How Technology Increases Transparency and Value

When I began my career in banking in the mid-1990s, the financial services industry was looking to retailers for sales best practices. Financial services firms were seeking to create sales cultures in place of their previously “stodgy” reputations. Hiring models changed (sales backgrounds vs. financial backgrounds), brick and mortar locations transformed (coffee bars and couches were installed), and sales training curriculums were launched.

To keep a customer “sticky” to our bank, we were told to sell three to five products to a customer. Statistically, this was the right number of products that had been shown to make it harder for a customer to leave the bank. Additionally, customers were more likely to buy other products from the bank and thus, mitigate attrition possibilities. Recent data continues to support this strategy:

  • According to the XM Institute, loyal customers are five times as likely to repurchase, five times as likely to forgive, four times as likely to refer, and seven times as likely to try a new offering. Additionally, Increasing customer retention by 5% can increase profits by between 25% to 95%.
  • According to the CallMiner Churn Index 2020, U.S. companies lose $136.8 billion per year due to avoidable consumer switching.

Read the full article here.