Research Note July: Reader Feedback
(16 August 2006 – Australia) Last month’s East & Partners Research Note entitled "Death of the Relationship Manager" generated some impassioned feedback from readers.
The Research Note discussed the emphasis banks appear to be placing, as evidenced by current recruitment strategies, on hiring Relationship Managers whose primary mandate is to aggressively acquire new customers, in large part to replace customers who disappear via the back door due to lack of service from banks.
As more than one reader noted, if the relationship model worked properly, business development and customer origination focussed RMs would constitute only a small percentage of the overall sales team as the client base would be stable with little churn.
Separating "hunter gatherer" style RMs from portfolio managers only antagonises business customers who believed they would continue a relationship with the banker who initially won their business and undermine future cross sell opportunities.
"Hey, I came on here because of Person X and now you want me to speak to Person Y, though I know nothing about them. Who gives me service here? No thanks – I don’t want to speak to your call centre," was how one reader described a common customer experience.
Or put another way, banks need to employ (and train) RMs who know how to "sell to retain", who through their service encourage the customer to do business with "me again because of the ‘me’ experience".
Given this lack of ongoing engagement with customers it’s no surprise that so many of them are turning to brokers, who are in turn replacing banks as the "trusted facilitator".
Another salient point raised by readers was the confusion in the sales function caused by continual restructuring, with some banks having undergone six restructures in the relationship banking area in five years.
"Think of a bank, any bank. Have a look at what they were doing three years ago – I bet none of them is heading in the same general direction."
As one person noted, most restructures are simply a case of regurgitating the same old banking relationship models based around "product, classification, location and size", but given a lick of paint and new name.
Among other issues raised in Research Note there was a consensus among readers that good BDMs are thin on the ground; training is often not what it should be, younger generation business bankers don’t learn the basic skills and churn from one bank to another chasing higher and higher salaries.
On a more positive note, there was an acknowledgement that "loyalty exists if a bank can provide good service", which is a message East has been communicating for several years and one which is also pertinent in the findings in our new Business Banking Sentiment Index.
Further, provided pricing is competitive, the "health of the relationship is determined by the value provided to the customer".
A fact which was memorably summed up by one reader: "It ain’t rocket science, but dumb ‘sheep-dip’ management approaches get what they deserve in the long run".
As more than one reader noted, if the relationship model worked properly, business development and customer origination focussed RMs would constitute only a small percentage of the overall sales team as the client base would be stable with little churn.
Separating "hunter gatherer" style RMs from portfolio managers only antagonises business customers who believed they would continue a relationship with the banker who initially won their business and undermine future cross sell opportunities.
"Hey, I came on here because of Person X and now you want me to speak to Person Y, though I know nothing about them. Who gives me service here? No thanks – I don’t want to speak to your call centre," was how one reader described a common customer experience.
Or put another way, banks need to employ (and train) RMs who know how to "sell to retain", who through their service encourage the customer to do business with "me again because of the ‘me’ experience".
Given this lack of ongoing engagement with customers it’s no surprise that so many of them are turning to brokers, who are in turn replacing banks as the "trusted facilitator".
Another salient point raised by readers was the confusion in the sales function caused by continual restructuring, with some banks having undergone six restructures in the relationship banking area in five years.
"Think of a bank, any bank. Have a look at what they were doing three years ago – I bet none of them is heading in the same general direction."
As one person noted, most restructures are simply a case of regurgitating the same old banking relationship models based around "product, classification, location and size", but given a lick of paint and new name.
Among other issues raised in Research Note there was a consensus among readers that good BDMs are thin on the ground; training is often not what it should be, younger generation business bankers don’t learn the basic skills and churn from one bank to another chasing higher and higher salaries.
On a more positive note, there was an acknowledgement that "loyalty exists if a bank can provide good service", which is a message East has been communicating for several years and one which is also pertinent in the findings in our new Business Banking Sentiment Index.
Further, provided pricing is competitive, the "health of the relationship is determined by the value provided to the customer".
A fact which was memorably summed up by one reader: "It ain’t rocket science, but dumb ‘sheep-dip’ management approaches get what they deserve in the long run".
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