“If you want to be in it for the long term with your best customers you must become invaluable to their financial success.”
That sounds obvious, doesn’t it?
But most financial marketers spend so much time and energy trying to make themselves relevant to their everyone that they miss real, important opportunities to create profound and profitable relationships with those customers (and prospects) who should matter most to them.
The ERI Scale
Exist. Be Relevant. Prove Invaluable.
Understanding these three concepts is the foundation for your brand and operational strategy. At Wazuku Advisory Group, we call it the ERI Scale (Exist, Relevant, Invaluable), and if you execute it properly, you greatly improve your odds for success.
In the financial sector, the ERI Scale provides a simple yet elegant way to segment your existing customer base, identify your key connections and develop the appropriate strategies to make your institution indispensible with the right audience.
Here’s a quick overview of how the ERI works.
Exist – These customers know you’re out there. They receive a monthly statement and they use your products. They might even come to you if they need a service. What they don’t have is an ongoing personal relationship with you.
Relevant – You have invested in a lot of research. You have developed and introduced processes that allow you to anticipate when these customers will need a particular product or service. You are constantly and proactively reaching out to them in the hopes that you will be their first choice for these services. This is where most banks and credit unions focus their efforts.
Invaluable – These customers know you’ve got their financial backs. They wouldn’t consider buying a new home or taking out a small business loan without calling you first to get advice. In their minds, you are a trustworthy expert and they wholly rely on your guidance with respect to their financial future.
It’s widely accepted that it can cost six or seven times more to attract new customers than to keep old ones. What’s even better is to grow relationships with your very best existing customers. That’s why you want to make yourself invaluable to them.
An ‘Invaluable’ Investment
It would be ideal if you could make yourself invaluable to all of your customers, but that’s not realistic or practical. That’s why your first step towards becoming invaluable is to get laser-focused on exactly which subset of your customer base deserves this type of attention.
There are many ways to identify these customers. You may already intuitively know who they are, or you might choose a more structured approach such as a profitability assessment or a qualitative assessment of top customers. However you get there, you need to consider the following about this crucial subset:
- Although this group will represent a small slice of your existing client base (maybe 10%), your long-term success as an organization hinges on these customers believing you are invaluable to them.
- These are your influencers. Their goals, values and strengths align with yours.
- “Net worth” is only one indicator of this group’s importance because, with your help, their net worth will grow.
- These customers represent your future.
4 Steps to Becoming Invaluable
Now that you know which clients to target, how do you become invaluable to them?
1. Market segmentation
Market segmentation is the first step to becoming invaluable. Study your target customers and learn everything you can about the various broad categories they represent. If you’ve already become relevant to them, you probably have most of this information at your fingertips.
2. Insights of one
It’s time to go deeper. Market segmentation has given you a broad swath of data about your key targets. Now you need to know specific details about your target clients so you can anticipate their needs and preferences.
Leading hotel chains are brilliant at this. They notice when you drink the Chablis and leave the chardonnay in the mini bar. Next time you arrive, you can bet the bar in your room will be stocked with Chablis.
As a financial institution, you have the potential to gather even more detailed proprietary individual information about each and every client—you know their spending habits and their financial history.
3. Touchpoints
Through your insights of one you have detailed profiles of your target customers. But these are assumptions. Now, you need to engage them personally to find out what it would take to become invaluable.
In other words, you need to ask them.
You might conduct focus groups, or you might even get on the phone.
Just showing that you care enough to ask them what matters to their financial future is a huge first step in positioning yourself as the kind of invaluable financial partner you want to become. It’s these types of connections and personal relationships that will differentiate you from any other financial institution.
4. Personalized Products
Now you’re ready to create products and services that expressly meet the needs of your key target customers.
The detailed information you’ve created will drive these innovations as you look at everything you do through your key customers’ lens.
You will have a good idea of what technologies to invest in, what creative and flexible products to deliver and, most important, the human resource investment you need to make to serve your best customers.
Are you willing to make the investment? Can you afford not to?
Mike Watson is a Principal and strategic planning specialist at Wazuku Advisory Group. He has 18 years of progressive management experience in the financial services sector, most recently driving a wholesale strategic change for Blue Shore Financial as that institution’s Vice President Retail Banking and Marketing. Mike and his team created the ERI Scale to help Wazuku’s clients develop relevant, effective and long-lasting strategic plans.