Jeff Judy

Jeff's Thoughts - September 15 , 2010

Customer Conversations and Financial Reform

With the Financial Reform Act signed into law, you have another opportunity to engage your customers in conversations that can deepen their trust in you as their financial services provider.

Yes, I said "opportunity." Regardless of how you feel about this national legislation, every time our industry gets widespread media attention, it opens the door to working with customers on matters that are top-of-mind with them, and that is definitely an opportunity.

Unfortunately, many institutions will take a short-sighted approach to dealing with these changes, leading to mistakes in dealing with their customers that will shift that opportunity to their more thoughtful competitors.

Mistake #1: Silence!

Some banks believe "the less said, the better." Perhaps they feel that few of the changes have much impact on how they do business with most of their customers. Or they think that since they just have to make the changes, no choice, there's nothing to talk about.

Keeping your mouth shut just leaves your customers looking to the media for all of their information about financial reform. And when was the last time the banking industry looked good in the press?

Rest assured, the silent treatment is the best way to get tarred with a common, rather dirty, brush. If you want to convince your customers, and prospects, that all banks, including yours, behaved badly and deserve reform as a punshment, just say nothing to them about financial reform.

Mistake #2: Selective Communication

Perhaps many provisions of the Financial Reform Act have fairly limited impact on how most of your customers work with you. If that leads you to bring up the changes only with certain customers, you may end up eroding the trust of other customers who are wondering what this Act means for them.

After all, you know that a certain provision does not apply to particular customers, but the customers do not know that until you tell them! While you believe you are saving time, yours and the customer's, your customer may assume that you are avoiding an unpleasant topic, or simply hiding something.

Will that make them more loyal to you?

Mistake #3: The Generic Response

Media coverage and government pronouncements naturally provoke responses from the trade associations that lobby for our industry. Certainly, they provide helpful tools for discussing and implementing the legislated reforms, as well as press releases and other documents containing "talking points" on the subject.

Draw on those tools whenever they are helpful. But your customer does not want to be handed a leaflet outlining "the industry's position," or be directed to a web site. They want to talk about their situations, and your practices, so be specific.

Four Steps to a Better Way

To grasp this opportunity to build trust and loyalty among your customers, and to distinguish yourself from the competition:

  1. Train your employees on the implications of the Financial Reform Act. Customers who are aware of the reform and ask about it won't be impressed if they get a lot of hemming and hawing. Train widely and thoroughly, instead of trying to narrow training on some kind of "need to know" basis.
  2. Ask your customers if they have questions about financial reform. All of your customers. All of them have heard about it from the media, they should all hear about it from you.
  3. Welcome the opportunity to compete on a level playing field. Let your staff see your confidence that your business strategies and execution will best your rivals, when everyone has to follow the same rules. Do not let your customers sense grudging acceptance, or reluctant compliance, with new requirements.
  4. Communicate, communicate, communicate! Communicate internally with staff and externally with customers, on an ongoing basis, to make sure your customers get your message, your way.

Customers are going to learn about the Financial Reform Act from somewhere. Take the initiative to make sure that each customer learns the whole story from you. Doing anything less would be a mistake.