There’s a new trend in town: Tailored Customer Benefits (TCB). You’ll find it in every retail industry, from booksellers to bakery shops, and yes, obviously, in banking. The problem is that the typical financial institution is limited by its legacy systems in creating and administering timely and innovative rewards to its most valuable (and profitable) customers.
Tailored Customer Benefits are based on relationship pricing. Dynamic relationship pricing is a fundamental business strategy for all financial institutions and is necessary to remain competitive in the retail banking world today. So, it’s logical to conclude that in order to be competitive, in order to keep and make customers happy, financial institutions have to relationship price and offerTCBs. Check out these four trends in the future of banking, and our take on how they influence TCB as a mandatory, long term strategy for financial institutions:
1. A new playing field for financial services – Regulation and compliance is no mere matter anymore. Increased regulatory oversight is changing everything about how the industry operates. Financial institutions that anticipate and adapt seamlessly to new compliance measures are the ones that will thrive. Those who don’t evolve will flounder. And amidst all that pressure to evolve, customers are going to demand TCB based on transparency and fair play. Dynamic relationship pricing is a strategy that satisfies regulators and customers alike.
2. Shifting segments, changing markets – Aging baby boomers, Gen X, and Millennials are all demanding a change from traditional banking. It’s no longer business as usual, and in particular the younger generations entering the market are demonstrating acute shifts in how they want to bank. Financial products and services need to change, too, to meet this different demand. It all goes back to TCB here, with each retail consumer asking to be treated as unique. Keep up, or lose them to competition that caters best to the “ME Generation”.
3. The new customer connection – Technology takes center stage here. Customer experience is crucial, and smooth, seamless, easy, intuitive experience is based on technology. Yes, technology costs – but with the right choices, those costs can be kept in check and the upgrades/updates/enhancements can bring some serious ROI. What’s more, the right technology choices make TCBs easy. Look for flexible, accessible, adaptive and transformative technology – and make TCB and connection with customers easy and at the heart of your retail strategy.
4. Reputation and relationships rule – Here’s a simple formula: treat the customer as unique, special, valued, and that customer will stick! Relationships never come in a one-size-fits-all shape; they come in as many varieties as do your customers. And good relationships build good reputations. So, help your clients manage risk, build wealth, plan for retirement, and anticipate health care expenses.Become their trusted relationship advisor. Give them TCBsand price their services based on their entire relationship with your institution. Make the relationship important, and watch your good reputation grow.