Understanding the V word: Value- is it more than just dollars and cents?July 26, 2019
Author: Jay Laskar
The year is 2006. I am 23 years old. I know very little, think I know much more than I do, and I’m about to get a real-world education in the niche business of corporate Forex from one of the greatest (or worst depending on perspective) currency salesmen in the industry, at the time.
“Our euro is the same as a bank’s euro. Our pounds are just as good, as the pounds of the fanciest, Saville Row banker, in the poshest corner office, of the most gilded bank!”
Me: (Over-caffeinated, scribbling fantastically, nodding my head as though these are genuine pearls of wisdom)
“The only difference between OUR currency, and the currency from anyone’s bank, or some other broker, is what the client is willing to pay for it! When you sell a commodity, the Value of the good, is equal to its PERCEIVED value, or at least, the Value YOU bring, along with the product.”
Me: …so Value is more than just the price?
“Value IS more than just the price. For instance, imagine you talk to a prospective client, who you discover is paying 3% (markup in rate) with their bank, and they have to walk down to the bank to set up each payment. Is the prospect going to be more excited about the Price, or are they going to be excited about not having to deal with standing around at the bank, waiting to get a wire template made up by Johnny Banker’s Apprentice?”
Me: (looking around at the other shifty-eyed rookies, equally nervous) …I guess if we’re making their life easier, then they’d be willing to pay the same? Or maybe a slightly better price, but more convenient process?
“YES. Because the Value you’re bringing isn’t just that you’re going to improve their COST; you’ve also improved their payment process and saved them time. And don’t you think YOU will be better at learning their business’ needs, and the ebb and flow of payments than the random bank teller that happens to be working that day?”
Me: (feeling slightly more confident) Yes?
“And THAT is how you sell foreign currency. Find their pricing, find what they are REALLY looking for (modern sales books will call those “Drivers”), and then figure out what Value prop you can offer that ISN’T just the dollars and cents. Anyone can offer a better price at any time. In fact, you’ll find there’s always some [person] who’s willing to low-ball your clients. But if you know the Value you’re really bringing, your smart clients will know they have a good partner, and a trusted advisor.”
Flash Forward to 2019
The foreign exchange world has changed somewhat; the internet has ushered in a wealth of information and transparency that was previously never available. Consumers, who once had only yesterday’s news, or an old copy of the Wall Street Journal to benchmark their pricing, now have access to nearly instant data, in nearly the same timeframe as professional traders.
In other words, the information landscape has shifted, but for most banks and brokerages, the Value proposition hasn’t changed in over a dozen years! In fact, the foreign exchange departments of most banks still rely on the bait-and-switch tactics of yesteryear, compounded with a near feverish need to focus on the “customer relationship.” Why? Because they haven’t evolved. Their Value proposition is still rooted in the idea that you NEED their insight, that payments are anything more than inputting a few keystrokes in a 30 second transaction, that what they are doing is unique, and special. In reality, that’s simply no longer true.
Value in the modern age is simple: be honest, be transparent, and contribute to your clients’ successes. Do less “spinning.” Have fewer buzzwords, and more integrity. Maybe offer a transparent pricing model, backed by expert support from people that actually are in the know? Something like that. At the end of the day, it’s 2019- business has evolved. Value has evolved. Why live in the past?
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