Every time I get in touch with students or retail bankers – whether in Austria, Germany, Africa or Asia – they ask me: how it is possible to sell more products to our customers?
I always answer with questions: Do your customers need a loan? Do they need a mortgage? Do they need a leasing contract?
And the answer is: No! They need a car, a home, a new washing machine and so on.
The truth is that banking products are too unemotional and unsexy to solve the individual problems and meet the particular needs of our customers. On one hand, banks’ core products are interchangeable and customers are more self-confident, knowledgeable and willing to switch banks. On the other hand, margins are at an extremely low level, the regulatory environment is becoming ever more restrictive worldwide and banks are facing increasing competition.
So how do banks react to this development?
In most European countries, banks reduce the number and size of branches, cut staff levels and increase sales targets. But do they focus on customers? They should: banks that manage to build trustful relationships with customers will be the more successful in future. Not the product but service is now the key factor for success. Satisfied customers are willing to repurchase, are less price-sensitive and will tend to recommend their bank.
Last month I trained retail branch managers of a large Pan African bank with branches in 33 countries. When I asked them how they would satisfy their customers’ needs, they answered: “We walk the talk, we go the extra mile and we answer the telephone 24 hours a day.”
The conclusion is that banks don´t have to sell, because satisfied customers will buy. So it is not important what we sell, but how we sell.