I have written a lot in the past several months about all of the competition that traditional banks face today.
In addition to dealing with bad real estate loans and rising FDIC fees, banks are now watching as brokerage and mutual fund firms introduce online bill pay, free checking accounts, and high yield saving accounts.
In an article in the Wall Street Journal last week, several companies offering new banking services were mentioned. TD Ameritrade has introduced online bill pay and ATM rebates, while TIAA-CREF is offering multiple banking services including free checking and high yield savings accounts through its new internet bank, TIAA Direct.
Charles Schwab is also targeting its brokerage clients with no-fee checking accounts and offering FDIC-insured savings accounts through its Charles Schwab Bank.
Fidelity Investments is offering a Fidelity Cash Management Account with many of the same services as the other brokerage companies. The only difference is Fidelity keeps its deposits in traditional banks.
They are also offering free trades to customers with higher levels of deposits.
With all of this competition, community banks have to start marketing their services.
For many banks, success in the past has been credited to location, location, location. But now, with the internet and all of this new competition, banks will have to concentrate on service, service, service!
They’ll need to get aggressive with their marketing and advertising and win the customer over with wonderful customer service.
When was the last time you called your customers on their birthdays or sent them a birthday card? Even my dentist does that. When was the last time you picked up the phone and thanked a customer for his or her business? Have you ever clipped out an article about a local business person from the newspaper and mailed it to them with a hand written note? Or, more likely, was an overdraft notice the last thing your customers received from you?
Last week, my son put in a contract to buy a foreclosed home from Bank of America. One of the requirements was that he had to be pre-approved by their bank. Since there are three Bank of America’s between his work and his apartment, he stopped at one to meet with a customer service rep.
When he was finally able to meet with someone after waiting in line for almost 30 minutes, they took him into an empty office, dialed a 1-800 number, and handed him the phone.
This was his first visit to a Bank of America and it will be his last.
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Neal Reynolds has worked with hundreds of banks and credit unions around the country helping them to grow core deposits and market share without growing their marketing budgets. Contact him at [email protected].
