Fixing What’s Broken In Bank Product Pitches

There’s a better way to sell pens: Don’t start with the pen.

A classic teaching example for sales hands a shiny new pen to someone with the instruction, “Sell me this pen.” Typically, the student takes the pen and begins to describe it, attempting to use the looks and features of the pen to sell it. The would-be salesperson often struggles to “sell” the pen, because they fail to discover if the person needs a pen to begin with.

This is often how banks sell products and services to their customers. But the search for a solution to this sales dilemma has led to new and advanced ways to sell pens (and everything else) the wrong way.

A better way to sell the pen is to put it in your pocket and, instead, ask the customer questions. The goal is to discover the customer’s needs and help them realize that a pen – the one you happen to have in your pocket – is what will meet their needs.

Artificial intelligence companies and fintech platforms want
banks to pay enormous sums of money to help identify products and services for
customers. Having given away all manner of financial tools, products and
advice, they’re now pursuing bank customers by offering demand and savings
deposits, mortgages and loans. Some of the biggest names in technology are
joining the fray as well: Facebook, Apple, Alphabet’s Google and Uber
Technologies, among others.

Customers aren’t necessarily getting more savvy, but technology is.

A venture capital firm we work with that invests in fintechs
was very clear that most online financial tools are merely marketing devices
used to poach customers and grow assets. Often these tools expose a problem in
a customer’s existing account and offer an immediate remedy if the customer
transfers accounts to them. This isn’t necessarily good for the customer, but can
be devasting to a bank.

Pushing product is difficult; providing solutions is far more rewarding – and efficient.

Recently, we met with a regional bank that has over 80 retail
branches and offers wealth management as part of their service model. They have
only 17 financial advisors to service customers in their home state. They
confessed that of only 27% of their wealth management clients have a retirement
account with the bank.

Only 27%. How is this possible? Is it because they don’t sell
retirement accounts? Or is it because they don’t know their customers? After all,
who doesn’t need a retirement account?

Another bank we work with wondered if they should start
offering business credit cards. They didn’t understand their customers’ needs
well enough to decide what products would address those needs or wants, so they
opted to pitch a credit card offered by a vendor.

One of the industry’s largest digital banks confessed to us they are considering adding a human element to their arsenal, seeing a need for a digital/human hybrid approach. They’ve realized that society is moving to digital, but also recognize there is not enough value in digital alone.

The COVID-19 crisis will accelerate the shift to digital. If
brick and mortar banks are going to survive, and even thrive, they need a
digital component that complements their human element. Throwing money at new
technology that pushes products that customers may or may not want or need will
only lead to costly and disappointing results.

Banks need tools that develop and deepen customer relationships and make it possible to offer real solutions, as opposed to pushing products they hope will increase revenue.

Accenture recently released a study with five key findings about customer expectations. They are:

1. They want integrated propositions addressing core needs.
2. They want a personalized offering.
3. They are willing to share data with providers in return for better advice and more attractive deals.
4. They want better integration across physical and digital channels.
5. Their trust in financial institutions is increasing.

Essentially, customers want personal offerings that serve their core needs and delivered in the medium they choose. Banks that want to grow revenue and increase retention shouldn’t continue to “push the pen.” They should find and offer digital/human hybrid models to help customers self-discover solutions.