The Beginning of the End of Rate Matching in One Powerful Step

You know that you shouldn’t be matching rates. But you can’t just put your foot down with a customer and say, “These are our rates, take ’em or leave ’em.” With a presentation like that, why on Earth would anyone take it?

Instead, you have to clearly establish the unique value to the customer – value that makes it well worth the difference. And the process begins with one crucial step: Find out what matters to your best customers, then build hundreds of Unique Selling Propositions (USPs) around those components and list them explicitly in your marketing materials.

Here’s how to make it happen:

  • Each time a new account is opened, have your people say, “Tell me why you’re moving to us, and maybe a thing or two you wish your previous bank had done differently that you’re hoping we can deliver for you.”
  • Have them record the EXACT answers in a ledger.
  • Don’t wait a month or two to gather and review them! Do it as they come in. This is how you’ll build the USPs that put an end to rate matching.

Rate matching is something you do when you can’t justify a higher rate than your cheapest competitor. It’s what you do when the customer is comparing vanilla to vanilla to vanilla.

But once you establish your unique value to the customer through hundreds of USPs, suddenly your people are standing on a foundation of value. And if you’re telling the story of your USPs effectively – in person and in your marketing – customers will have no problem seeing exactly why you’re worth the difference.

As recently as 2007, The Farmers Bank in Frankfort, Indiana was reporting net interest margin of just 3.39 percent. Once The Emmerich Group began working with their lenders on strategy, things began to move rapidly. By 2012, The Farmers Bank’s net interest margin has skyrocketed by over 50 basis points to 4.02.

What made the difference? Farmers Bank CEO Karen Miller says, “We convinced our lenders that they, and The Farmers Bank, are worth the extra money.”

That confidence in your own value to the customer makes all the difference.

Roxanne Emmerich
President and CEO

P.S. If you’d like to discuss your bank’s specific challenge, we have our consultants standing by… just give us a call at 952-820-0360 to see how The Emmerich Group can help you move the needles that take your bank on a new path to profitability.

Leave a Reply

Your email address will not be published.