20 Apr The price of loyalty is complacency

By David Robinson

Are you rewarded by your bank for your loyalty or is your loyalty taken for granted?

As a loyal customer, you may have been with the same bank for a considerable period of time, you may have all your banking facilities with that one bank and you are a good banking customer (ie your bank accounts are kept in order and not overdrawn, you provide the bank with updated information when requested and you are an advocate of the bank).

Being a loyal bank customer, your expectation is that you will be provided the best possible service from your bank. And in most cases, this is true. Your bank manager is in regular contact, your banking requests are completed in a timely manner, your bank manager may even invite you out to lunch!

However, over time, this loyalty may be taken for granted. With increasing demands of today’s bank managers to manage more clients, to fulfil many roles within the bank, to keep up with the forever changing bank policies and compliance requirements, the client service levels are under constant pressure – even if you are a loyal customer!

When was the last time your interest rate and bank fees were reviewed for being a loyal customer?

Being a loyal and a good banking customer is very much appreciated by your bank. However, being a loyal customer does not automatically trigger an interest rate review. An interest rate review needs to be requested. This request needs to be made in conjunction with you presenting to the bank comprehensive data in order to support that your business risk profile has improved and a lower rate is justified.

Key data requirements include:

1. Profit and Loss statement
2. Balance sheet (equity position)
3. Cash flow budget with detailed assumptions on key variables
4. Business overview including short term and long term goals/ objectives for the business
5. Key strategies on how the business will achieve its goals
6. Key risks in the business and how the business manages these risks

By collating the data and presenting your business and its associated risk profile to the bank, you are then in a position to negotiate and optimize the best funding package in terms of structure, price, flexibility, security and conditions.