Who "owns" the customer? - changing environment of the financial services industry - Panel Discussion

Chief Executive, The, Sept, 1999 by J.P. Donlon

Peter Venetis (Atlantic Bank of New York): Sometimes with business models we can't say they're not successful yet because it's too early to say. But there is a shift in that the intelligence is not the mainframe anymore; the intelligence is just out there. We all have it. But because you can do it, does that mean you will do it? And that's where the brand comes in. You have to be conscious to be able to provide when and where and what the consumer wants. Once you're able to provide it, then that's how you build the brand and that's how you get the customer, because he will come to you.

Spooner: And I think that speaks to how you could rationalize eBay or Amazon being worth $30 billion-plus. This is a channel that has a very low cost to establish a presence and no barriers to entry. So all of a sudden, you can build brand loyalty and very rapidly do brand extension, and you have your brand running around the heads of the customers who had previously been looking other places.

Lawrence Toal (Dime Bancorp): I think we as suppliers used to define "relationship" and got away with it. But what's happening right now is the customer is redefining "relationship." And, guess what - it's not the same for every customer; in fact it's very different. So I agree that this is not going to happen overnight. I think it is definitely accelerated and we need to react with much more speed, but the customer is going to be a different thing. My son is defining a relationship in a very different way than my wife would define a relationship with any number of suppliers. And so we really need to need to figure out, in a segment of one, what each customer defines as a relationship, and get in their head and then respond to that need, rather than the other way around.

Lebenthal: In addition to looking at why they're coming, you have to look at why they're leaving. We look every month at the customers that we lose, and there is one chunk going to Merrill and Smith Barney and Prudential, and there's another chunk going to Schwab and E*TRADE and so on. And to me both of those mean that we failed in the relationship. On the Merrill and other full-service brokers, we failed because they needed more of a relationship and we didn't give it to them. On the Schwab and the other on-line and discounters, we failed because we didn't provide enough of a relationship that they even valued it, and it all became a matter of price and accessibility to them.

Buoncore: The risk is that we kind of fall back into the trap of 80-20, where we try to be everything to everybody. It's more important to understand what you want to be and where you want to deliver it. If you try to be everything to everybody, you end up diluting the impact on the market you want to be in.

INTIMACY VS. PRIVACY

Jelenko: I'm very curious about how you all feel about the issue of privacy as the flip side to this question of customer intimacy. It's a major problem for all of you who are trying to become more customer intimate, trying to collect the information about customers in order to serve them better and so on. And yet I think studies will show that the kinds of customers who will opt out in the new regulatory environment are among your favorite customers. They're the ones you want to know the most about, and, unless you present them with a positive value proposition, they're going to not want to have their information used.