Mark Twain once said, “A bank is an institution that lends you an umbrella when the sun is shining, but wants it back the minute it begins to rain.” Banks have earned a bad reputation with many people. They are seen as a money hungry institution that does anything to increase profits. A number of years ago, one bank saw an opportunity and tried to change that opinion. Here is that story:
Bank of America found that when a person opens an account in a bank while he is young, and if he is provided satisfactory services, he will stick with the same bank till he dies. So they started focusing on getting college students to choose them as their bankers and providing great service to these students.
° They built joint ventures with major universities all over America and would have a bank orientation program when the school re-opened.
° They tried to convince the parents to open a bank account for their children in Bank of America.
But they had problems in implementing the second tactic of providing satisfactory services. Due to inexperience, many youngsters would make mistakes and incur different fees. This caused great disappointment. So Bank of America came out with a “Stuff Happens card.”
Now when a youngster made a mistake for the first time, for example if he would run into overdraft fees, he could use his “Stuff Happens” card and waive of the fees. To redeem the card, he had to go to the bank and meet with an associate who would educate the young client about the activity that drove the mistake. This small tactic of waiving the fees for the first mistake made Bank of America a favourite among students.
Action summary:
° Targeting. Target an audience that will bring you the most amounts of profits over a lifetime.
° Loyalty. Build loyalty by providing great service. Forgo a small profit now if that satisfies your clients. They will come back to do more business with you once they are satisfied and then you will have a chance of making bigger profits.
° Education. Educate your clients and they will stick with you for a long time.