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Bank Roundtables

December 12, 2008 1 comment

Earlier this week, local bloggers/tweeters were invited to Coco’s Cafe, in Mt. Pleasant, for a food tasting event.  This was all setup by Lyn Mettler of Step Ahead Web Strategies.  I’d never heard of Coco’s and had never eaten at a French restaurant.  I must say, the food was great, especially the desserts.  Normally, I feel chocolate and mint are a bad combination, but Coco’s has definitely changed my opinion in that regard.

By inviting local bloggers, I’m sure Lyn hoped that we would blog about our experience.  From what I saw that evening, I’m sure most did.  There were a couple of people that even posted pictures on www.brightkite.com.

This get-together made me think about how banks could do something similar.  Commercial customers are more profitable, on average.  Arranging bank sponsored get-togethers would be beneficial to both the bank and their customers.  Normally, bank customers are invited to events that showcase the bank’s products.  Events that showcase the customers would be a welcome change.

Commercial customers offer a diverse line of products and services.  Getting a group of them together would be a win for them and the bank.  With the economy in the dumps, any way that could help drive new business to commercial customers would be greatly appreciated.

Imagine it, the bank invites restaurants and caterers so that they can provide and showcase their food.  Other companies could give five minute presentations about what they offer. Afterwards, more networking could be done.  The bank would be seen as a partner, not just a money lender.  In this economic crunch, banks need to do everything they can to get more customers on their side.  This would definitely be a step in the right direction.

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Giving Back

Relay For LifeLike other financial institutions, we are also involved in community service. One charity that our employees participate in is the American Cancer Society’sRelay For Life“. This is a special charity to me because my mother was a cancer survivor. I had the pleasure of serving as our team’s captain two years ago and co-captain last year. Unfortunately, I had to relinquish my captain duties this year but I am an active participant on the team.

Over the past few years, First Federal has been successful with raising the most team donations. It looks like we may have that honor again this year. Other teams have asked how we were so successful, especially since we do a majority of our fundraising in just four months. Along with the standard luminaria and track signs, we also have bake sales, hotdog sales, and a car wash. Our largest fundraising event is our silent auction.

For our auction, we call around to local businesses and get donations. Some things we have offered are lunch baskets (gift certificates from local restaurants), spa sessions, golf packages and other baskets that departments and branches put together. What really makes it exciting is we made it into an online auction, a la eBay.

The idea started a couple of years ago when someone suggested that we have a silent auction as a fundraiser. After we all agreed to have it, I suggested that instead of the normal silent auction, we run it through our intranet. I figured that if we “eBay” it, that would drive up the excitement and the bids. As it turns out, it was hilarious watching the bids go up and people trying to time that last bid at the final second before the auction closed.

This was the third year that we had our auction and we were able to raise just over $5000. So, if you happen to have a web developer or two on staff, an online auction could be useful. Also, this lets all of your staff participate. It’s very easy to sign-on to the intranet and bid instead of being limited to just the corporate staff.

If you’d like to contribute to our Relay For Life team, you can donate here, on my participant page. Thanks and good luck with your fundraising events.

Image provided by American Cancer Society

It’s Service, Not Sales

The other day, a co-worker and I were discussing our opinions on the shifting focus onto sales in the banking industry. We both felt that the industry seems to care less and less about servicing the customer. My co-worker, who is a trainer for branch staff, gave me an example from one of her training sessions.

A trainee was lamenting about how annuities sucked. She said they were very difficult to sell because very few customers had that much in an account. The chances of a customer having $10,000 available to open one were miniscule.

My trainer friend asked her what was the first car she got at 16. The trainee looked confused, but answered with something like a late model Honda Civic. My friend then said, asking your typical customer to open an annuity is like you being able to go out and buy a BMW 700 series at age 16.

She went on to say that you can’t expect a DDA customer to pull $10,000 out of thin air. You have to take the time to build a financial relationship with your customers. You always hear that you have to sell sticky products to your customers. Typically, this is direct deposit, online banking, bill pay and e-statements.

After listening to my friend, I no longer feel that these are sticky products. If all you have is a DDA relationship, the customer could easily go across the street to a competitor. Believe me; it’s really not that hard to change your direct deposit and online banking information. If your new bank uses the same bill payer as your current bank, they may even be able to transfer your information over.

My friend told me that her old branch is reaping the rewards from her work years ago. When she sat down with a new customer, she opened the checking account and setup the other “sticky” services. Also, she would talk to them about opening a savings account, even if they didn’t have the minimum amount.

She explained that yes, they would get a $4 monthly fee, but she’d set it up so that each pay period, $25-$100 (whatever the customer was comfortable with) would be deposited into their account. This way, after a couple of months, they would have the minimum balance and begin building an emergency fund.

After 6 months to a year, she would sit down with them again and suggest moving some of the money to a CD so that they could get a better rate. They would still have some money for emergencies, but also be building more wealth. Within a couple of years, she’d refer them to our investment group. During all this, she’d be building a personal relationship with all her customers, plus getting more referrals as they told their friends.

After our conversation, it hit me that a savings account is the stickiest product that we have. It’s also the foundation for building a relationship with our customers. It all starts with servicing the customer and having their best financial interest in mind. As my friend said, it’s a lot easier to sell that $10,000 annuity when you service the customer and help them save that amount to being with.

Not Doing Your Homework Can Hurt, Part 2

Recently, while catching up with the basketball game scores, I saw a commercial about buying a computer. Basically, this company, called BlueHippo, was offering to help those with bad credit obtain a computer. For only $39.99 a week, for 52 weeks, customers could have a new computer with a 17in. monitor, a 3-in-1 printer and about 15 computer applications.

The website’s plan is slightly different. There is an initial fee of $99 and you have to make 6 payments before the system is delivered. This means that you’ve spend $340 before you even get your computer.

Just some quick math, $40 x 52 weeks equals $2080. In case you didn’t know, you can get a new Mac Air for $1800. I always knew rent-to-own was bad, but this is ridiculous. You would come out better by putting that $40/week into an online savings account for 12 weeks. By that time, you’d have more than enough to buy a basic computer system. You won’t have a top of the line system, but then, BlueHippo isn’t offering top of the line anyways.

Categories: BlueHippo, Community, Lending

Promoting Banking

Recently, I had the pleasure of attending the Career Fair at a local elementary school.  Even though I didn’t get the chance to talk about possible careers in the banking industry, I was able to express my enjoyment in my career.  Plus, I got to beat a couple of kids in Tic-Tac-Toe, found on our kid-centric website.  I also discovered that kids will go to great lengths to win a bag of shredded money.

Categories: Community, Other Interests

Diversity And Youth

January 24, 2008 1 comment

Earlier this week, I had the opportunity to attend the Dr. King Business and Professional Breakfast. As usual, this was a wonderful event that was now in its 8th year. Sallie Krawcheck, chairwoman and CEO of Citi Global Wealth Management was the keynote speaker.

In her address, Mrs. Krawcheck drew upon her experience as a female in the white male dominated industry of investment banking. She spoke of her own biases in dealing with other women in the workplace and what she was doing to make improvements. Also, Mrs. Krawcheck mentioned that statistically, the top performing companies with diverse upper management outperformed other top companies that had upper management with a “similar” makeup by a large margin. Being an analyst, she thought the numbers were wrong.

Upon further digging and reflection, she concluded that the numbers were correct. It only makes sense that companies that actually practice diversity be more profitable. Our customers are not made up of a homogenous market. The top decision makers should reflect this, if only to bring in different opinions and experiences.

After Mrs. Krawcheck’s, Jeffery Fielding, a senior from a local high school, gave a reflection on the event. This young man first thanked everyone for their presence, and then called out the local businesses for failing the youth of the community. He pointed out that there was no clear path from school to the work place. Business leaders are in the unique position of providing guidance to our youth, through such avenues as internships, job shadowing and other activities.

Mr. Fielding also noted that the criminal element of our community had no problem with recruiting youth. Surely our business leaders could do a better job. Their action, or lack thereof, would have repercussions in our community. Better that they work with the youth and tap into their talent and skills early than deal with bad outcomes later.

After the standing ovation this young man received, I was left wondering what we could do to both increase diversity and nurture our community youth. For diversity, I feel that this has to come from the corner office and trickle down through the organization. If upper management doesn’t believe it, the rank and file employees won’t either. Not embracing diversity could cause your diverse work force to feel frustrated and leave for a competitor that does appreciate them.

As for the youth, an internship program and job shadowing seem like good avenues to introduce banking. Had I been introduced to banking earlier, I may have joined the industry a lot sooner. This could also make recruiting a lot easier. I believe one reason for the higher turnover in the past few years is the new focus on sales. Bringing in talent earlier could help them learn to be better bankers first, then salespersons.

Regardless of what you do, I believe putting diversity into action is a vital key for success in the financial industry. The question is, what are you personally going to do to keep Dr. King’s dream alive?

 

 

Categories: Community, Diversity

Bank of Citi

November 29, 2007 Leave a comment

Seems that an investment broker recently approached Citibank about the possibility of merging with Bank of America. Obviously Citi’s board rejected this, but it does bring up interesting possibilities. Either that or fears…

Categories: Community, Merger