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Replacing customers pricey for banks

By Claes Bell, CFA · Bankrate.com
Thursday, January 3, 2013
Posted: 4 pm ET

When you're waiting on hold with a call center or facing a recalcitrant teller insisting he would love to help you but he just isn't allowed to handle your issue, it's easy to forget that as a bank customer, you have value.

No, I'm not talking about what I'm sure are many outstanding qualities you undoubtedly possess as a human being, but actual monetary value.

Signing up customers for new accounts costs banks money -- quite a bit, actually. Not only do they spend money on advertising and promotion to get customers in the door in the first place, but they also have to pay people to fill out and process your application, as well as other costs.

According to an October report by banking technology provider Andera and CorePROFIT, a banking industry consultancy and research firm, it costs community banks about $220 to sign up a customer for a checking account at a branch. For credit unions, the numbers are also eye-opening. It cost an average of $442 to attract each new member in 2012, according to Callahan & Associates.

The cost to acquire new customers may be marginally higher or lower at the big national banks, but the point remains the same. If you close your checking account, replacing you will cost hundreds of dollars, so your bank may want to cut you a little slack on your $30 overdraft.

That may be why, at least in my experience, escalating a complaint with a bank tends to get better results than dealing with rank-and-file customer service representatives. Managers probably have a better sense of the big picture when it comes to their business, and may work harder to keep a customer that they know will generate hundreds or thousands of dollars' worth of revenue than a CSR who likely makes the same paycheck, regardless of how many customers close their accounts.

So, the next time you're negotiating over bank fees, some misplaced money or another issue, remember you have a couple hundred dollars' worth of extra leverage behind you.

What do you think? Does your bank treat you like a valuable commodity or a white elephant? How do you bargain with banks?

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19 Comments
Mark
January 05, 2013 at 10:50 pm

Keep some extra in your account and those overdraft fees won't occur??!! We are all strapped these days, but planning to pay those bills will make things a lot easier.
Yea, I think the banks take advantage of everyone, but we all have to take a little personal responsibility in our fiscal life.

Bill
January 05, 2013 at 10:00 pm

Hey Jon Schmitt:As long as you are docile enough to allow the bank to use your money while treating you as a beggar- they should continue to do so--In fact they should....maybe pee on your boots every once in a while-just to see how much abuse you will take.

joel
January 05, 2013 at 9:20 pm

We bank with Olympia Federal Savings Bank and all their staff are super. Even better than the credit union which we also like!

Bill McC.
January 05, 2013 at 8:19 pm

Wells Fargo is the worst! No Customer LOYALTY! Homeowners get NO HELP Modifying underwater LOANs? Wells Fargo says your Home LOSING 50% of VALUE is not a PROBLEM worth their HELP! Never had late payment.,LOAN underwriter says "bailout" for Homeowners like us is not on their things to do LIST!

Juan
January 05, 2013 at 7:56 pm

I don't think this is something that will have much relevance. I will try it with a back up plan just in case.

Jack Sprat
January 05, 2013 at 7:44 pm

Hey Jon... Maybe you should actually follow up and check your account before paying those bills. Ignorance is not a valid excuse.

Ann Amose
January 05, 2013 at 6:11 pm

MR Claes Bell: What's the big deal with you folks stating it cost banks money to sign up. What the heck are these bank folks doing other wise. Sitting around just collecting a pay check. This has been a known fact for years are you one of the younger generation that just stumble on to this cost. Your advise sucks.

Jon Schmitt
January 05, 2013 at 5:21 pm

Woodforest is absolutely the worst bank i have every done business with. My pay is direct deposited and sometimes it is there on my regular payday, sometimes 2 days later. My company says they do direct deposit payroll the same day and time every week. This has cost me overdraft fees because i have paid bills by debit card thinking my money was available. I have called the bank and after getting put on hold for 10 minutes, they always basically tell me tough luck!

Jon
January 05, 2013 at 5:18 pm

Woodforest is absolutely the worst bank i have every done business with. My pay is direct deposited and sometimes it is there on my regular payday, sometimes 2 days later. My company says they do direct deposit payroll the same day and time every week. This has cost me overdraft fees because i have paid bills by debit card thinking my money was available. I have called the bank and after getting put on hold for 10 minutes, they always basically tell me tough luck!