March 2014

What we do

Testimonials

Part 1: How to be a hero to your bank's commercial clients

Today's corporate bank clients are largely dissatisfied with the services their financial institutions are providing.

Only one in five corporate financial professionals responding to a CFO/SAP survey indicated a high level of satisfaction with their bank. Such dissatisfaction remains prevalent despite the fact that bank marketers are vigilantly nurturing their business client relationships and adding value to attract new customers.

Corporate treasurers are being called on to better manage their operations across increasingly large and complex net�works of businesses, locations and accounts. Survey respondents indicate their banks are not effectively supporting them in their efforts to fulfill these expanded roles. In fact, more than half the surveyed financial managers describe the quality of current business communications from their banks as both inadequate and too infrequent. With a recovering economy, they cite cash management as a primary challenge, one where they need more guidance — guidance their banks are failing to deliver.

Many corporate treasurers are also dissatisfied by what they see as their bank's lack of understanding of their business in general as well as their bank's inability to provide the kind of support their companies need to stay competitive within their specific industries. As a result, corporate treasurers generally don't trust the advice their bankers do provide. See The gap between banking service and satisfaction for a more detailed report on corporate financial pros' dissatisfaction with their banking relationships.

If these growing expectations and ongoing needs are not being met by their current financial institutions, corporate clients say they're more inclined than ever to seek out an alternate financial partner. And the financial impact of losing just one major market client is staggering. According to a Treasury Strategies Inc. benchmarking study, the loss of a single corporate client having annual revenues of $1 billion or more can cost a bank more than $500,000 in net profit� that could have been earned �during a lifetime (eight-year) relationship.

The good news is that by retaining just 16 of these otherwise lost relationships, a bank can net profit in excess of $8 million over the lifetime of those relationships. In fact, by reducing defections by your corporate clients by 5%, you can improve your bank's net profits by as much as 80%, Fredrick Reichheld reports in his book, The Loyalty Effect, the Hidden Force Behind Growth, Profits and Lasting Value.

So what can you, as a bank marketer, do to retain these valuable clients? Fortunately they've provided the answer to that question themselves.

For instance, in the CFO/SAP survey and report referenced earlier, What Corporate Treasuries Want from Their Bank, corporates said that in today's demanding business environment, they need more strategic insights. This includes risk management expertise, deeper analysis and objective advice on the business solutions best suited to their corporation's long-term goals and high-priority challenges. And, as we also referenced earlier, this need is particularly acute in corporate cash management. Corporate treasurers want to be kept apprised of regulatory issues that affect their industry, and to be made aware of new technologies that might deliver greater efficiency within their organization.

In another survey, CFOs reported:

• They need concise, transparent and fact-based business intelligence.
• They want benchmarks as to how their company's financials compare to peers. They want these comparisons reported in terms of key performance indicators (KPIs) and capability/maturity comparisons.
• Most CFOs said they require a cost/benefit analysis for every proposed strategy or service. They also want to know the total cost of ownership and a risk evaluation when considering a vendor's solution.
• Financial pros prefer receiving these crucial business communications in the form of newsletters, white papers and industry-related case studies.

As a bank marketer, you are the primary communications gatekeeper between your institution and its clients. Accordingly, you have a unique opportunity to deliver on each of these expressed needs and keep your clients from straying to the competition.

Being armed with this information will no doubt also go a long way in demonstrating to upper management the inextricable link between your client communications budget and the resulting ROI.