A Fine Line That Makes All The Difference
When a new potential customer comes through your door, visits your website, or has a conversation with one of your employees, how are you engaging with them? Are you thinking about how to maximize value for your company, the highest margin products/services available? Or are you thinking holistically about the long term relationship, and how to deliver the best customer experience and value for the individual?
Financial institutions that take the second approach, that focus on delivering value for the lifetime of that customer, are going to be the most successful over the long term. And those that start the customer relationship with a consultative approach are going to outpace the competition. But how can you start delivering value right away, if you don’t know much about your prospect?
Customer Experience: Not Just Looking For Products
A potential customer can easily comparison shop for the best interest rate, loan terms, or checking account features. The internet has made it easier than ever before for individuals to do their own research without leaving the comfort of their homes. Competing for new business on product features alone is consigning your institution to the noisy, crowded marketplace without much opportunity to stand out.
This is where consultative engagement, from the very beginning of the relationship, becomes a significant competitive differentiator. Taking a partnership approach in the beginning is a great way to set the stage for the kind of value-added relationship today’s customers expect.
Millennials in particular are attuned to the relationship with their FI. In a recent American Banker article, Peter Schaus, president and chief executive of research firm CCG Catalyst says: “Millennials want their banks to advise them. They want advice on how much to save and budget. Banks need to redefine the relationship they have with customers.”[i]
Think of it like this: Customers aren’t just choosing your credit card, your checking account or your mortgage. They are choosing your financial institution and your people to help them meet their financial goals, both now and for the future.
Start On The Right Foot
There are FIs who are working to incorporate consultations with their existing customers. Citizens Financial Group is one example; they began with “Citizens Checkup” initiative in 2016. Bruce Van Saun, the Chairman and CEO of Citizens Financial Group, said in a recent interview with John Maxfield: “The customers who have gone through the program love it. Survey results show that 95% of customers enjoy the experience, and 91% would recommend it to someone else. So I think the program is aligned with knowing your customers, making sure you’re offering suitable products.”[ii]
That commitment to understanding customers and delivering an excellent customer experience is admirable. Ultimately, that kind of consultative engagement should happen from the very beginning of the relationship, rather than after someone is already on the books. That initial discussion is the best way to demonstrate your commitment to individual success.
By implementing a strategic, enterprise-wide approach, you can start your new customer relationships by learning about the individual, their goals and financial aspirations, and how you can help them achieve success as they define it.
Leverage Decisioning Early, Often
The big question: how do FIs start? One key element is to incorporate a nimble, powerful decisioning platform into the core processes of the company. A platform like the one provided by Zoot can help identify the right products and services in real-time as you have the initial consultation.
An FI can begin a conversation with a prospective customer by having that individual answer a specific set of questions. The goal of the initial question/answer interaction would be to begin building a profile about the consumer, their current financial state and their goals. Part of the information gathering can include personally identifiable information (PII) like name, address, and Social Security number.
The FI can then run this through their decisioning platform to find the products (auto loans, credit cards, DDA, personal loans, mortgages, etc.) for which the customer is prequalified. Based on the other goals and aspirations the customer has at the time of account opening, the FI can present the relevant, qualified offer immediately.
If some of the products and services are not appropriate for the immediate interaction (like a mortgage or auto loan), the FI still has valuable business intelligence about the customer and could present those products when they would be more relevant.
Finding And Polishing Diamonds
Using a consultative approach can helps FIs when it comes to potential customers who look less-than-perfect on paper. When FIs take the time to learn about customers and help them succeed, those individuals reward the FI with loyalty and commitment.
Lynette Khalfani-Cox, CEO/Co-founder of AskTheMoneyCoach.com and best-selling author, sums it up nicely when responding to a recent interview question about the best advice she has for financial institutions:
“The customer you might see before you today, with just a little care and attention, can very quickly become a productive financially stable client. You can help that person engineer a financial turnaround. If you’re a part of that success story, the client is “sticky” — they remember the banks and financial institutions that stuck with them from the beginning.”[iii]