It’s true: there’s a mountain of evidence that banks can’t get premium pricing.
Desperate competitors are doing crazy things on their way out of business. Good banks that don’t know how to stand their ground are having their best customers poached if they don’t match pricing that takes away their profits, which starts them circling the very same drain.
There’s another mountain of evidence of banks that are getting substantial premium pricing every time, and getting it from high quality customers. What do they know that the others don’t?
Try these top three for starters…
Your NEXT Quality Customers Look Just Like your CURRENT Quality Customers
ALL of your marketing and prospecting efforts should be spent on the psychographic and firmographic matches of your current most profitable customers. Period.
Why? Because there are certain people for whom price doesn’t much matter. We all know the woman who clips coupons to save 10 cents, but thinks nothing of buying the $500 purse.
Or what about the guy who is still wearing t-shirts with holes, but always has money for the next NFL game?
Then there’s the penny-pincher who has raggedy 20-year-old carpeting but has money for the new sports car.
Let’s face it: There are people who make buying decisions that have little to do with price—and when you figure out what matters to them, price is hardly an issue. That’s where a clear understanding of your 3-5 targeted firmographic and psychographic markets is essential, because the entire marketing and sales plan has to focus there.
Your job is to target and sell to prospects who consider price last—NOT first.
Get out of the “Commodity Business”
Now that you know which markets to go after, roll up your sleeves and do some fundamental strategy and market what makes you different. And no, a marketing agency cannot help you. Not a chance. They are not strategists. No amount of traditional marketing can solve this commodity pricing issue for you.
Bankers who are cleaning up on premium pricing of the best prospects in the area have one thing in common—they know how to differentiate in a huge and significant way.
What makes a private jet affordable? What makes a diamond’s price reasonable? What makes a bottle of wine worth 20 to 50 times more than Three Buck Chuck (which Consumer Reports rated better than a $34 wine)?
Which leads to…
Reinvent the Buying Criteria
Research of wealthy customers reveals that they almost universally hold one thing in common: they want the top experts—those few people who get far beyond commodities to making an astounding difference through their work.
Let’s call these top experts the 2 Percent Club—those who REALLY know what they’re doing.
The wealthy will always find the perceived-best heart surgeon—but the masses will take any heart surgeon. The wealthy will find the perceived-best estate attorney—while the masses are happy to look for the best price. The wealthy and wise will frequent the best restaurants, book the best hotels, and insist on the best in every category that matters to them—all the time pinching pennies on things that matter less to them.
But the wealthy are also savvy. If you have a commodity—i.e., something that matters less to them—they’re going to negotiate you right out of any profit potential. So you need to reinvent the buying criteria with a savvy understanding of what each individual market not only needs but wants.
To be clear, the buying criterion rarely has anything to do with your products. A lame line, like “But we have taken care of you for years!” doesn’t work, as evidenced by the sad, sad stories of “best customers gone bye-bye.”
And let’s just forget the “We have great people and good customer service” line. That will have them looking elsewhere even as they are polite while chuckling at the relationship banker’s lack of awareness.
Reinventing buying criteria is strategic in nature. It’s more than marketing—although all marketing, from developing USPs to creating a credibility path about those USPs, must be tied to that AND must carry all the way through to the sales process.
Cold calling these marquee prospects puts you in “peddler” mode. And everyone knows you can negotiate with a peddler.
Being a peddler is a decision. So is commanding premium pricing. Which will you choose?
For soup-to-nuts strategy on HOW to target your markets, create dial-moving USPs and pull in premium pricing, attend our
Profit-Growth Banking™ Summit
It will sell out quickly due to repeat attendance, so get in now.
Call (952) 737-6730 to sign up or