Valuing the Value


Three questions about the changing customer environment

By Chris Lorence

Everyone has advice for community bankers these days. Embrace change, be tech forward or look modern, some say. Offer products and services on the customer’s terms, others advise, or perhaps more obscurely, be one with your customer. Be faster, cheaper, better at (fill in almost any operation or activity here).

One might wonder how we’ve survived as an industry this long. With more than half of community banks operating for more than 100 years, we must be doing something right. Or is our industry truly at a tipping point of transformation?

The customer environment has shifted significantly in the last five years. First, our best customers started asking for more because other financial providers are aggressively courting them. Second, with margins tight, spending for data mining, bolder marketing initiatives and new customer acquisition isn’t always readily available. Third, it’s tougher to differentiate ourselves in a marketplace burgeoning with unfairly advantaged competitors.

The good news is that by keeping a close eye on other industries, smart community bank marketers are leading the way without reinventing the wheel. With all this mind, here are three scenarios and questions to consider.

Scenario: You know your customers by name—even their children’s names! Your extended service hours accommodate their work schedules. You support local causes that are highly visible yet meaningful. Your lending rates are competitive and posted where everyone can see them. Yet, your customers drive cars you didn’t finance, live in houses you don’t hold the mortgage on and use a credit card that doesn’t include your bank’s logo.

Ask yourself: Did you ask for their business or wait to be asked? It’s never a mistake to remind all your customers, even frequently, that you want all their business, not to just hold their checking account. Yes, sometimes you need to say it verbally and not assume they know.

Scenario: You place local newspaper ads promoting your competitive lending rates. You’ve purchased radio spots with created catchy jingles that people recognize and sing along to in the car. Your highway billboards can’t be missed. Yet, you aren’t seeing a big boost in new accounts or lending numbers, at least not enough to justify the marketing costs.

Ask yourself: Is your marketing campaign aimed at the people you want to attract? A smaller campaign with a clearly defined audience will likely bring the results you seek. It’s more important than ever to have your campaign be comprehensive, including visuals and direct-mail messaging that resonate with your target customer.

Scenario: You find yourself competing for business you’ve always thought was never up for grabs. Credit unions, out-of-town banks, Farm Credit System institutions and even online lenders are making it all about the interest rate, and that’s wreaking havoc on your bottom line.

Ask yourself: Are your customers valuing your value? What might appear to be about the interest rate may actually be about convenience, accessibility, terms or becoming more anonymous with their finances. Your customers’ needs may have shifted, so communicating the value of what you’re offering might too.

Chris Lorence ( is ICBA’s executive vice president and chief marketing officer.