Customer Relationships Banking and Financial Services Finance Lesson Plan
Performance Objective Students will understand the importance of building and maintaining positive customer relationships to enhance banking opportunities and profitability. Specific Objectives  Students will understand and apply various selling techniques.  Students will demonstrate the importance of relationship banking. Terms  Event‐based selling‐ selling products or services appropriate for certain life events as well as selling at physical community events  Relationship banking‐ a banking attitude that encourages long‐term customer relationships, whether personal banking or commercial banking, with the goal of increasing profits  Cross‐selling‐ selling products or services related to those that a customer already has  FFIEC‐ Federal Financial Institutions Examination Council  Redlining‐ the process of denying or charging higher rates or fees for banking services in certain racially‐designated areas; prohibited by the Community Reinvestment Act of 1977  OCC‐ Office of the Comptroller of the Currency  FRB‐ Federal Reserve Board; monitors compliance with the Community Reinvestment Act (CRA)  OTS‐ Office of Thrift Supervision; also monitors compliance with the Community Reinvestment Act (CRA)  CRA‐ Community Reinvestment Act; promotes banking services to communities Time When taught as written, this lesson should take approximately four to five class periods to complete. Preparation
TEKS Correlations This lesson, as published, correlates to the following TEKS. Any changes/alterations to the activities may result in the elimination of any or all of the TEKS listed. 130.163 (c) Knowledge and Skills (4) The student determines client needs and wants and responds through planned, personalized communication to influence purchase decision and enhance future business opportunities in banking services. The student is expected to: (A) describe the importance of selling in the banking industry; (B) demonstrate cross‐selling bank products and services; (C) demonstrate the relationship‐selling process; Copyright © Texas Education Agency, 2013. All rights reserved. 1 (E) conduct mock calls on small business clients; (G) describe the nature of event‐based selling; and (H) plan a sales campaign. (7) The student creates and maintains positive, ongoing relationships with banking customers in order to enhance the organization’s image. The student is expected to: (A) foster positive relationships with customers to enhance company image; (B) discuss the importance of meeting and exceeding customer expectations; (C) describe the relationships that institutions providing banking services have with their communities, and (D) manage a profitable investment portfolio to build customer relationships, including selection of customers for portfolios using established criteria that support the institution’s business goals. Interdisciplinary Correlations: English‐English I  110.31(b)(1) understand new vocabulary and use it when reading and writing  110.32(b)(11) understand how to glean and use information in procedural texts and documents  110.31(b)(11)(B) analyze factual, quantitative, or technical data presented in multiple graphical sources Social Studies‐World Geography  113.34(c)(20)(A) describe the impact of new technologies, new markets, and revised perceptions of resources Occupational Correlation (O*Net – www.onetonline.org/) Job Title: Sales Agents, Financial Services O*Net Number: 41‐3031.02 Reported Job Titles: Investment Officer, Financial Services Representative, Client Manager Tasks 
Contact prospective customers to present information and explain available services. 
Make presentations on financial services to groups to attract new clients. 
Develop prospects from current commercial customers, referral leads, or sales or trade meetings Soft Skills  Time Management  Persuasion  Active Listening Accommodations for Learning Differences It is important that lessons accommodate the needs of every learner. These lessons may be modified to accommodate your students with learning differences by referring to the files found on the Special Populations page of this website. Copyright © Texas Education Agency, 2013. All rights reserved. 2 Preparation  Review and familiarize yourself with the terminology and website links  Take a look at the lesson materials and PowerPoint presentation. References  Center for Financial Training. (2003). Banking and Financial Systems. Indepdence, KY: Cengage.  http://www.occ.gov/topics/community‐affairs/index‐community‐affairs.html  http://www.mymoney.gov/  http://www.fdic.gov/consumers/community/  www.occ.gov/topics/compliance‐bsa/cra/index‐cra.html  www.fdic.gov/regulations/laws/rules/6500‐2515.html  www.ffiec.gov/cra/default.htm Instructional Aids  Lesson Presentation  Instructor Computer/Projection Unit  Online Websites Introduction
The main purposes of this lesson are to help students understand the following concepts:  The importance of positive customer relationships  The importance of getting to know the customer and his/her financial needs  The different techniques for selling banking products and services  Ask students if they know that there are different sales techniques when it comes to financial services.  Ask students if they know how important effective selling is to the profitability of a financial service provider.  Ask students, who have a checking account, if they can describe the sales technique(s) used to obtain their business. Copyright © Texas Education Agency, 2013. All rights reserved. 3 Outline
I. II. III. What do banks sell? A. Banking products 1. Retail banking services a. Checking and savings accounts b. Credit cards c. Loans 2. Insurance B. Financial services 1. Retirement products such as IRAs 2. Stocks, bonds, mutual funds C. Relationships 1. Promotes trust 2. Potential profit 3. Additional business What is relationship banking? A. A banking philosophy B. A marketing philosophy C. Goals: 1. Establish long‐term customers 2. Increase customer base 3. Increase business D. Reduces costs of obtaining information with repeat customers E. Builds customer loyalty F. Builds company reputation G. Used primarily with small‐ to medium‐sized banks but spreading to large banks Customer Expectations A. Money in a safe place Locate bank advertisements either in the newspaper or online. Have students review different ads and determine what a common theme might be. They will probably respond with “attracting customers.” Banks use many special offers and rewards to attract customers and expand the business from their current customers. Relationship banking involves building the public image of the bank, providing excellent customer and community service, thus increasing employee morale and profitability of the bank. Discuss different types of situations that happen between customers and a bank. For example, long lines in the drive through, waiting for a teller to finish a long transaction, a receptionist on a personal phone call, or even a customer complaint. In pairs, have students choose a scenario or create their own, and instruct them to demonstrate a role‐play of good versus poor customer service. Multiple Intelligences Guide
Existentialist Interpersonal Intrapersonal Kinesthetic/ Bodily Logical/ Mathematical Musical/Rhythmic Naturalist Copyright © Texas Education Agency, 2013. All rights reserved. 4 Verbal/Linguistic Visual/Spatial Convenient access to money Highest possible return on investment Relationship with the bank D. IV. Building Community Relationships A. Community Reinvestment Act (CRA) B. Federal Financial Institutions Examination Council (FFEIC) C. Public relations and Marketing 1. Provides a great deal of personal contact with customers 2. Sales campaigns V. Community Reinvestment Act of 1977 A. Promotes banking services to communities B. Extends credit to community members C. Prohibits redlining: 1. 1960s‐ banks would not invest money in racial areas 2. later‐ banks may charge more for banking services in those areas D. D. Monitored, evaluated, and examined by the OCC, FRB, OTS, and FDIC VI. Federal Financial Institutions Examination Council (FFIEC) A. Established in 1979 B. Charged with enforcing standards and conducting examinations of financial institutions along with the appropriate agencies that supervise these institutions FFEIC’s Consumer Help Center‐
click on a topic and view the answer or explanation. Direct students to the following web site: http://www.occ.gov/tools‐
forms/tools/compliance‐bsa/cra‐
perf‐eval‐search.html Have students search (in pairs) for banks with Outstanding OCC Performance Evaluations regarding CRA compliance. See if there are any in your community. Multiple Intelligences Guide
Existentialist B. C. Interpersonal Intrapersonal Kinesthetic/ Bodily Logical/ Mathematical Musical/Rhythmic Naturalist Copyright © Texas Education Agency, 2013. All rights reserved. 5 Verbal/Linguistic Visual/Spatial VII. Public Relations and Marketing Types of Selling: A. Event‐based selling 1. Selling based on life events such as: a. Marriage b. Children c. College d. Retirement 2. Selling at community events: a. Grand openings b. Company anniversary events c. Holiday gatherings B. Cross‐selling‐ selling products or services related to what a customer may already have. 1. If customer has checking, offer savings 2. If customer has savings, offer money market C. Up‐selling‐ selling an upgrade of a product or service that may have more risk but can provide higher reward; may cost more 1. If customer has savings bond, offer stock investing 2. If customer has IRA, offer stocks or mutual funds D. Cold‐calling 1. Can be used to invite potential customers to community events 2. Used mainly to promote personal financial investment services
Discuss the various types of life events or life changes that people go through. They may say buying a car or house, having a baby, or retiring. Write the suggestions on the board. Then discuss what types of financial services people in the different categories would prefer. Write those responses underneath the appropriate life event. You can also ask a student to volunteer drawing lines on the board connecting the various services that may be considered as cross‐selling or up‐selling. Students can then make the connection with the many types of services available to many different types of customers. Ask students if they have ever received telemarketing phone calls at home. Get their feedback as to what they think of these calls and what they would do if they had to make calls to customers or potential customers. Multiple Intelligences Guide
Existentialist Interpersonal Intrapersonal Kinesthetic/ Bodily Logical/ Mathematical Musical/Rhythmic Naturalist Copyright © Texas Education Agency, 2013. All rights reserved. 6 Verbal/Linguistic Visual/Spatial E. Existentialist Online banking 1. Less personal contact 2. More convenient a. Offers many services b. Ease of access 24/7 3. Requires a user‐friendly approach a. Assistance available if needed b. Ease of navigation c. Customer‐friendly language (terms) VIII. Launching a Sales Campaign A. Research 1. Target market and their needs 2. Campaign costs versus profit goal B. Leads 1. Current and past customers 2. Conduct surveys 3. Purchase lists C. Training 1. Staff training about the process 2. Training about products and services offered D. Tracking process 1. Track customers (how many are new) 2. Track sales (products and services) IX. Utilizing Social Media in Sales A. Websites
Interpersonal Intrapersonal Kinesthetic/ Bodily Logical/ Mathematical Musical/Rhythmic In pairs, have students search for several different financial institution websites. Then have them address the following features on the left. Then ask them to rank the sites. Ask a student to record first, second, and third place choices on the board and tally the responses. The PowerPoint presentation mentions the process of the “Four Ps” of marketing. Discuss the products they (or their parents) buy and address each of the “Four Ps” for a particular product that is popular among them. Explain that any effective customer relationships include practices such as personal contact, sending literature that is concise with a catchy format, follow‐up phone call, and thank you notes after a meeting or contact by mail or phone call. Naturalist Copyright © Texas Education Agency, 2013. All rights reserved. 7 Verbal/Linguistic Visual/Spatial X. Existentialist Interpersonal B. C. Social networks 1. Facebook 2. Twitter 3. LinkedIn Requires more personalization due to lack of face‐to‐face contact Managing a Customer’s Investment Portfolio A. Customer should: 1. Make a list of what they own 2. Make a list of what they owe 3. Consider components of a portfolio 4. Pay off high‐interest debts B. Banker should: 1. Help determine customer’s financial goals 2. Make frequent customer contact a. Provide easy‐to‐use tools b. Follow‐up phone calls c. Paper notifications d. Face‐to‐face meetings e. Show progress Intrapersonal Kinesthetic/ Bodily Logical/ Mathematical Musical/Rhythmic Ask students what they think social media attempts to do to attract customers. Answers may include offering specials on different banking services or trying to make connections with people by relating to them through social media. Positive customer relationships do not end after the transaction is made. Emphasize the importance of maintaining the customer relationship. Not only does this contribute to a positive public image for the business, but it also creates repeat business from current customers and increased business from new customers. Relationship banking also includes a trust component. The customer trusts that, in the case of managing an investment portfolio, the banker will have the customers’ best interest at heart and make appropriate decisions on the customers’ behalf. This involves good advice as well as frequent communication. Naturalist Copyright © Texas Education Agency, 2013. All rights reserved. 8 Verbal/Linguistic Visual/Spatial Application
Guided Practice Have students draw four squares on a piece of paper (approximately 2X2) and write the following phrases on the top inside of each box: Relationship Banking, Community Relationships, Types of Selling, and Sales Campaign. As the teacher goes through the PowerPoint presentation, the students will take notes as the above four topics are discussed. After the presentation is completed, the students should exchange their “Four Squares” with their “shoulder partner.” They should then discuss each square, one at a time, and write down the notes that their partner may have missed on their squares. Ask them to return their partner’s “Four Square” document when finished. Independent Practice  Students should each make a chart or table listing at least five different target markets and to which ones they belong.  Students can write an exit ticket stating something they learned about cross‐selling or up‐selling that they did not know before the lesson. Summary
Review Ask students the following questions on exit tickets or using a matching activity.  Question #1: Are banks in the business of selling? o Answer #1: Yes. Banks have products and services to sell as well as relationships with the bank.  Question #2: What is relationship banking? o Answer #2: It is a philosophy of creating long‐term customers through having a “personal banker” who can meet a customer’s financial needs and still create a profit for the bank.  Question #3: Which agency conducts examinations of banks to see that they are in compliance with the Community Reinvestment Act? o Answer #3: The FFIEC, Federal Financial Institutions Examination Council  Question #4: What is the sales technique of selling products or services related to what a customer may already have? o Answer #4: The technique is called cross‐selling.  Question #5: True or False. Tracking customers and the products/services sold are not a part of the sales campaign process. o Answer #5: False. It is an important part as it can serve as a measure of the success of the sales campaign. . Evaluation
Informal Assessment Any and all of the following can be used as informal assessments:  Exit tickets with vocabulary Copyright © Texas Education Agency, 2013. All rights reserved. 9 
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Pair‐share activities Class discussion and participation Formal Assessment  Community Reinvestment Act Research Assignment #1‐ Students will conduct research on their city. They can type in «city search data and (city name)» in the search box of a search engine. Locate the number of financial institutions in their city and notice the demographics of their city. Then search for a city that seems to have a totally different demographic from their own city. Students will create a table that compares demographic percentages for each city, geographic location, as well as the numbers of financial institutions, or percent of financial institutions, in each city. At least two other specifics that the student feels are important to compare can be included (such as median household income, average home price, or violent crime). Students should write a summarizing statement explaining their opinion on whether or not they feel there is a fair distribution of financial institutions in the two cities compared and the types of financial services that the student feels would be most appropriate for the cities researched.  Sales Campaign Assignment #2‐ Students are to create a sales campaign for a grand opening of a fictitious bank. This campaign will contain several documents. First, the student creates an outline detailing the steps of the plan (using the presentation slide as a guideline) identifying the “Four Ps” of marketing. Second, create an attractive flyer that would be mailed out to community members (potential customers) including pertinent facts such as the name of the bank, the date of the grand opening, the times, the activities for individuals, families, and kids, contact information in case they would like more information, and possibly a special product offering, prize, or contest. The third document is a thank‐you note to your customers. Address them by name, mention something you remember about them, thank them for attending the grand opening, and provide contact information as well as an upcoming promotion or event.  Community Outreach Venn Diagram Assignment #3‐ Students will conduct Internet research and locate three banks or financial institutions that participate in various community outreach activities or programs. The institution name and URL will be included in each of the three circles. Also included will be a listing or description of at least three different programs. In the center overlap of the three circles will be an activity or program that is the common to all three institutions. This Venn diagram can be created on poster board, flipchart paper, or on the computer. Enrichment
Extension Have students interview a manager of a local bank regarding what programs they offer to the community to promote “relationship banking.” Ask the representative if they are familiar with the Community Reinvestment Act and if so, what programs they have that would meet the compliance for this act. Create a presentation displaying your findings. Copyright © Texas Education Agency, 2013. All rights reserved. 10 Customer Relationships Community Reinvestment Act Research Assignment #1 Student Name ______________________ CATEGORY 20 15 8 Required Elements At least five different city comparison criteria are included in the table. Three to four criteria are included in the table. Only two criteria Less than one are included in the criterion are table. included in the table. Content ‐ Accuracy All content throughout the table is accurate. There are no factual errors. Most of the The content is Content is typically content is accurate generally accurate, confusing or but there is one but one piece of contains more piece of information is than one factual information that clearly flawed or error. might be inaccurate. inaccurate. Spelling and Grammar Table has no misspellings or grammatical errors. Table has one to two misspellings, but no grammatical errors. Appearance Table is Table is adequate Table is slightly exceptionally neat in neatness and difficult to and well‐
organization. comprehend. organized. Table is unorganized and very difficult to understand. Summary Statement Student summary statement shows exceptional understanding of topic. Student summary statement either missing or shows little, if any, understanding of topic. Student summary statement shows adequate understanding of topic. Table has one to two grammatical errors but no misspellings. Student summary statement shows inadequate understanding of topic. Maximum Points Possible: 100 Student Points: _________ Copyright © Texas Education Agency, 2013. All rights reserved. 11 1 Table has more than two grammatical and/or spelling errors. Customer Relationships Sales Campaign Assignment # 2 Student Name ______________________ CATEGORY 20 15 8 Spelling & Proofreading No spelling errors. No more than one No more than spelling error. three spelling errors. Attractiveness & Organization The flyer has exceptionally attractive formatting and well‐organized information. The flyer has attractive formatting and well‐organized information. The flyer has well‐ The flyer's organized formatting and information. organization of material are confusing to the reader. Four Ps of Marketing The sales campaign outline clearly addresses each of the “Four Ps” of marketing. The sales campaign outline addresses three of the “Four Ps” of marketing. The sales campaign outline addresses two of the “Four Ps” of marketing. The sales campaign outline addresses one or none of the “Four Ps” of marketing. Thank you note All of the elements Thank you note necessary for a contains most of professional, well‐ the required written thank you elements but is note are included. missing one or two. Thank you note only contains a couple of pertinent items. Thank you note is cold and contains no elements of a positive customer relationship. Cohesion All three documents are related to each other and effectively support the sales campaign. All three One document documents are may be missing complete but may but other be slightly documents do inconsistent with relate to each each other relative other and the to the sales sales campaign. campaign. 1 Maximum Points Possible: 100 Student Points: _________ Copyright © Texas Education Agency, 2013. All rights reserved. 12 Several spelling errors in the documents. At least one document is missing or remaining documents show no cohesion to sales campaign. Customer Relationships Community Outreach Venn Diagram Assignment #3 Student Name ______________________ CATEGORY 20 Required Elements The diagram includes all required elements as well as additional information. 15 8 All required elements are included on the diagram. All but one of the Several required required elements elements were are included on missing. the diagram. Labels All items of Almost all items of importance on the importance on the diagram are clearly diagram are labeled. clearly labeled. Mechanics Capitalization and There is one error There are two punctuation are in capitalization or errors in correct punctuation. capitalization or throughout the punctuation. diagram. Several items of importance on the diagram are clearly labeled. 1 Labels are too small to view OR no important items were labeled. There are more than two errors in capitalization or punctuation. Use of Class Time Used time well Used time well during each class during each class period. Focused on period. Usually getting the project focused on getting done. the project done. Used some of the time well during each class period. There was some focus on getting the project done. Did not use class time to focus on the project OR often distracted others. Attractiveness The diagram is acceptably attractive though it may be a bit messy. The diagram is distractingly messy or very poorly designed. It is not attractive. The diagram is exceptionally attractive in terms of design, layout, and neatness. The diagram is attractive in terms of design, layout, and neatness. Maximum Points: 100 Student Points: _______ Copyright © Texas Education Agency, 2013. All rights reserved. 13