It’s an age-old question. Women dream it, while men dread it. Even though the answer is known, the question continues to be asked. Does size matter?
When we’re talking modern-day business – size certainly matters. Our economy has always placed an emphasis on growth. More and more, bigger and bigger. More products. Bigger impact. More customers. Bigger reach. The theme never seems to change – but should it?
Is Bigger Better in Business?
The advantages of economies of scale associated with bigger business is huge. As output increases, the average cost per unit falls – thus allowing the company to charge each customer less. Hello Walmart.
While this concept may work for a product-based business, can the same strategy be used for service-centric companies?
Banks offer a combination of goods and services but require a relationship like no other business. As money is a lubricant for life (we can’t run without it) and banks control our money – banks unfortunately have a control of our life. Because of this, there needs to be a personal touch to your banking.
If you know anything about college football, you know that LSU and Alabama have a strong hold on the #1 and #2 spots of the BCS Rankings. Although subjective, there is little argument as to who is the best college football team in the county.
This is not the case when it comes to banks.
SNL Financial recently released their rankings for the Largest Banks in the United States. As previously reported, following Q3 earnings, JP Morgan Chase stole the #1 spot away from Bank of America. At first I thought of it as a congratulatory moment, but is it? If more deposits equals more loans and more loans equals more revenue, one could justify high-fiving; but should a bank strive to be in the same conversation as “Bank of Mexico” and “Walk-over-ya” (Wachovia). These banks don’t gain these nicknames as a “thanks for convenience,” rather as a result of them losing their personal touch.
“Good morning Mr. Smith” has slowly evolved into “I need to see your ID.”
I would guess that most of my readers have 1 account online, a few accounts at the local credit union, and maybe a small checking at a larger bank for convenience. Am I right, am I right?
Do you all think JP Morgan Chase should be ecstatic about their jump into the #1 spot?