Jeff Judy

Jeff's Thoughts - March 19 , 2008

Doing More With More . . .

I've noticed that for many bankers, the more information they have about a customer, the less time they spend reviewing it. This is especially true at renewal season, when new applications get scrutinized in detail while the long term customers almost get rubber-stamped, and popped back into the file drawer for another cycle.
If this is your approach, you could be missing a lot of opportunities . . . and some problems.
Both opportunities and problems are reflected in change of various kinds. If you go beyond comparing this year to last, and look back over several years, you might see changes in:

customer responsiveness: how quickly and thoroughly the customer answers your requests (routine or otherwise) for information about their business.
the customer's position relative to their market and their competition. Could strong profits mask the fact that their rivals are growing faster, more profitably, than they are? Or could a slight dip in their numbers actually reflect a successful attempt to take a larger market share?
management and ownership, including the second tier of management, the "lieutenants" who really make things work in most companies. Turnover figures, either at the executive or at the front line level, can also be clues to change in the company's fortunes.
the patterns of numbers that produce the end results bankers like to focus on. Perhaps profits look much the same as they always did, but they are being generated quite differently than was the case five years ago. Perhaps there are opportunities to sell them products and services that wouldn't have made sense five years ago, even though their bottom line is much the same as it has been.

It is somewhat ironic that bankers often wish they had more information about a new client, but they don't make thorough use of the more extensive information they do have about their long term customers.
I suggest you pull together several years of data from your files on your long term customers. Naturally, you'll start by looking at trends in the bottom line. But go beyond that to extract the following information:

What has changed in the big picture over that time that might affect them? Business environment, general and local economy, competition, supply costs, availability of labor?
What has changed inside the company over that time? Management, key players at the next level down, product lines, locations and markets, sources of capital?
How are those bottom line numbers generated? Do the same profits come from the same products at the same margins in the same markets, or have some things changed?
Do any of those changes raise concerns about what the numbers might say in a couple of years?
Do any of those changes connect to products or services that could be helpful to this customer?

Same old, same old can be very reassuring. But it can also hide problems and lead us to overlook opportunities. When you have more information, why not collect the ROI on your long term customers by taking the time to learn all you can from your shared history?