In the battle for wooing banking customers, large banks are starting to lose out to community banks. It’s no longer the lowest interest rates that get people in the door; customers must be able to trust who they’re banking with. Banking is becoming significantly more competitive, with a customer base that desires an experience over a service, and larger banks are having a more difficult time adjusting.
Competitive rates don’t sell.
In a banking industry that now offers accessibility to consumers nationwide, competitive rates are no longer the biggest competitive advantage. When everyone offers competitive rates, the interest on loans or deposits are not as much of a driving force as they used to be.
Consumers seek financial partners.
Delivering on banking technology is a given, but community banks can leverage what has always been a bestseller: relationships. Community banks and credit unions can offer loans to consumers that big banks may not be able to offer. More than that, community banks and credit unions offer mutual trust. Customers are able to walk into a local branch and speak with a trusted adviser – possibly even a neighbor – about how to best invest an inheritance or whether to refinance their home.
Customer relationships are the winning ticket.
Community banks know the needs of their customers and can better serve them as a result. Cross-selling bank services to consumers that are already loyal significantly lowers customer-acquisition costs and boosts your reputation as a reliable banker. Consumers respond to convenience, but they also seek value in the services they are receiving. Tailoring services directly to consumers is how community banks stay relevant.
Stay true to your brand.
It can be tempting to copy the marketing strategy of larger banks, but that won’t maintain existing customers or attract new customers when there are so many options available. You need to find what makes your community bank unique and use that as your competitive edge. Seek out benefits, beyond low interest rates, that will peak the interests of consumers – and understand who you’re trying to connect with in your community.
Pricing structures, fees, and products must be relevant to those you serve, but you also must have a differentiator. Community banks can offer more personalized services that resonate with individual customers, luring them away from larger banks.
There is enormous opportunity for you to grow your community bank or credit union, but it starts with knowing what existing customers and prospects think of you compared to your competitors. Take action now and request our benchmark study for your region.