I recently had the opportunity to steer a* very* large deposit to our local branch of a big national bank. We’ve been customers a long time and they’ve always treated us fine. The money would not be there for long, and it would be parceled out to a variety of people and entities over about a month.
I understand why the bank, as a business, would be happy to have such a large sum, even for a short time. I’m wondering, however, why the individual employees (branch manager, regional manager, etc) were so damn appreciative. They were falling all over themselves to make sure I was happy, and to let me know how grateful they were for the business. I can’t believe they get a “commission” in the ordinary sense. Anyone have an idea about how their employer would reward them for something like this?
By being nice to you, it means you’ll come back the next time you have a big deposit. If they weren’t, you wouldn’t come back, and you might even change your mind about this deposit.
The “bonus” is that if they treat you this way, they don’t get fired.
Agreed. Plus, I imagine the bank employees have been told many, many times about the importance of accommodating customers with large deposits. However, they may not be considering the duration of said deposits.
While I doubt that anyone gets a straight commission on deposits, I wouldn’t be surprised if the bank tracks total deposits, etc. for each branch, and in part evaluates managers on how well they get that number up.
So, my guess is that the managers were sucking up to you because, while they didn’t get a direct commission, the large deposit does make them look good to their bosses.
Back when I worked for a large bank system (in Payroll & Personnel), branch bank managers were classified into pay grades based partially on the total funds on deposit at that branch. So such an account might increase the chances that they get upped to the next pay grade. Or transferred to a larger branch.
Also, managers were frequently evaluated on their branch: was it ‘growing’ (more customers, more accounts, more $ on deposit) or ‘shrinking’. For a smaller branch, such an account might show as a substantial growth in total funds on deposit.
Managers were also evaluated on profitability. Such an account – large balance, fairly inactive, only a few transactions over several months – is a very profitable one.
And bankers were rewarded for increased business (new accounts, car loans, mortgages, credit cards, etc.) from existing customers (makes it harder for the customer to switch to another bank). This account would show up as significant new business from an existing customer.
So those are several ways that this account would show up very well in their next performance evaluation. No wonder they were grateful to yo.
Chase bankers get what they call “PVCs” which earn them bonuses for selling you products. Here is a description of what it is like working there. I’m sure it’s not a lot different at other large banks.
Some former Chase and WF bank employees have posted sarcastic youtube videos describing what it is like working there. I am putting it in a spoiler box because most of them contain some NSFW language. (DDA = Demand Deposit Account, a checking account):
I hate going into the bank branch because the tellers are always trying to sell me stuff. I feel bad for the folks who are forced to do this, but that’s why the big conglomerates make so much money, I guess.
*"Upselling (sometimes “up-selling”) is a sales technique whereby a seller induces the customer to purchase more expensive items, upgrades, or other add-ons in an attempt to make a more profitable sale.
Upselling usually involves marketing more profitable services or products but can also be simply exposing the customer to other options that were perhaps not considered previously. …"*
Fair enough, but one could argue the USPS is offering a value added service. Delivery confirmation of your parcel is a useful service. Insurance on your valuable item is a useful service. A savings account for someone who lives paycheck to paycheck or a credit card for someone with shitty credit? Not so much.
Why do believe they don’t get a commission? Also, did you tell them that the money won’t be there for long? Because if you just dump the money, of course they will assume they can sell your all their products, and most bank employees do get commission on those. (At least in Germany, some people were rather upset when a report revealed that most people inside a bank are no longer permanent employees, but rather freelancers working on a commission basis - and with a least of the slow-going products to push on the unwary, with more commission on those).
And don’t underestimate how much money a bank can make from a big sum parked even for a month only.