The Long Tail of Banking

Letting customers outgrow niche banks October 22, 2010

One of the traps that most traditional banks and credit unions fall into is feeling the need (maybe even the duty?) to have products and services that serve customers throughout their entire lives. The thought of losing a customer because they have evolved or outgrown the company is terrifying to the bank.  And it doesn’t take a rocket scientist to see how this feeling leads to the overly long product menus we see at today’s financial institutions, and the “we can be–and WANT TO BE–everything to everyone” mentality that is so pervasive.

So let’s go ahead and get one thing straight right now:  Customers will frequently outgrow Nicheruptive‘s niche banks. They will move on when we no longer fit them. And not only is that totally OK, it’s critical.

Here’s they key:  The wider range of customers and/or needs you try to serve, the less you can possibly truly tailor your experience to a niche group of people.  The more you stretch to accommodate more breadth, the more you stray from your vision. Instead, our banks will be boutiques.

Nobody goes to In-N-Out because of the wide range of food choices to fit any lifestyle. Nobody goes to ING Direct for full-service banking. And those aren’t even niche companies…just companies with a commitment to their strategies. Just imagine the focus a true niche bank will have.