There’s nothing like the banks for bringing out the inner malcontent in most of the business people I know.
If it’s not the fact that they are sitting tight on their money and refusing to lend much of it to the ever harder-pressed businesses which are their clients, then it’s their previously lackadaisical attitude to risk that often has the knack of causing involuntarily clenched fists.
The Business Finance Taskforce (BFT) has come up with 17 actions in a call to arms aimed at improving the lamentable state of customer relations, which the British Bankers’ Association chief executive, Angela Knight, says – possibly even with a straight face – demonstrates banks’ “real commitment to helping their business customers”.
Better access to finance, enhanced information and improved understanding for customers all predictably feature on the BFT’s agenda. But I’ve got a groundbreaking yet simple idea for the banks that’s not on the taskforce’s remit and, frankly, should be at the top of their list.
We’ve all heard the marketing spiel from banks about how they want to help us – their esteemed business clients – to grow, prosper, make more money. So my question is this: why on earth don’t they use their client base to help customers do precisely that?
The banks are sitting on a treasure trove of referral potential whose enormous value to all concerned is currently criminally unexploited
Referral potential
It’s startlingly obvious when you think about it: every bank relationship manager handles between 200 and 250 individual business clients, each of which is a potential customer or supplier to the others. The banks, in other words, are sitting on a treasure trove of referral potential whose enormous value to all concerned is currently criminally unexploited.
Any business person will tell you that the majority of their business is gained from referrals, and that’s backed up by Harvard Business School, which claims 98% of businesses rely on referrals to win new business, of which 40% are successful, compared to traditional advertising, which has a response rate of only 0.5 to 1.5%. Harvard adds that only 3% of businesses have a referrals strategy.
Imagine the goodwill that business customers would suddenly start to feel towards their bank if that previously impervious institution began to be proactive, entrepreneurial and even – whisper it – helpful!
And the banks would stand to gain too of course. What every relationship manager strives for – and indeed has targets to achieve – is to persuade business customers to “switch” banks from elsewhere. Of course, switching banks is the last thing on most people’s minds, largely due to in-built inertia and the suspicion that changing your bank is unlikely to prove hassle-free, whatever you’ve been promised.
But who wouldn’t switch to a bank that offered to refer them to other clients or suppliers, both of which would increase profits? A no-brainer if ever there was one.
Of course, banks will probably point to that old chestnut, the Data Protection Act, as a reason not to take this helpful course of action. It’s a red herring though, as I’m willing to bet most businesses would eagerly sign away their basic confidentiality of name, address and phone number for such potentially rich rewards.
So come on banks, let’s see you be proactive and prove that you really are out there fighting for the good of your clients. It might go against the banking culture but times like these are made for breaking the mould.
What have you got to lose? And more importantly, what have you got to gain, both for yourself and your customers…
