Imagine a bowl of cherries within reach, yet not possible to have it; cherries very delectable that you can’t resist that quietly whisper into your ears that you can’t have them all even if you wanted to. It might turn out costly or they are just too many to have. Logic will just come into play. What do you do now? Do you just walk away? Or just get what is within your capabilities?
In investment management, “cherry picking is a process of choosing investments and trades by following other investors and institutions that are considered reliable and successful over the long term.” The practice is also common in banking despite the fact that it manifests differently and has been doing so for centuries, although in modern-day banking it exists in gargantuan propositions.
Clients are simply spoilt for choice, way too many options available informed by an array of factors. Relationships, pricing, footprint, client servicing, delivery channels, products, services, friendliness of staff, positive customer experience, the list goes on. Word also gets around and very quickly marketers will tell you that word-of-mouth to this day remains unrivalled as the best form of getting the word across. Social media has catalysed this and given almost everyone a voice because information dissemination knows no boundaries. The practice of cherry picking, lived experiences, things heard or seen, have become determinants in influencing customer choices.
There is also an unqualified belief that most customers are likely to select a bank due to the pricing factor. I will never dispute this but it is worth doing thorough research to test this notion and look at different markets, the Botswana context and other markets regionally and globally. But taking it back and delving into some form or research papers, how many of us actually go through pricing guides before we even select a bank?
Information about pricing is never kept secret. Regulation demands that such information is available to the consumers and it is indeed noble to treat our customers fairly. Despite the availability of this information, some, if not most, customers simply don’t pay attention and will choose a bank depending on what they have heard. Imagine being led to a decision by someone who may not necessarily have all the information or pricing options at their disposal but just simple comparables!
For a bank, like any other form of business, it is okay to pursue a cost effective strategy. Some hearts might be won by some clients willing to pay top pulas for as long as their chosen bank delivers and meets or exceeds expectations. And some other banks may pursue product innovation as their go-to market strategy, the list goes on. Succinctly speaking, it is all about what the customer is looking for and that customer will gravitate towards a brand or brands that can offer that, hence cherry picking.
Although the dynamics of cherry picking in investment management and banking may not be similar, certain fundamentals remain the same. A lot of clients are multi-banked as they cherry pick. We have accepted this reality as bankers, and we do not like it all. Our wish is to have it all and therein lies a question, How do you crack the code as banks? How do we tick all the boxes or at least most boxes?
For me, that will mean being able to offer a really Unique Selling Proposition( USP) pricing that is seen as affordable or cheaper by clients, or having the most knowledgeable and very clued up banking personnel who truly appreciate the ethos of customer-centricity for the betterment of experiences, easy-to-use banking delivery channels, simplified processes and procedures, favourable terms and conditions on products, and so on . The overall experience ought to accommodate the customer.
By the way, cherry picking is not a one-sided affair. Banks can also cherry pick and aim for certain customer profiles or industries in line with risk appetites and various factors. However, we do not have that much laxity, definitely a languid affair. Banks can’t match the power held by customers. We can only work towards staying relevant and appealing.
e-mail: gomolemo.manake@icloud.com
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