Unlike most banking courses and simulations that teach that advertising your rates in the local paper will solve your deposit problems, what actually happens is the creation of more problems.
Our lovable family dog, Murphy, may he rest in peace, had a few quirks. One day, as the family was about to sit down for a dinner, I put a fresh slab of butter on a butter dish in the middle of the table. I turned around to get the green beans to take them to the table. As I returned, I noticed the butter dish was clean as a bone—as if nothing had ever been on it. I started to wonder if I had beginning Alzheimer’s because I could have sworn I just put butter on the butter dish. Murphy didn’t make eye contact for about 10 minutes, but he did eventually lick his lips.
If that happened only once, I would have continued to wonder about myself. But soon the entire family came to know that if food went on the table without someone standing guard, the most innocent looking golden retriever, the same dog that never begged at the table, would stop making eye contact and eventually lick his lips—his signature move.
Clients have signature moves, too—those moves you can count on them doing every time, even though we act surprised when they happen.
The type of people who respond to a CD rate ad are also the kind of people who will not bring their entire relationship, and they’ll leave you at the drop of the next ad. That’s their signature move. It’s like dating an ax murderer thinking, “I can change him.”
So, you’ve only pushed back a problem—that your team still doesn’t have the right strategies and processes to attract low-cost deposits that stick. In fact, you’ve put your bank in a very dangerous place: a higher cost burden, with more risk of those deposits running out the door when you most need them.