Banks at some point in time started using the tool to safeguard themselves, resources and to prevent the illegal use of their resources and services by fraudulent clients. The process involves prospective customers filling out customized forms that record critical information about what they do, if they have previous criminal records, their financial standing, if they are Politically Exposed Persons (PEP) etc.
KYC is the process of a business verifying the identity of its clients - en.Wikipedia.org
Present day entrepreneurs have started using this as a tool for deeper market penetration, building loyalty with existing customers and even tapping into markets and niches that ordinarily was beyond reach or that would have taken a toll on their budget for adverts/promotions.
Majority of entrepreneurs do wide consultations/research before setting up their businesses. They do everything right from feasibility study to the actual setting up of the business and I tell you, that is the farthest most of them will go and this knowledge gap tends to place a limit on theor growth potentials.
Let us examine two scenarios and see how the concept of KYC could affect a business efforts.
The "Platinum" Purchasing Manager, Her "Gold" Daughter
During one of the business development training sessions I attending back then, a story was told of a high profile I.T. purchasing manager working with a blue chip technology company whose daughter needed a new laptop for her academic work. Her supportive mother decided to purchase a state-of-the-art laptop for her from her regular computer hardware supplier.
Back home, the daughter noticed some malfunctioning while setting up the system, she picked up the receipt, located the phone number and called the customer care help line of the laptop vendor. A little background check on the caller quickly revealed to the hardware company that they were online with the daughter of one of their high profile clients - a platinum customer for that matter and as a result this young lady automatically got rated a potential gold customer because of the rating of the mother.
The company intelligently apologized for the anomaly and sent a replacement laptop immediately with some freebies to pacify her. After a month time, she also received a call from the hardware company asking if she was satisfied with the transaction and they informed her of some software updates which she actually liked and additional sales was recorded that day by the company.
Clearly the vendor had accurate records of this platinum client and this knowledge had not only saved them embarrassment, it had deepened the relationship, earned them a new gold client and made more sales from that relationship chain.
That is how you use KYC as a marketing tool!
Tony The Underrated General Manager
I remember another encounter. This one was between my friend, a General Manager at a Micro Finance Bank and a Telecoms Call Center Operative. I was meeting with Tony in his office and suddenly he noticed that his call credit was below what it should be. He quickly placed a call to the call center of his service provider to notify them of his discovery. This time around unfortunately, the call center attendant was the type that responded like an automated response machine. She was so preoccupied with reciting the lines she had memorized that she failed to listen to my friend's complaint. How I wish that everyone would realize that customer is king.
Tony my friend was so shocked with the call centre representative performance that he had to place the call on speaker just for me to hear the shocking one-way conversation. If not for the occasional arguments that ensued between them, I clearly would have been fooled into believing that i was listening to an automated message.
My friend tried to intervene by explaining his problem but she would not listen and she eventually hung up on the General Manager after saying a quick "thank you for calling XXX call center, do have a nice day". My lower jaw dropped in total amazement! Could this really be happening in this modern day customer friendly business environment?
My infuriated friend had to call back and in anger introduced his professional profile and how much business he had attracted to the network. He went ahead to narrate the awkward conversation between him and the call centre operative which I was a privileged witness to.
Tony further expressed his dissatisfaction about the quality of service with a clear promise to leave the network within an hour with his over 200 staff which he made to patronize them, plus some micro-finance groups that used the Service Provider's CUG services, totaling almost 800 individuals.
What a loss of business! If they had gone the extra mile with Tony, they would have known that he is the type you won't regret treating like a Platinum customer which he was to them anyway.
Point of note in this story is, some customers are cash cows that pay your salary and contribute astronomically to keeping your business afloat by their patronage and simple wisdom demands that they should not be treated with levity. Also no business is too well established to ignore the aforementioned guidelines because one dissatisfied customer could cause unimaginable damage.
HOW TO DEVELOP A KYC DATABASE
To develop a KYC database, you want to capture as much customer information as possible. This should not just be a one-off project. A designated customer service staff should update these records regularly to maintain a high level of business data integrity. There are several reasons for this. One important one is that customers character as it relates to patronage is dynamic.
Essentially you want to record as much as possible on an ongoing basis the KYC details of your customers which will include;
personal/professional/business profile
buying pattern and transaction history
possible sources of funding
net worth
hobbies, where they hangout, who they hangout with
religion
suppliers, distributors, agents, outlets
have a clear understanding of their business
know their bankers, lawyers, insurance people
know their choice of alternative products and then reason for these alternatives
know what they think of you and your offerings...
Benefits Of The KYC Tool
I feel ashamed now to say this as a business development consultant. I should not have overlooked this opportunity which starred at me in the face for years begging to be tapped, but for the sake of my dear readers like you, I must do the right thing. I will say it.
My dear wife runs a beauty makeover outfit, you know ladies kind of stuff. Anyway, I never thought of using the KYC tool on her for my benefit, little did I know that I was missing out on a very viable niche. Using the tool on her business open up a world of surprises as my clientele base increased beyond my expectations within a short period. Now listed below are some of the benefits I derived from taking the right step.
increased reach to customers
tapping into new markets
selling more to a particular client
inheriting the clients personal network with little or no effort.
As a result of the type of service she provides, I get to meet and connect with business women from various fields.
Make your customer's customer your customer.
Important KYC Questions
Honestly answering these questions below will not only get you ahead in your business, but it will change your business rating no matter what you do or where you do it. You can make a difference where others fail if you dared to go beyond just knowing your customer's gender, age, geographical location etc.
The more you know about your customers, the stronger the connection and ties formed between them and you and your business. Never forget that some customers buy as a result of sentiments.
Now, how knowledgeable are you about your customer's
business
needs and uses of your products / services
buying pattern (when, who, why,...)?
personal needs
professional needs
attitude towards you and your product/services
customer
investment and risk profile
Connect with KYC
This is not as complex and difficult as it sounds. To better market and sell to a customer/prospect, you need to get into their mind and psychology. You could study the psychology of buying (..coming out soon)
1. It pays to genuinely love people. Spend quality time with them and participate in their lives.
2. Connect with them in whatever way possible. You should seriously consider what is trending - Social Media. This "technology's gift" to mankind is used by some people for trivialities and vanity, but it is a potentially powerful study/survey tool.
Use it for those who "like" you and observe the commentary they make about their daily lives and create ways to make them better. Facebook, twitter, etc... can be used for more than broadcasting. You can reach out and ask questions about their lives via these social network.
Competitive Knowledge
Through the instrumentality of KYC you can further know
who your competitors are
what your competitors' strenghts and weaknesses are
how your customers view your competitors
how your competitors market and sell their products/services.
Quality customer service is a key tool for business development, but it is inconclusive without employing the KYC tool.
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