Employees Connecting with Customers
Harvard Business Review recently described that business competition used to be like traditional theater; where the actors had clearly defined roles, and the customers paid for their tickets and passively watched what takes place on stage. Now the scene has changed and is more reminiscent of experimental theater of the 1960’s and 70’s where everyone and anyone can be part of the action. A perfect example is the recent debit card fee debacle that was never implemented because of customer outrage.
I recently heard a Banker use a prepositional phrase to describe the condition of the Commercial Finance Business: “Simply put, we are over-regulated, and under capitalized."
While that may be a quick explanation as to why his organization has seen dips in operating profit margin, and return on assets, I wondered if I were to truly take the time to look under the hood of the organization what I would find? How is his organization doing in terms of client retention, established market expansion, emerging market penetration, customer service, competitive advantages, additional product offerings, etc?
Certainly times have changed since September of 2008, and according to a recent CEO survey published by Price Waterhouse Coopers, 84% of corporations have changed strategies within the past two years. But are external factors, such as regulation, really as big of a head wind for top and bottom line revenue growth, as many seem to think they are?
While it is true that regulators have cracked down on “Asset Quality”, regulators are not preventing banks from offering lower interest rates, reducing fees to incent credit worthy borrowers, speeding up turnaround times, providing faster credit approvals, etc.
CFO magazine published a study last year that 46% of companies’ are “more likely” to change some or all of their banking partners. While CFO’s confidence in their banks has increased, data points still suggest that more are ready to switch. The question begs, how well do banks know their people, involve their customers, and how well do they attempt to align strategies to be mutually beneficial partners. I submit that much can be gained that has been lost in those areas.
We teach that People are at the center of our 5 Drivers business model. Simply explained, people means: good employees connecting with their customers. Whether you’re a health insurer dealing with medical expense ratios, a med device company trying to wrestle with product to market, or a bank trying to adhere to asset quality standards, the better you know your customer, the more adept you can become at navigating the regulatory waters in pursuit of growth.