Two Questions Bankers Should Be Asking Themselves

Two recent posts by Bill Taylor (co-founder of Fast Company Magazine) on his Game Changer blog have really grabbed my attention. Both posts pose questions that every financial services executive and marketer should think about.

The first question, discussed in the more recent post, deals with benchmarking – “Why copy the competition?” Bill frames this up using Commerce Bank as an example, saying “They (Commerce Bank) didn’t evaluate the company against Citigroup, Bank of America or Wachovia. They looked to Starbucks, Target and Best Buy.”

More people in financial services should follow a similar approach. Rather than looking at how your institution stacks up against your peer group, bankers should be looking to apply some of the thinking used by companies outside of the financial services industry.

And, I think this question should be asked anytime someone proposes adding/developing some kind of copy-cat product or service. All too often, new products are developed and introduced in response to a competitors’ new product offering. This kind of reactionary thinking only contributes to financial institutions looking more like one another – and does nothing to differentiate your institution.

The second question is my favorite: “As a customer, why should I choose your bank over the competition?”

Financial institutions need to establish relevant and meaningful ways to differentiate themselves from the competition. And, they need to communicate those differences in ways that everyone can understand. Think about what members of your team would say when asked this question.

Taylor’s post continues to say: “How can any business expect to outperform the competition when its own employees can’t explain – simply and convincingly – what makes them different from the competition?”

Some of the most innovative ideas in financial services are borrowed from other industries – and, in many cases, they can give financial institutions a clear and differentiated competitive advantage. It seems as though the most important step is often times the most overlooked – employee training. Every member of your staff should be able to talk “simply and convincingly” about the differences between your institution and the competition.