Banking consultant urges banks to dump undesirable clients; Chase listens
Celent, a Boston-area banking industry research and consulting firm said specifically that banks should tell their unprofitable customers “Bye bye! Please take your business to a bank that doesn’t have a handle on customer profitability”
Chase has apparently been listening because the rest of the excerpts from Celent’s suggestions to banks could have been taken out of a Chase playbook.
The problem is, people are rarely static. Today’s unprofitable customer is potentially tomorrow’s highly successful customer and a slash-and-burn policy like Chase has is borrowing for today’s increased profits from tomorrow’s growth prospects. In other words, they are pissing a lot of people off.
As an example, my partner and I bought our current manufacturing company 8 years ago. The first four years were a work in progress and we kept having to pump more money into the company. The last four years however have been increasingly profitable, despite the recession. Had our bank dumped us early on because we didn’t fit their idea of what a good customer was then, they would have missed out on the fact that we are one of the increasingly fewer ideal borrowers today and we would have gotten our recent large loan to acquire another business from someone else.
Don’t be so short-sighted Chase.
Bad bad Chase, Fees & charges | admin June 4, 2010
