Need More High Quality Loans? 5 Easy Steps
While many banks are filled with lenders complaining that there isn’t loan demand, there’s a new breed of banker that’s making hay. They know what to do, and they’re doing it right now.
Welcome to the Top 5 Percenter™ Blog
How Top Community Banks Increase Net Interest Margin Without Competing on Rate [VIDEO]
For too many community banks, net interest margin has become a pricing battle they simply cannot win. Matching rates may keep you in the game today, but it won’t keep your bank independent tomorrow.
The highest-performing community banks don’t win because they offer the lowest price. They win because they’ve positioned themselves so differently that customers willingly pay more. That’s the real competitive advantage—and it’s one that many banks never discover.
In this week’s video, you’ll discover:
- Why competing on rate is becoming a dangerous long-term strategy.
- How elite community banks command premium pricing without losing customers.
- The positioning strategies that allow banks to improve margin while reducing pricing pressure.
If your institution is still winning business primarily by matching competitors’ rates, it may be time to rethink your approach. The banks producing exceptional net interest margins aren’t simply getting lucky—they’ve built a completely different value proposition.
Watch this week’s video to discover how your bank can stop competing on price and start competing on value.
Net interest margin. Three of my favorite words. Why? Because it is such an important component of what takes a bank to the top of its peer group.
Listen, if you’re tired of being average and competing on rate, there is a way out of that mess. I would suggest that the banks that don’t figure out a way to stop having to match rates are probably not going to maintain their independence going forward. Let’s face it, there is more competition than ever, and banks are undercutting each other on pricing. And yet, there are those who command premium pricing. What do they do? What do they know?
Why won’t they tell you their secrets? Well, you need to, in fact, know their secrets about how they position themselves, how they identify those who are likely to pay premium pricing, and how they arrange the situation such that the customer is telling them that what they bring that’s different is worth millions to them. Therefore, when they charge twenty thousand dollars extra, it is the bargain of the century, thereby taking them out of competing against competitors. The only thing they’re competing against is not having that special uniqueness the bank offers. You think it can’t be done?
Well, maybe you should hang out with the folks who are getting it done because if you cannot suspend disbelief and aren’t willing to say, “Maybe there’s something we don’t know,” I can guarantee you, you will continue to match rate. I don’t think banks can continue to do that anymore. Let’s face it, the big banks have a competitive advantage in pricing. We can’t compete in that space.
But listen, there will always be room for the community bank that’s the boutique bank, that adds tremendous value, knows that they’re worth more, and doesn’t say those lame things like, “We have good people,” and, “We’ve been around for one hundred and twenty years.” That’s not going to command more than twenty basis points more, and you can’t make it on twenty basis points more. This is the time to really bring in additional pricing. So I hope to see you discover how to do that.
I’m teaching a special class on how to do that. I hope I see you there.
More From The Blog
No More Slackin’… Eradicating Low Performance
How do you get people to do what they’re supposed to do—not sometimes, not sorta, but consistently and for real? This month I met an executive who said something that...
A New Seat in the C-Suite: Move over CFOs, this one will REALLY create ROI
Culture is the leading predictor of future growth and profitability. Let me repeat that. Culture is the LEADING predictor of future growth and profitability. Not new customers. Not premium pricing. Not customer service. Not expense cutting. It’s culture.
Employee Motivation Research Turned on its Ear
When the researchers tracked the day-to-day activities, emotions, and motivation levels of hundreds of workers in many settings, they found that the top motivator was actually listed dead last on the managers’ survey.
When Purple is the New White: The Art of the Zag
"WHOOOOOO'S HOT?" I shout this into the microphone at ballrooms full of bankers in city after city. After I yell, "Whoooooooo's HOT?" each table of ten goes nuts trying...
Get Rid of That “Gerbil on a Wheel” Feel
Busy work. It's nuts. It's out of proportion. In fact, the people who are always whining about being too busy and overwhelmed tend to be your least effective people....
Turn Your Market into a Buzzing Hive of Opportunity
If I owned a tattoo shop for bankers, I'd ink the same thing over and over onto client after client: Life gives to the givers and takes from the takers. It's not just...
The Proven Formula for Sales Meetings that Create Results
Is there anything worse than a bad meeting? Anything? Fine, yes, world hunger, soul-crushing poverty, and violence in the Middle East. But in the midst of a truly bad...
The 5 Best Ways to Tank Your Bank… Read Them and Weep (IF You’re Guilty)
Unfortunately, most banks have only one strategy right now—cost containment. I will go on record now and guarantee that 95 percent of the banks in that camp will not be around in five years.
Removing the Risk Roadblock
We’ve all been there. The car salesman slides the paperwork across the desk at you, pointing at the signature line. Just this one last step, he says, and there’ll be no...