At most banks, incentives and reporting structures still reward the sale of individual products over the strength of the overall customer relationship, this article says. The result is predictable: fragmented growth, inconsistent profitability across customers, and missed opportunities to become the primary financial institution. Meanwhile, fintechs and larger banks are packaging products together and building connected services that make it harder for customers to leave.
For community banks, this is both a risk and an opportunity. Shifting focus to total household profitability and long-term retention isn’t just about growth; it’s about protecting your core customer base before a competitor pulls it away.
Do your incentive plans encourage meaningful relationships or more product sales? Do your reports show how many products you sold, or how valuable each customer relationship actually is? What would be the tradeoffs of shifting incentives? What kinds of internal resistance would surface?