The Truth About Customer Relationships

Brett King was spot on when he tweeted:

The post, titled Top 4 Performance Stats That Will Blow Your Mind, contains some great data points. You should read it–after you finish reading this post. I’m going to reveal and comment on one of the data points here.


According to the post:

Bankers spend 75% of their time during the new customer/account process on the computer versus building relationships through a conversation.

From a marketing perspective, this raises two very interesting questions:

1) How much time does your FI actually spend on the new customer/account process? Three-quarters of that time may be spent on the computer (vs. conversing), but exactly how much time are we talking about? I bet many FIs don’t know. If you don’t, then you don’t know your true cost of customer (member) acquisition. And if you don’t know your true cost of acquisition, you can’t make informed decisions about how to invest your marketing dollars, or perhaps stated differently, how to reallocate your marketing investments to improve marketing ROI.

2) What really constitutes relationship building? The implicit assumptions in the GonzoBanker statement are that “having a conversation” = “building a relationship,” and conversely, that “entering data into a computer” = “not building a relationship”. The second part might be true, but we need to more closely evaluate the first statement.

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Three Truths About Customer Relationships

The first truth is that you might not have a “relationship” at all with many customers. I’m too lazy to go for looking for it, but there are a number of studies that found that some significant percentage of consumers couldn’t care less about the bank they do business with.

The second truth is that, if you do have a relationship, you probably don’t know what created it, or what strengthens it. You can ask people, but you’re not likely to get good answers. You’ll get “market research-y” answers like “my bank strengthens our relationship when they make it easier for me to do my banking.”

The third truth is that, whatever you are doing to create and strengthen your relationships, what’s important to one customer may not be very important to another.

What Builds Relationships?

I wouldn’t argue that entering data into a computer is a form of “relationship building,” but I would argue that simply having a conversation with a customer or prospect is not necessarily building a relationship.

I couldn’t begin to count the number of times a salesperson or customer service rep asked me stupid questions, in an attempt to make conversation (or build the relationship), when all I wanted was to be done with what we were doing, and get out of there.

My take: Meaningful engagement builds relationships. 

Not all actions–or conversations, for that matter–have an equal impact on relationship building. (If you believe that they do, then you should stop reading this, as the rest of the article will piss you off, and to be blunt, I think you’re an idiot for believing something so foolish.)

In that context, it’s not having a conversation that matters. It’s WHAT the conversation is about that matters.

Here’s an example: One of my favorite companies is REI. A while back, I was in an REI store shopping for snow shoes. I was looking at pairs in the $175-200 range. One of the employees (I’m not sure I should call him a “salesperson”) came up and asked “what kind of snowshoeing do you do?” After I told him, he said “you don’t need to spend $200 for a pair of snow shoes–the ones in the $100-$125 range will suit your needs just fine.”

It wasn’t about how much time he spent with me, or what percentage of the time he spent with me that was allocated to conversing versus ringing me up. What helped to build the relationship was asking a question and providing advice that demonstrated he (and therefore, REI) had my best interests in mind.  By doing that, he made it a meaningful engagement–and not just any-old engagement.

Why Can’t Banks Build Relationships?

Here’s the problem in banking: Many of the people working in bank and credit union branches: 1) Don’t know the right questions to ask; 2) Don’t know enough or unable to provide the right advice in response to the right questions; and/or 3) Aren’t comfortable asking the questions or providing the advice in the first place.

If that’s the case, then what does it matter how much time they spend during the new account/customer process on the computer?


In some cases, relationship building can’t be associated with identifiable actions, like my interaction with REI.

A few years ago, I was working with a large bank that initiated a research effort to understand why its loyal customers were loyal. They identified a number of loyal customers, and invited them into branches to be interviewed (which were taped, so that’s how I came to see them).

I can’t remember the one thing my wife told me this morning that I’m supposed to do today, but dammit, I still remember this interview 10 years later. The customer was a man in his 60s from West Texas, so as you read the following encounter, feel free to apply that West Texas drawl to his comments:

Interviewer: Thanks for spending some time with us this evening, we appreciate it. And we especially appreciate you being a loyal customer, which is what we wanted to talk to you about it. Why are you such a loyal customer to the bank?

Customer: Well….I guess it would have to be because of Jenny.

Interviewer: Jenny? Who’s Jenny?

Customer: She’s the branch manager here.

Interviewer: What makes Jenny so special?

Customer: Well…(long pause)…there was this one time I came into the branch to make a deposit, and as I was standing at the desk to fill out the form, the pen ran out of ink. Now Jenny’s office is around the corner, and I don’t know how she knew, but before I knew it, there she was with a new pen.

Interviewer: And that’s why you’re a loyal customer?

Customer: Yes sir.

Damn. Try to elicit that kind of response out of your silly little market research studies.


Bottom line: We, as bank and credit union marketers, use the term “relationship” too loosely, and (sadly) too inappropriately. I don’t doubt that a lot of the time spent during the new account/customer process is inefficient and/or ineffective. But let’s not continue to deceive ourselves by thinking that simply having a conversation with a customer is relationship building.


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