Something amazes me with U.S. banking institutions: they are extremely interested in the success of their clients, and they demonstrate those interests via many ways. Run a decent company and show a little promise. Within weeks, the account executives will dedicate efforts to see how their bank will help you. As they do that, they even tell you how you can save money using their products!
Goldman Sachs is funding 10,000 small businesses as it wants to seed and fertilize the next generation companies to support its mission. PayPal does something amazing: depending on your transaction volume, it offers working capital. If you see that sign in your dashboard, the chance of getting the money is 99% because they have used your data to qualify you. Hit the button, within 24 hours, you can get $50,000 in your account as working capital.
We do a lot of business with Intel Corp as its only Africa partner on programmable microprocessors. Our US bank did everything to streamline our exports; I did not spend a single cent – yes, they paid for everything and did all the filings to enable my company to export technologies. I have learnt how to even outsource “tasks” to them: this client came from Angola and we had a language issue. Within days, they provided, funded and paid for a Portuguese expert.
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In Nigeria, our company banks have NEVER extended any favour despite transactions we have done for years with them. The banks do not even know that we exist: the account officers are just focused on inflows, and have NEVER made contributions on how we can get to the next level.
That is why I do not even acknowledge their usual Thanks because you cannot thank me because I am sending your inflows when you have not committed your strategy-hours to accelerate our growth.
Contrast with their American counterparts, the US bankers deepened many things, removing the bottleneck on exports in our electronics business. They also want you to access a line of credit, etc. Largely, as you grow, you feel like you have a bank on your side.
I hope one day, Nigeria will grow to that level in our banking sector. Today, Nigerian banks are serving the needs of customers, providing you a fairly decent safer place to keep your money. They are missing at the expectation level. The banking giants of emerging Nigeria will deliver services at the level of customer perception where a bank becomes an ally that does well above the imaginations of customers. Yes, they make you to become a FAN, not just a customer.
While expectation can help you stay in the game, what firms really need to do is to meet the perception of customers. Perception is the king of all marketing. Unfortunately, few firms get to that level. Excellent innovative technology is required to play at this level. It is risky because if you get it wrong, you can harm your organization. Perception is providing to customers what they never expected or imagined they needed. But the day they see the product (or rarely service), they will embrace it en mass.
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Comment 1: Thank you for the piece Ndubuisi Ekekwe . The only thing that comes to my mind is the quote from one of the greatest that ever lived;
“It is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner, but from their regard to their own interest. ….” Adam Smith.
They understand that they are in business because there are viable businesses.
They would rather incur cost in supporting clients’ businesses to succeed than chase after foreclosures and recovery. It is an integrated Risk management strategy. When you win, they win and the other way round.
It is not rocket science, but unfortunately “common sense” is not democratized.
My Response: I admire Nigerian banks and not throwing jabs. I am hoping someone begins to be challenged to do things different and better. I worked in the Nigerian banking sector and respect it. But that does not mean we cannot do better. If you run a business in the US and have consistent transactions. Within weeks, you will see a button on your dashboard, apply or accept this offer.
Check, that is a working capital loan which is tied to your volume of transactions. Some peg it at 10% of average monthly balance over 3 months. If you do $100k, you get a working capital of $10k. Do $1m, you get $100k.
Contrast that with Lagos banks. You can do that $100k and you need $10k, they will still ask you to send paperworks even though they know you have the transactions which have been sustained over 3 years. I see limited risks on working capital loans because you are financing growth.
(I have NEVER applied for any loan in a Nigerian bank. But I feel frustrated when our startups need some funds and cannot get help even though they’re doing great volume in the same bank. In US, those startups would have been treated in special ways)
Comment 2: Delighting the customer is foundational to success for every level of business. The truly outstanding corporate entities completely embrace this way of doing business and it reflects in repeat customers, lower customer acquisition costs, and fat profit margins. Additionally, banks with a bias for excellence become great partners to promising small companies in hopes to grow their business with those companies as they grow and expand. Symbiosis is a great thing for those with the long game in mind. Hopefully, the applicable entities and politicians are paying attention to your sage advice, Dr. Ekekwe.
Beyond Customer Need and Expectation, Perception is King of Market
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Do the Nigerian banks operate in a vacuum or are shielded from Nigeria? The problem with this way of thinking is that it’s decoupled from the Nigerian reality, so it’s not relatable anyway.
Nigeria is extractive by nature, nurtured to frustrate the inhabitants as well. It’s not like it was deliberately designed to function that way, but there’s also no deliberate effort to rethink and retool things. The banks are staffed by Nigerians, so can’t give what they don’t really have.
Which aspect of the Nigerian society cares about your growth and development? A university lecturer doesn’t want you to grow, some will begin a semester course by blatantly telling you that no one makes an A in the course, some will tell you that if you are not paying for grades, then don’t expect great result. Yet these creatures are lecturers.
Your politicians don’t have a handle on what development entails, and when they do the minimum by constructing roads and bridges, you are expected to be thankful, because you don’t deserve anything good…
Is it the Police? If they rescue you from danger, then you are expected to compensate them; helping you is not part of their job.
Should I go on? The banks can’t be different, and can’t lead the change either.
You have highlighted a great point that needs attention. I feel the banks should review their plans and see how that can position Small and medium size businesses to promote their brand. Beyond declaring huge profit year on year. I am of the opinion that they should focus on value creation using a popular model developed by Peter Drucker.
He stated that for companies to attain true excellence, they should incorporate the following:
• Create utility for their product
• Price in accordance with the customer’s needs
• Adapt to the customer’s social and economic reality
• Deliver what represents true value to the customer.
Finally i believe that once small businesses in Nigeria thrives, the economy will thrive because they contribute a huge percentage to the Nations GDP and employment creation.