Selling the Bank Banking & Finance

Bellringer Before you begin this chapter, see what you already know about “Selling the Bank” by taking the chapter pretest. www.m.g-wlearning.com

Guess Who!

Video: “Selling the Bank” http://www.g-wlearning.com/finance/9781605257785/student/ch11/video01.htm

Marketing and Promotions Why? Explain how customer needs and wants are used to identify a target market. Describe the components of a marketing strategy and how it is developed.

Discussion Think about your favorite recent commercial or advertisement. What was the commercial trying to persuade you to do? Was the commercial effective? Why or why not? What similar tactics would you use if you were trying to persuade someone to use a bank?

Meeting Customer Needs Every customer has needs and wants Need: something a person must have to survive (food, shelter, clothing) Want: something a person would like to have (can survive without it)

How do a bank’s products and services fit into a consumer’s needs and wants? Every consumer needs money to purchase or acquire items essential to life. To create a customer from a consumer, banks need to give consumer what he/she needs.

How does a bank give the consumer what he/she needs? Identifying a Target Market Design products/services to help meet needs of the customers in community served A market segment is a group of consumers that share common wants and needs By breaking consumers into segments, banks can focus on likely customers A target market is the marketing segment that will be the focus of the marketing strategy

Demographic Market Segmentation

Geographic Market Segmentation

Psychographic Segmentation

Behavioralistic Segmentation

Answer the following questions in your notes handout at this time Answer the following questions in your notes handout at this time. (3 minutes) Why is setting up a target market helpful in marketing the bank? What does a market segment of consumers have in common?

How does a bank give the consumer what he/she needs? Matching Bank Products and Services to Needs and Wants Once target market is identified, bank can match needs and wants of consumers to products and services.

Matching Product Characteristics with Target Market Needs and Wants Characteristics of Mortgage Loan (Product) Needs and Wants of First-Time Home Buyers (Target Market) Small down payment Small amount of money saved for down payment Competitive interest rate Low mortgage payments Few closing fees Low closing costs Roll closing costs into the mortgage loan Flexible credit requirements Approval with short credit history No penalty for prepayment Increased income over time

Developing a Marketing Strategy Advertising involves calling attention to a product or service, commonly through the use of paid announcements Only one part of marketing Marketing is the process of introducing a product or service to the consumers who can purchase it.

Aspects of Marketing Marketing Advertising Market Research Pricing Sales Strategy Customer Support Distribution Media Planning Public Relations

Developing a Marketing Strategy Marketing professionals develop a plan that will help the bank meet customer needs while making a profit Developed around the four P’s of Marketing: product, place, price, and promotion

Product What products or services meet the needs of consumers in the target segment? Examples: certificate of deposit, savings account, mortgage, or mobile banking app

Place How will the product be available to customers? Examples: online, at a bank branch, from an ATM or smartphone; regionally, nationally, or internationally

Price How much will the product cost the consumer? Examples: fees and interest rates are paid as well as charged

Promotion How will the product be announced? Examples: through TV advertisements, billboards, Internet, social media, or a combination of these.

Creating Promotions Promotion is an activity that increases consumer awareness of a product Advertising a type of promotion Distributing pens with bank’s logo Sponsoring a city-wide event (concert) Creating a website Sending email messages or social media updates Distributing calendars Holding seminars

Answer the following questions in your notes handout at this time Answer the following questions in your notes handout at this time. (3 minutes) How have the methods and locations for promoting a product changed?

Creating Promotions Many regulations on promotions and advertisements Interest rates must be stated in specific ways Select terms must be avoided or included If a certain balance must be maintained, must be stated “Member FDIC” must be included in anything HUD (Housing and Urban Development) requires “equal-housing lender” on mortgage products

Answer the following question in your notes handout at this time Answer the following question in your notes handout at this time. (2 minutes) When must the phrase Member FDIC appear in a bank’s communications?

Making a Sale Personal selling is most common “hello” “how can I help you?” “is there anything else you need?”

Making a Sale Cross-selling is a personal selling strategy that encourages existing customers to buy new products or services based on their previous purchases Also known as relationship-based selling Requires interaction between bank employees More relationships, more likely to be loyal to the bank

Making a Sale Event-based selling is when a bank employee contacts a customer because of an event that has recently happened with that customer. May trigger another event

Answer the following question in your notes handout at this time Answer the following question in your notes handout at this time. (3 minutes) Why is cross-selling sometimes referred to as relationship-based selling?

Activity Consider promotional techniques other than commercial and print advertising. What are some other ways to advertise banking products? Using information provided in your notes and independent research, create a presentation (PowerPoint or Prezi) of marketing ideas for a bank. (email to kyshacoleman08@gmail.com) Present as if you are a bank marketing specialist presenting marketing ideas to a board of directors.

Complete the following questions in your text packet: Multiple Choice: 1-6, 8-10 True or False: 11, 13-14, 17-18, 20 Matching: 21, 24-26, 29-30 Open Response: 31-34, 38, 40 DUE 1 DAY AFTER COMPLETION OF “MARKETING AND PROMOTIONS”

Bellringer (10 minutes) Create a chart listing some needs and wants of consumers. In the second column, list the products or services that banks provide to satisfy these needs and wants.

Bellringer (10 minutes) Create a chart of target markets that a bank might identify. Indicate on the chart which markets you are included in or excluded from.

Building Relationships Describe the elements that create a positive image for a bank Explain the importance of customer service in keeping customers Why know this?

Discussion What does the term customer service mean? Where have you heard this term before? What are some qualities of good customer service? Write your responses in the notes. Evaluate how your answers match up with those presented at the end of the lesson

The Bank’s Image A business’ public image is made up of the ideas and opinions that people have about the business Positive public image makes it easier to hire and retain employees, acquire new customers, and keep current customers

Answer the following question in your notes handout at this time Answer the following question in your notes handout at this time. (2 minutes) How does a positive public image help a bank?

The Bank’s Image Bank must be seen as honest, stable, and an important part of the community Economic strength of a community often depends on its ability to get credit (helps it run and grow) Banks engage with communities they serve (marathons, financial education, serve on civic boards and chambers of commerce) When image is damaged, must be repaired (replace managers, change how they qualify borrowers, institute other policy changes)

Answer the following question in your notes handout at this time Answer the following question in your notes handout at this time. (3 minutes) List four ways that banks engage with the communities they serve.

What is Customer Service? Customer service includes all interactions between a customer and the bank. A customer is an individual, organization, or business that purchases a product or service. Starts when bank and customer interact for the first time Every interaction is an opportunity to impress Adds value to the bank and increases customer’s loyalty Poor customer service = losing a customer Great customer service = keeping a customer

Employee Behavior Every bank employee is a customer service representative Must avoid any behavior that is unethical or inappropriate Costs much less to retain satisfied customers than it does to acquire new ones

Employee Behavior Employees should always: Address the customer by name Know the products and services that the bank offers Apply their expertise to the customers’ needs to find the product that is right for him or her, not just what is profitable for the bank Exceed in the customer’s expectation for service

Employee Behavior Building rapport (bond of mutual trust) with a customer will increase his/her satisfaction. Central to a successful and ongoing business relationship. Employees should be able to explain options bank offers When bank employees use what they know about the bank and its products, they contribute to its success

Answer the following question in your notes handout at this time Answer the following question in your notes handout at this time. (2 minutes) Why is it important for banks employees to be able to explain the options the bank offers?

Language Use speech and body language similar to that of the customer Be aware of your nonverbal communication (and customer’s) Cultural Find shared interests and experiences with the customer Be aware of cultural differences Other Create a positive environment Be open to doing something for a customer for no immediate return Identify barriers between you and customer and work to remove them Rapport

Employee Behavior Good or poor service will likely be mentioned to others Word-of-mouth advertising is a type of promotion in which customers tell others about their experience with a specific business. Banks cannot control this--only customer service

Answer the following question in your notes handout at this time Answer the following question in your notes handout at this time. (2 minutes) How do banks control word-of-mouth advertising?

Activity: “Focus on the Customer” (15 minutes in class—rest for homework)

Customer Service Offerings Reps are important. So are quality products and services Locations Handicapped accessibility (ADA required) International services (credit/debit cards, travel-related services) Secure website (online bill pay, account balances)

Answer the following question in your notes handout at this time Answer the following question in your notes handout at this time. (3 minutes) What are four customer-service offerings that enhance a bank’s image and generate customer loyalty?

Research Activity Research community events sponsored by local banks. What are the most common types of events? Why do you think banks sponsor community events like these? Write a summary of your thoughts on the effectiveness of these events, as well as suggestions for additional ways for banks to maintain a positive public image.

Bellringer (10 minutes) Think about an occasion when you witnessed inappropriate customer-service behavior at any business. Write a short summary discussing the encounter and what you think should have been done differently.

Complete the remaining questions in your text packet: Multiple Choice: 7 True or False: 12, 15-16, 19 Matching: 22-23, 27-28 Open Response: 35-37, 39 DUE 1 DAY AFTER COMPLETION OF “Building Relationships”