Monday, July 01, 2019

Is It Customer Loyalty That You Seek?

Why are customers loyal to your financial institution? I hear many reasons in strategic planning sessions:

1. Our people. They are loyal to their lender, branch manager, etc.
2. Our service. We have the best service!
3. Our products. We have a really cool checking product.
4. Our location. We're right in town.

Aside from the difficulty in proving each of the above, the underlying assumption is: "loyalty is good". And I ran the math on that assumption in my firm's most recent newsletter. Which hasn't come out yet as I type this. Because it is in editing and review. By a person that is on vacation. So I apologize that the link is to my company's newsletter page and not the specific newsletter.

But let's run with the assumption, "loyalty is good". How do you build it?

Recently, at the Financial Managers' Society FMS Forum, I heard James Kane speak. James is one of the most quoted and profiled authorities on loyalty. He also graduated from Notre Dame. I didn't, but I'm a lifetime Fighting Irish fan. And he grew up in Scranton. As did I. More so than Joe Biden, who claimed to grow up in Scranton but left before he was a teenager. Jimmy (which is what he would've been called if he grew up in Scranton) and I did the full tour until college.

On his website, Kane writes: "Anyone who has heard me speak knows the importance I put on understanding the things people truly care about to find some common connection. The easiest way to do that is to share first. Let people know what you care about and allow them to discover the similarities you may share with them, whether it is interests, hobbies, favorite products, artists, foods, sports teams, places you have been, or places you hope to visit one day." He left a brand palette as follows:

Do your people employ this method to increase customer loyalty? Do they frequently communicate their favorite things and know their most profitable customers' favorite things?

Kane led his speech with the things he likes, has done, or would like to do in rapid fire format. By the time he finished he likely had something in common with 90% of the audience. In fact, I spoke to him afterwards about being from Scranton. As did another audience member.

In keeping with Kane's method, here is my brand palette:

I live in Pennsylvania near Amish country although I am not Amish. It would be too difficult to come and visit you. I am married to my high school sweetheart, also from Scranton. Also Italian-American. Which means we can turn up the volume, and the people in Amish country think we argue frequently. Sorry. Just talking enthusiastically. 

I have two daughters, one out in California and the other in college. The one in CA thinks I recovered from being stupid but the college student still thinks I am. We have a dog that sometimes gets a bit more attention than me and we spend more money on her than me. 

I am more concerned about where a car was made than how people will think of me driving it. I don't like spending money on cars because you are trading a liquid, appreciating asset (cash) for an illiquid, depreciating one. I drive a truck and take a little bit of pleasure pulling up to financial institution clients in a vehicle not typically driven by a consultant. 

I like coffee but I can't tell the difference between good coffee and bad, so I would opt for cheap or free coffee. Where's your break room? Same with wine. Except I wouldn't expect that in your break room. I love this local brewery and winery revolution and when I travel I am always looking for a place to sample the local fare. 

I listen to podcasts on long rides. I can't be too salesy to plug for our podcast but I regularly listen to The Purposeful Banker, ABA Banking Journal Podcast, Dan Carlin's Hardcore History, NPR Up First, Stuff You Missed in History Class, and my favorite... Freakonomics.

Sports: Yankees, Rams, Sixers, Capitals, Union, and Notre Dame football.

So there ya go. Would knowing this about me help us make a better, and longer lasting connection. To have a common bond to build a relationship?

What Jimmy Kane says makes sense. So perhaps this should be part of your bankers' arsenal in developing customer relationships that lead to long term loyalty.

~ Jeff

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