Resolutions for 2011

As we begin to emerge from the depths of the recession, we should consider what we will do differently in the year ahead to build stronger companies and address the challenges of the banking business head-on. If you are making resolutions for the New Year, consider the following:

 

1.     Spend more time in the field. Recent regulatory changes coupled with intense pressures on earnings and capital challenges have created, for many banks, a high degree of focus on internal operations. In years past, senior retail executives spent a great deal of their time in the field, listening to frontline employees, learning from them, and motivating the workforce. Resolve to attend fewer meetings. Instead, get out of the office and gain a fresh perspective on which products and services are working and not working, how the frontline staff is engaging with customers and how the competitive environment feels on the street corner.

 

2.     Figure out how you really make money – over a longer horizon. Think lifetime customer profitability and segment profitability, not branch P&Ls or product P&Ls. How do you measure customer profitability at your bank today? Does it include “sticky” services? Can you analyze customer profit potential and use it to target your marketing and sales efforts? Resolve to do so!

 

3.     Team up! Reach out to your internal business partners, including wealth management, commercial banking, payments, operations, and the like – and conquer the market together. Success in retail banking increasingly requires more robust internal partnerships and better end-to-end engineering of critical customer experiences.

 

4.     Embrace segmentation – in both strategy and daily execution. Let’s face facts: not everyone wants to bank with you. But what do those individuals who do bank with you have in common? Take a hard look at the attitudes, behaviors and demographics of your most profitable customers. Work to deliver on what these customers value most. And build tactical segments to drive higher profits and better service to targeted customers (applied to things like exception pricing decisions, online marketing offers, and the like).

 

5.     Invest to build better marketing expertise. Mine available data with the goal of creating more constant communications, especially with your best customers today and those customers likely to buy additional services from you. Better customer insights should serve to enable more relevant messaging and proactive customer development strategies. In addition, resolve to view marketing as a strategic function charged with helping to lead the transformation back to a more customer-centric business model.

 

6.     Focus on customers, not product sales. Ask the frontline staff to have a different conversation with the customer – to refrain from talking about a product sale and instead talk about the customer’s own experiences and needs. Place the customer back at the center of the conversation, with the goal of creating better customer loyalty and deeper customer relationships. Balance sales incentives with customer development and service incentives.

 

7.     Create packaged solutions. The financial lives of consumers are complicated – and are growing more so as the economic recovery remains stagnant (at best). Help them by providing them with packages that give them everything that they need in order to address a particular complication or concern. Packages also make the cross-selling process far simpler for the frontline staff and aid in communicating value to the customer.

 

8.     Invest in a personal financial management (PFM) tool (if you have not already done so). PFM has become a retail banking must-have. Whether you create it from scratch or buy it from someone, resolve to replace calculators with more robust tools and solutions for helping customers to manage, track and plan their financial lives.

 

9.     Create a unified delivery channel strategy. Sure, everyone wants to be able to offer the latest alternative technologies to their customers and everyone would love to be able to offload some of the expense associated with traditional branch banking. Nevertheless, it has become clear that alternative channels will not replace more traditional delivery systems in the near future. Work to create a clear picture of how the entire delivery network – branches, ATMs, online, mobile, etc. – is utilized by different segments of the customer base and think about how these channels can best work as a whole to deliver the desired customer experience.  

 

10. Continue to focus on regaining customer trust. Customers who have recently changed from one institution to another due to service issues, fees or other common complaints have not necessarily quite gotten over their dissatisfaction and distrust of the industry simply because they have moved their accounts. Continue to believe you must earn trust every day and through every interaction you have with your customers.

 

As Winston Churchill once said, “A pessimist sees the difficulty in every opportunity; an optimist sees the opportunity in every difficulty.” It’s been a very difficult couple of years. Let’s ring in the New Year with a sense of optimism – and resolve!