I was painting my deck and fence yesterday with some high school students that my wife recruited (one benefit of having a high school teacher as a spouse is that you are never at a loss for good baby sitters and cheap physical labor). As we were painting, one the girls whipped out her cell phone and started to hold a very public conversation with her friend about borrowing $10 so that she can put a Homecoming dress on layaway (“Borrow” $10?!?! I’m about to pay you much more than that in cash!)
That’s my point. Here is a teenage girl, an hour away from cash income, and she’s already working a “loan” to cover her spending. This is worse than a payday loan – it’s a post-payday loan.
In reality, aren’t these teens a fantastic market for us to target?
- Many have ATM/Debit cards
- Too many have credit cards
- They have nothing but DISPOSABLE income
But while targeting teens for checking and credit cards, I feel we have a responsibility to help them become more fiscally sound banking customers too! A few ideas came to mind as I lay in bed last night pondering this subject:
- Why not offer a special low balance, low interest credit card for teens. Too many companies take advantage of teens with 20%+ interest rates. If a card only has a $500-$1,000 limit, where’s the risk vs. the gain of building great relationships at a young age?
- Why not make students pass a written test about saving and credit before credit or debit cards are approved? If nothing else, it would help them to think about money in a new way and would differentiate our efforts in the minds of the student’s parents (and don’t we want to be hero’s in their eyes?)
- Many of us sponsor school activities, but how many of us really leverage them? Why not negotiate to hold a student focus group at the school. Use it to learn:
. - What percentage of students has a checking account?
. - Did they simply choose their parents bank or credit union?
. - Do they understand how interest works on credit cards
. - What features are they looking for (text updates, online banking, etc.)
I’ll have these students back tonight to finish the painting; maybe I’ll hold my own teen focus group and get back a little more for my investment than a beautiful back yard.
Cheers.
Rabu, 12 September 2007
Smells Like Teen Spending
Customer Service at its finest!
Just when I thought I was out of things to talk about, I had a WOW experience!
Once a month, I travel to our corporate offices for some face-to-face time with the rest of the MarketMatch team. During my trip, I usually stay at a chain hotel that offers a great rate, a below average free breakfast and rooms that are pretty spartan (and not always very clean). Each time I stay, I usually end up switching rooms at least once because the room they originally gave me either smells like a smoke shop or is dirty enough to refuse to take your shoes off. But it's quiet, I feel safe and the staff is pretty nice. In my mind, that (almost) makes up for the shortcomings.
As I prepare for my October trip, I learn that the new Hampton Inn has opened and is ready for my reservation. I am already a HUGE fan of Hampton properties (well, Hilton in general is great, but I love the Hampton price point!) so it took me all of half a second to look into their rates.
Imagine my disappointment when I realized that their rooms are, on average, $30 per night more expensive than the previously mentioned not-so-clean chain hotel. To me, that $30 would be worth it, but in the interest of being economically responsible, it would be best to stay at the cheaper place. But just in case, I asked to speak to the manager.
I told the Hampton Inn manager (his name is Jason) of my experiences with the other hotel down the street and that while I am already a HiltonHonors Silver VIP member, I will have to continue my relationship with the other hotel because of his price. And that's when it happened. He offered me the AARP rate that split the difference. Now we're talking. A better night sleep, better breakfast, double dip points (that's what Hilton calls it when you earn hotel points AND airline miles in the same stay) and the peace of mind that the hotel is clean...it is brand new!!! No more sticky comforter!
I did however hesitate in that he didn't match the price, he only split the difference. Jason immediately noticed my hesitation and quickly jumped in with, "how about this...you stay here in October at this rate and when you get here we will talk about a permanent negotiated rate for all people who travel to this hotel for your company." DONE!!! I was so happy I could hardly stand it.
So, here's the obvious question...how does this relate to what you do? And the answer is...VERY CLOSELY.
While we all know that, as bankers, we never want to negotiate price, BUT, as bankers, we also know that our best customers can be tempted by the price down the street. And while our customers will still continue to do most of their business with us, when it comes to those customers who are business owners (or in my case, an employee) they will do what they have to in order to do what is best for their business. Even if that means they settle for mediocre service, no frills and fewer choices. In order to be economically responsible they sometimes have to settle for less to save more.
So here's my question to you...is it worth splitting the difference to get the business and fill the room? An occupied room at a lower rate is better than a vacant room. Or in your terms, a big loan at a lower rate is better than no loan at all...apply this to deposits...an account at a higher rate is better than no deposit at all.
I know that this is, essentially, negotiating a rate. However, I would argue that it is more about managing a relationship than negotiating price. And this may not be right for everyone...maybe just your VIP customers. And it really boils down to empowering your employees to do what is right to get the business and enhance the relationship with your best customers.
Your competition wants what you have...YOUR CUSTOMERS...especially your BEST customers. What will you do to keep them?
Not sure where to start? Call me. I'll tell you!
And to all of you ABAMN members, see you in Baltimore!!!
Jenna
Once a month, I travel to our corporate offices for some face-to-face time with the rest of the MarketMatch team. During my trip, I usually stay at a chain hotel that offers a great rate, a below average free breakfast and rooms that are pretty spartan (and not always very clean). Each time I stay, I usually end up switching rooms at least once because the room they originally gave me either smells like a smoke shop or is dirty enough to refuse to take your shoes off. But it's quiet, I feel safe and the staff is pretty nice. In my mind, that (almost) makes up for the shortcomings.
As I prepare for my October trip, I learn that the new Hampton Inn has opened and is ready for my reservation. I am already a HUGE fan of Hampton properties (well, Hilton in general is great, but I love the Hampton price point!) so it took me all of half a second to look into their rates.
Imagine my disappointment when I realized that their rooms are, on average, $30 per night more expensive than the previously mentioned not-so-clean chain hotel. To me, that $30 would be worth it, but in the interest of being economically responsible, it would be best to stay at the cheaper place. But just in case, I asked to speak to the manager.
I told the Hampton Inn manager (his name is Jason) of my experiences with the other hotel down the street and that while I am already a HiltonHonors Silver VIP member, I will have to continue my relationship with the other hotel because of his price. And that's when it happened. He offered me the AARP rate that split the difference. Now we're talking. A better night sleep, better breakfast, double dip points (that's what Hilton calls it when you earn hotel points AND airline miles in the same stay) and the peace of mind that the hotel is clean...it is brand new!!! No more sticky comforter!
I did however hesitate in that he didn't match the price, he only split the difference. Jason immediately noticed my hesitation and quickly jumped in with, "how about this...you stay here in October at this rate and when you get here we will talk about a permanent negotiated rate for all people who travel to this hotel for your company." DONE!!! I was so happy I could hardly stand it.
So, here's the obvious question...how does this relate to what you do? And the answer is...VERY CLOSELY.
While we all know that, as bankers, we never want to negotiate price, BUT, as bankers, we also know that our best customers can be tempted by the price down the street. And while our customers will still continue to do most of their business with us, when it comes to those customers who are business owners (or in my case, an employee) they will do what they have to in order to do what is best for their business. Even if that means they settle for mediocre service, no frills and fewer choices. In order to be economically responsible they sometimes have to settle for less to save more.
So here's my question to you...is it worth splitting the difference to get the business and fill the room? An occupied room at a lower rate is better than a vacant room. Or in your terms, a big loan at a lower rate is better than no loan at all...apply this to deposits...an account at a higher rate is better than no deposit at all.
I know that this is, essentially, negotiating a rate. However, I would argue that it is more about managing a relationship than negotiating price. And this may not be right for everyone...maybe just your VIP customers. And it really boils down to empowering your employees to do what is right to get the business and enhance the relationship with your best customers.
Your competition wants what you have...YOUR CUSTOMERS...especially your BEST customers. What will you do to keep them?
Not sure where to start? Call me. I'll tell you!
And to all of you ABAMN members, see you in Baltimore!!!
Jenna
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