Pub. 7 2016 Issue 1

spring 2016 27 West Virginia Banker to pricing. Among the advantages Amazon gives for $99 annually is unlimited 2-day shipping, free access to songs, movies, books, TV shows and exclusive early releases plus discounts. This simplified package is attractive and banks can use the same approach. Since Prime launched in 2005, Amazon Prime now has over 47 million users that spend an average of 2x more than non-Prime customers. Prime removes friction and makes purchasing goods as easy as rolling luggage. Prime also creates engagement. As a result, not only does share of wallet, average purchase amount and retention increase but engagement or the number of times that customers think of Amazon dramatically bal- loons. The byproduct is a strategic advantage. What would “Bank Prime” look like? Instead of maintaining a two-page schedule of fees, banks need to move to an annual membership model. This simplifies the fric- tion in account opening and statement recon- cilement while making customers feel more valued. This also helps with the seemingly unenforceable tendency of fee waiving. Banks would become more efficient through simplified billing/costing, while customers would no longer have anger when charged for a 3rd party wire. Foreign ATM fees, iden- tity protection, credit verification/guarantee, accounts receivable processing, payroll and about 50 other items could be included in tiered, silver-gold-platinum-like membership. Further, specialty memberships would be a natural. Think about how medical profes- sionals; manufacturers that source or ship internationally; contractors; farmers; grocery stores; retailers; and many other customer segments could benefit from a specialty annual membership. Reviewing “club pricing” and financial membership For a “Bank Prime” to work a bank will need to get creative in providing value. For exam- ple, for certain tiers, banks could add a layer of fixed-price financial advisory help such as estate planning, escrow services, insurance, or investment services. This could be where bank’s qualified, trusted advisor status could be leveraged. Bankers could position themselves as a non-biased partner with only the customer’s best interest in mind. For a set fee, bankers would be ready to understand the issue and direct the client to the best “certified” solution provider. Should these providers not achieve a high enough rating from the bank’s clients, they would be dropped and replaced by a more suitable provider. At present, there are few places where cus- tomers can turn where the financial advisor or their firm does stand to make money off the customer following their advice. Banks could fill that role, creating a new class of advisory product in the process. The time is now for a new business model Similar to Dick Fosbury’s famous and initial- ly unorthodox high-jump flop, the concept of rolling luggage was met by ridicule and strong resistance at first. Major suitcase manufacturers like Samsonite scoffed at the idea of luggage on wheels and retailers like Sears rejected the concept. Some parts of the economy are still trying to figure out what hit them, but the answer is Amazon. A banking membership may seem like a distant concept, but it will become com- monplace. When the number-one com- plaint that banks get revolves around fees, and banks are in desperate need to reduce overhead costs to compete with online banks, an annual subscription seems like an easy answer for everyone. n CenterState Bank is a $5B community bank in Florida experimenting their way on a journey to be a $10B top performing institution. CenterState makes its data, policies, vendor anal- ysis, products and thoughts available toany institutionthatwantstotakethe journey with us and much of it can be found HERE. Reach your target audience a ordably. advertise get results KRIS MONTIONE Advertising Sales 727.475.9827 or 855.747.4003 kris@thenewslinkgroup.com