Compared to community-based FIs, large banks generally have more products and services as well as marketing teams who dwarf their smaller competitors. Given this reality, what does a community-based FI need to do to thrive? To grow low-cost deposits, it is essential you follow a disciplined approach: Step One: Your Institution Must Have a Sales and Service Culture Good products are the foundation of a sales and service culture. You cannot ask your teams to sell or consumers to buy inferior products. If you want to know if your institution has good products, ask your customer-facing employees; they can tell you how consumers respond. Equally important is ensuring your team members are well-trained, understand and believe in your products, and consistently execute your service expectations. Step Two: Your Institution Must Be Strategic Large institutions have staffing and marketing budgets that allow them to change offers frequently, products marketed and/or desired prospects. For community-based FIs to compete, they must make data-driven, always-on marketing part of their core growth strategy. Your always-on marketing strategy, supported by your sales and service culture, will drive tangible results even when large banks are in periods of very high offers. Step Three: Your Institution Must Be Aligned Your FI’s training and execution at the branch and through online channels must be aligned with your strategic marketing. Aligning marketing and execution is what reduces the acquisition costs for new core relationships. Without this alignment, your FI is left trying to compete on the offer alone, making it expensive to match those large bank offers previously mentioned. Step Four: Measure, Inspect and Reward! Any strategic initiative needs to be measured. Your core relationship growth strategy should have periodic — quarterly at least — goals. In addition, determine benchmarks to evaluate success. Inspect what you expect in order to ensure your sales and service standards are being consistently executed. Reward success! When your team members are fully aware of where they stand compared to their goals, it is possible to evaluate results and reward successes. Growing core relationships in order to grow low-cost deposits should be of primary importance in any rate environment; however, it is paramount in the current rising rate environment. Ultimately, outperforming your peers by 60bp will be welcomed by your board and celebrated by your management team. When you strategically align your culture, products, and people, competing for core relationships becomes easier, and the $500+ offers from large banks become less effective. David will beat Goliath! Achim Griesel is President, and Dr. Sean Payant is Chief Strategy Officer at Haberfeld, a data-driven consulting firm specializing in core relationships and profitability growth for community financial institutions. Achim can be reached at (402) 323-3793 or achim@haberfeld.com. Sean can be reached at (402) 323-3614 or sean@haberfeld.com. 26 West Virginia Banker
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