Given that it is the start of the year, it is a common practice in banking to clean your desk to kick things off. When it comes to desk cleanliness, you have two choices: leave your desk alone or set it on fire. We will quickly add our standard disclaimer that says bankers should never, under no circumstances, set fire to your desk without clearing it with Compliance first. During an informal poll, many bankers chose to wipe down their desk with paper towels and water, which mainly serves to provide dampness and move around the germs to new and fertile desk areas. Of course, there is the slob approach which, by efficient laziness, ignores the messy desk and makes the office safer for everyone.
The Deposit Sales Cycle
Similarly, if you ask most bankers how long it takes to get a retail customer to switch banks or open up a deposit account, the answer is usually “about two to three weeks.” However, when you review their email trail or CRM system, their efforts are usually closer to two or three months. Like desk cleanliness, it turns out that the absence of action probably works to everyone’s advantage, as most buyers need two or three months to make a decision.
Survey data from Shopper Sciences of 250 bank customers that opened deposit accounts details this very nicely. The vast majority, some 48% of potential bank customers, took between one and six months to decide with the bulk (21%) around two to three months. Thus, business development officers that recognize this timeline can benchmark themselves and take steps to speed up the process thereby increasing the number of customer conversions and reducing the cost of acquisitions by about $200.
Changing Your Deposit Process
If you are looking to make your bank’s sales process more efficient, there are some process changes that can be made. Of course, the number one item that bankers can do is to make sure their staff is well-trained, as bank officer interaction and product knowledge was the number one factor in both the speed of the sales cycle and the level of post-opening satisfaction.
The next largest factor is the account opening process itself. The more streamlined the process is, the faster the overall sales cycle tended to be. Again, no surprise, banks with online and mobile account opening processes have the shortest sales cycle while banks with manual processes have the longest.
Every time, the account opening process requires action from the customer, such as coming into a branch to sign signature cards, verifying ID in person, printing out and bringing in forms, or something similar, the longer the sales cycle tends to be. To recap this point, the more manual the process, the longer the sales cycle and the more costly the transaction is for the bank.
The Role of a Bank’s Website
The next largest item to speed up the cycle is online research. More than 60% of new deposit customers go online to research on the bank or product. If your deposit product page looks like something the regulators produced (below), you shouldn’t be surprised that you are not getting more deposit accounts.
Spend the extra $3,000 and get marketing involved. Provide a story, some narrative around the product, an interesting picture or two and please, please, please – a call to action.
More than 85% of banks fail to include a call-to-action on their webpage leaving the customer to figure out on their own how to open this account that they just researched. By including a link for online account opening, the ability to set an appointment in the branch or the ability to request more information, conversion rates can be dramatically improved. This functionality can more than pay for itself by the 10th account opened.
The Role of Social Validation
The other major factor to make deposit account opening easier and faster is social validation. It turns out that in almost 60% of new deposit accounts, the customer had input from family or friends. Here, banks with a referral program, social media presence, and/or testimonials on their website can help shorten the sales cycle dramatically by providing a convenient way for customers to receive social validation.
Putting This Into Action
Customers don’t just walk into a branch wanting to open up an account. Deposit research shows that it takes 8.9 interactions with a potential customer to complete a new relationship. This means that your future customers are driving by your branch, interviewing your branch staff, looking at your webpage, being influenced by ads, interacting with you at events, talking to people about you and reading your name in the paper.
If you increase the quality of any one of those interactions and you will shorten the sales cycle. A shorter sales cycle not only means more deposits but reduced acquisition cost.
Banks that are lamenting deposit growth should first take another look at their account opening process and marketing efforts. Not paying enough respect to your bank’s marketing and operation efforts usually is an indication that you are not paying enough respect to your bank’s deposits sales efforts as well. Sales, marketing and operations all need to go hand-in-hand to be able to generate competitive deposit growth in this day and age.
To make your sales process more efficient, increasing training, updating your digital capabilities and conducting marketing campaigns can all help in the effort to improve profit. It may seem like a cost now, but it can pay off handsomely in just a matter of months.
Of course, if all the above marketing efforts fail, the cleaning your desk with fire move is always good for thousands of YouTube hits.
Submitted by Chris Nichols on January 09, 2019