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How Bankers Create Value For Clients

There are few industries that have become more challenging than banking. Product and service differentiation is tougher than ever, and if you want to compete on something other than rates and fees, then it is up to the banker to create value in the relationship with the client. With information so readily accessible in the internet era, clients frequently know as much about their options as the bankers providing them. Add to that the fact that many financial institutions are providing very similar, if not the same, portfolio of products and services and it is easy to see why many consumers—both commercial and retail—view banks as a commodity. 

How then does a banker compete effectively in today’s market? The answer is that it is entirely about how you interact with the client and far less about what you offer in terms of product or service. Said another way, it is about how you sell that creates value—not what you are selling.

  1. Stop talking about products and services and start talking about client objectives. In my work with financial institutions, I have sat in on many a client meeting where a banker quite eloquently described the banks myriad offerings using vivid expressions and excellent language. The problem was that the client did not care because it had nothing to do with their unique needs and objectives. Beyond simple questioning techniques that are a staple of many bankers, you need to involve the client in the discussion of their objectives—personal and professional, to gain a clear and complete understanding of what they are trying to achieve. To be effective, this must be more of a mutual dialogue than the Q&A session that too often occurs.
  1. Position your products and services as solutions to those objectives. Odds are that while a client may need credit, sweep services, or leasing solutions, they are not thinking about solutions in those terms. More likely, they are wondering if their assets are being used to maximum effectiveness, or if they are being as efficient as possible with their transactions. The banks products and services are means to an end, which is defined by the client. There may be situations in which you need to access the expertise of others in the organization to serve a client, which allows you to demonstrate your ability to bring to bear all the resources your bank has to offer for the benefit of the client.  Position your offerings as the solution to achieve those stated objectives, and you will dramatically increase your odds of earning more of the client’s trust, and in turn business.
  1. Highlight the value of addressing the client’s objectives. While addressing the client’s objectives is an important part of the equation, it is the value of doing so that solidifies the benefit of working with you. The value of your work together can be described as the resultant effect of addressing objectives. Having confidence that my cash is being utilized optimally or that I am protecting my estate for the benefit of my family are examples of the value generated by specific products and services, but they are in terms of the value the client places on them. If you have engaged in a mutual dialogue about the value of addressing objectives this will be a logical next step to cementing the benefits of working with you. 
  1. Remember the greatest value is in the unique relationship with you, the banker. Products and services are as easy to replicate as they have ever been, and competing on rates and fees is a recipe for losing business unless you are the absolute cheapest provider. We are in an age where the banker has the opportunity to become the distinguishing feature of the relationship with a financial institution. This is done by creating value in how you sell versus what you are selling and making sure each of your interactions with clients and potential clients highlights that value.

Bankers who do these things and use their experience and expertise to create value for clients rather than relying on products and services to do so, put themselves in a great position to earn trust, respect, and more business. Whether in a first discussion, or over the course of a relationship, these methods to create value provide a path to differentiation. Focus on the value you create in your relationship with clients instead of the value created by products and services alone and both you and your client’s will reap the benefits.

Reprinted from the Tampa Bay Business Journal (July 27, 2012)