects data from community banks to examine household relationships. The average number of households with only one service typically represents 30% to 45% of the bank’s households. With industry research showing it costs five to seven times more to acquire a new client than to retain and expand relationships with existing clients, every institution has a compelling reason to stop and examine internal relationship opportunities. Once a client has made their first purchase decision, it is logical to leverage that acceptance and initial trust by sug- gesting appropriate financial solutions. If you already know the client, why not deepen that relationship before you spend resources to introduce yourself to a prospect that hasn’t chosen you for any solutions at all?We know from client purchase behavior that the likelihood of new clients to purchase additional products is higher during the first six months of their relationshipwith a finan- cial institution. If clients have a natural tendency to reinforce their first purchase decision with additional products, we should not overlook the power of that opportunity. Three Stages of Relationship Development Client service and relationship develop- ment occurs in three steps. Retention. You can fill a bucket fast- er if it is not leaking. Continually ask yourself… ‘What can I do to make each client experience pleasant and fulfill- ing?’ Differentiating service is the best foundation for retention. Understanding existing customers and anticipating their service needs is very important. In an industry where customers have amyriad of choices, actively offering the ‘next best’ solution helps eliminate the competition. Expand relationships with clients who have chosen you for at least one solution. You’ve worked hard to establish initial product usage. Now you need to optimize the economics of expanding relationships with additional, bene- fit-based solutions for each client. Not broad groups of customers, individual clients with unique and focused objec- tives. After the purchase decision has been made, it is important to connect with the customer to understand their desires, goals and expectations. Attraction of new clients. This step is last because it is the costliest sales process you can implement. That doesn’t mean acquisition is not necessary; it is very important. But in the world of relationship development, acquisition of new relationships must be balanced effectively with other dimensions of the process. Deliver Services That Differentiates You Great service is the launching pad for all relationship growth. Clients need to feel comfortable with your institution before they will trust you for their finan- cial solutions. As youmigrate fromsimply a product purchase to a trusted relation- ship with a client, different dimensions of service will influence their behaviors. Proactivelymanaging the service delivery is critical if you intend to differentiate your institution from the long list of com- petitors available to your clients. Service can be broken into many contributing attributes, such as, trust, knowledge, expertise, advice, respect, and friendliness – all of the elements that help an institution’s service stand out from other providers. Improve your service management by identifying where each dimension of service falls in your mentoring or measurement pro- cess. Knowledge, advice, expertise and friendliness tie directly to behaviors and skill sets possessed by your staff. Trust and respect represent the emotional connections that can be created through a broader and deeper relationship with a client. Each activity and emotional con- nection that helps influence your service delivery, will ultimately, generate how customers “feel” about your institution. Positive feelings are the foundation for long-term relationship loyalty.  If your products, delivery systems and client service aremerely average, ex- isting clientsmay consider your financial solutions a simple commodity anyone can provide. Checking is checking and savings is savings. The strength of your relationship begins with exceptional ser- vice… the kind that provides unexpected connections with the client. Personal, business and community connections between clients and employees help to create social relationships. It’s the same kind of bond that makes Facebook and Twitter successful social connections. Every Client Has Unique Expec- tations One size or procedure does not fit all. Relationships occur at a personal and unique level with each client. Every client has a different level of expectations for the services they receive. Customer satisfac- tion surveys show that bank clients feel accuracy, confidentiality and competitive products are foundational to a quality relationship. Look beyond those basics to create a customer experience that includes unique dimensions directed to each client.