Magazine article American Banker

Bank Fund Sales Imperative: Target Markets

Magazine article American Banker

Bank Fund Sales Imperative: Target Markets

Article excerpt

In the heyday of regulated markets and guaranteed interest spreads, bank marketing consisted of running a rate ad in the Sunday paper and waiting for new customers to walk in the door.

Unfortunately, while advertising strategies are much more upscale, good sales programs seem to be lacking at many large regional banks. Many line managers still believe that a good sales strategy consists of pushing every product at anyone breathing in the lobby.

This "shotgun approach" to sales is hardly the method to develop long-term, profitable market share.

Today's highly competitive deregulated environment is drastically different from that of 10 years ago. It demands that banks take a closer look at their market segments.

There are more players on the field since brokers and insurance agents entered the game several years ago. Consumers also know more about financial products today, and there are more products available to them that are very tempting in today's lower rate environment.

Insurance companies have reworked annuities into super tax-deferred products with options allowing a great deal of flexibility for the owner. Bankers have developed similar products, yet deposit and loan growth adjusted for acquisitions is stagnant at many institutions.

What is the difference between the banks that are growing in their markets and those that are not?

The answer is not necessarily in the products and features they offer, but how they deliver them. While many banks still blast products at consumers, the competition is picking off their customers with well-targeted sales strategies.

Driven by competitive pressures and advances in technology, many banks have developed or purchased systems to measure profitability information.

Some look at relationships, others at profits by products, and still others by profits at the business line or responsibility unit level. All of these have merit and will be a definite force in leading the bank to better profitability. …

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