Haberfeld Wisdom Published Across the Nation
These big-name consumer brands may operate on a much larger scale than the average neighborhood bank, but one notion remains constant: to achieve growth, they all need a solid mix of products catered to the needs of the majority.
If Amazon entered the banking space, would we all be depositing checks and transferring funds by talking to Alexa? Maybe. Would Amazon achieve long-term growth in this new space by offering just this one shiny, value-added product? The data says no.
Strategic long-term growth stems from the right variety of products, careful execution by the business and creative marketing to drive traffic through the door (or e-door). It’s true for Amazon, it’s true for Uber and it’s true for every local financial institution.
Read the full article in Wisconsin Banker
Over the past several years, the banking industry has seen a steady decline in fee income associated with checking accounts. To offset this shrinking source of income, many financial institutions are doing the obvious – requiring a minimum account balance and assessing various other account fees.
In their attempt to make up for lost income, it seems these community banks and credit unions have forgotten one key insight: consumers do not want to pay for a checking account, and they’re switching banks to avoid monthly charges.
But charging customers more fees isn’t the only way to replace lost fee income, and it’s certainly not the most lucrative. Instead, community financial institutions need to focus on operating at capacity. To do this, they can remove barriers to opening a checking account (think no credit score requirement, only one form of ID needed, etc.) and capitalize on those who value overdraft services. More accounts equals more profitability – and there’s no reason to add increased fees into the equation.
Read the full article in Center Point Magazine (page 17)
At the beginning of 2017, the dollar volume of home equity line of credit (HELOC) originations was at a three-year low. Since then, housing and economic conditions have moved in a favorable direction, and it seems HELOCs are finally ready to make their comeback.
Yes, consumer interest in HELOCs is growing, but that doesn’t mean community financial institutions can forgo a proper HELOC strategy and still achieve results. To be successful, banks and credit unions must focus their attention on three key areas: process, product and promotion. When executed correctly, clear internal processes, compelling loan offerings and strategic targeted marketing can be the gas that ignites growth in loan volume and income.
Read the full article in Illinois Bankers Magazine
Marketing and sales serve independent purposes – but much like peanut butter and jelly or a bat and a glove – they just work better together.
In general, marketing initiatives bring prospects to the business, and then it becomes the employee’s job to make the sale. But at too many community financial institutions, frontline employees do not fully understand the products they’re tasked with selling, and they’re often the last two know about marketing offers. Understandably, this makes it hard for the employee to sell the product.
A financial institution’s front line can close this gap between the marketing and sales processes when management does a few key things – provides them with ongoing product education training, sets clear customer service expectations and holds them accountable for specific acquisition and performance goals. When this happens, employees are in a better position to close sales and, more importantly, customers are more likely to leave happy.
Read the full article in The Financial Brand
Today, many community financial institutions across the country adhere to what could be considered “conventional wisdom.” That is, in order to grow their branch networks and become more profitable, they seek only those perfect, high-dollar customers and use an aggressive fee structure to offset the costs of those customers. This approach may be “conventional,” but it’s certainly out of date and no longer “wise.”
Most community financial institutions know they have the capacity to serve many multiples of new customers. But contrary to traditional thinking, those new customers look exactly like the customers they already have – they live, work, dine and play near the institution’s network of locations. By using an omni-channel marketing strategy (new technology, big data and creative execution), those prospects become customers and the magic happens: doubled customer acquisition and increased profitability.
Read the full article in The Financial Brand
Growing a community financial institution does not boil down to just one factor. It may have a superior product lineup or a dynamic marketing strategy or a contagiously friendly front line – but if it doesn’t have all three (among a collection of others), the institution will likely flatline.
In order to achieve long-term, sustainable growth, a community bank or credit union needs to engage in a coordinated system of activities. At a high level, this activity web includes: well-trained, personable employees; prospecting based on the demographics of current customers; and easy-to-understand, easy-to-sell products. When a financial institution shifts its focus from one singular piece of the puzzle to the way each piece fits within the whole, it can experience real growth.
Read the full article in Wisconsin Bankers
What do a mortician and a community bank have in common?
No, this isn’t a bad joke. And there are actually striking similarities to a mortician’s business model and that of a community financial institution. For one, a significant amount of both morticians and community FIs report that they’re not operating at capacity. Both could offer more services without increasing fixed costs, which would dramatically increase revenue and overall profitability.
So why aren’t these businesses focusing on attracting more customers? We can’t say much for morticians, but we know that many community financial institutions embrace a traditional – and very dated – customer-cost model and flawed business strategies. By replacing those practices with an omni-channel marketing approach, which includes the use of big data and new technology, customer acquisition and profitability increase. Who said retail banking is dead?
Read the full article in Banking Matters