A note from Charlie – Oct. 8

October 8th, 2015 Charlie Funk
Charlie Funk

What is it that you value in your bank? Our industry spends hundreds of thousands of dollars each year to determine what it is that consumers most value in their financial provider. This month, I take a look into this question and hope that by the time you have finished reading this, you will know what it is you value most in your bank.

Convenience is still top of mind more often than not. But, what is convenience?  For most persons, it means that their primary financial institution has a physical presence (a branch office) that they can easily access. For many reasons, the banking industry has been scaling back the number of offices (more on that in a minute). Nevertheless, it’s important to most customers that they can, without undue effort, drive to an office and have a face to face conversation with a banker when the need arises. It is important to acknowledge that many customers seldom or never need to have this conversation.  But the opportunity to have it seems to be important.

Technology is increasingly important to our customers. It is normally not the highest rated attribute, but it is growing in importance. The next question is “what is technology?” For some, it is the ability to sit down at home and access bank accounts via a laptop, iPad, etc. For others, it is the ability to access accounts from a phone (this is the most rapidly growing service we offer). Increasingly, our customers are demanding the opportunity to deposit checks remotely through their phones. Less known is the ability of many banks, including MidWestOne, to send text alerts signaling important information (account nearly overdrawn, a certain check has cleared, etc.). You can see that in many of our customers’ minds, the need for a branch office is becoming less important. Branch traffic has been on a multi-year decline at the nation’s banks and this trend shows few trends of easing.

To combine points 1 and 2 above, many of our customers would say that having good technology means that a bank is convenient for that customer. Think about that. That’s why MidWestOne and many of America’s hometown banks are investing in new technology each year so that they can retain their existing customers and attract new ones.

Price is usually in the top four or five attributes when consumers are polled. Price is an interesting theme. For some customers, it is all that matters. As a former boss told me many years ago when speaking of a specific customer, “he would walk across the street to a competitor for an extra dollar!”  Research shows, however, that this is a minority of customers. One of MidWestOne’s market managers once told me that low priced competition in our industry is akin to Walmart (I say this with all due respect for Walmart). If you want the bottom dollar on price and little service with it, our institution is probably not for you. But if you want a fair price and excellent service, now we can talk!

When MidWestOne surveys its customers, it finds that they most appreciate two specific things about our company and neither are among the three choices listed above, although they are indirectly related.

Our customers first and foremost appreciate our high quality staff. We’ve been surveying our customers for about five years and our staff always tops the list of things our customers like most about us. Many companies in many industries pronounce that they give “great service.” The reality is some do and some don’t. The next time you hear this from any company, ask how exactly that company knows it gives great service. It’s my belief that unless you survey your customers, you cannot know for sure about the level of your service.

We spend large sums of money to train our employees so that they have the tools they need to provide excellent service at every interaction. We also devote much time to assuring our electronic banking is customer friendly. Over time, almost every customer will encounter some issue needing resolution with their financial institution. If our staff is doing its job well, when we courteously and efficiently help a customer with a problem, we form a bond with that customer that lasts for a long time.

And so, that is my bottom line:  we will provide convenient offices, good technology, and a fair price for our services. But without an engaged and talented staff that is passionate about an 81 year-old mission statement of “taking care of our customers and those who should be,” our customers will not be well served.

I conclude with an important postscript:  Close behind the quality of our staff in our customers’ minds is the extensive and important involvement that MidWestOne has in each of the communities it serves. This is interesting to me. On the one hand, the fact that we are generous givers to hundreds of worthy cause each year truly does resonate with our customers. However, national surveys would indicate that this generosity in and of itself is not enough to cause most customers to choose a financial provider. The message to me? We must continue to support our communities in a big way in addition to the other things discussed in the first part of this article.  It’s the right thing to do.

Charlie Funk

About the author

Charlie Funk is President and CEO of MidWestOne Bank. He works with the MidWestOne team to oversee the daily operation of the bank.

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