A question of trust: what do our trust clients and prospects want? You may think you know the correct response when you market trust and private banking services. But do you really?

Trust and private banking departments today are out of touch with what clients and prospects want. Undoubtedly, some of you consider this idea heresy. But hear me out.

Consider these three premises:

1. We are in the retail advice, counsel and personal attention business, not the whole-sale transaction business. But you'd never know it if you sat in on a typical budgeting session or management meeting. The focus is on volume, cost-cutting and usually technology. The product and its delivery, and advice and counsel--not to mention the improvement thereof--are seldom discussed.

Yet if you question my contention that we are in the advice and counsel business, consider the matters on which we're sued: Late statements? Last year's technology? No. Poor or insufficient advice, counsel and personal attention. That's what our clients come to us for. But, too many of us don't know that's what we sell.

To modify a lyric by the late John Denver, "Peace of mind is why I came here in the first place. Peace of mind is now the reason I must go." Please consider this scenario: A faintly entrusts its entire financial present and future to a private bank, frightened by how complicated navigating financial waters is, but hoping that professionals with time and expertise can take care of everything. Then, after the "honeymoon," telephone calls are not returned, sometimes for several days--unless the family initiates a call to the trust department. And then, one day they ask their investment counselor if they still held an issue that had fallen dramatically in recent weeks and the counselor replies, "I don't know." Then a statement arrives after a quarter during which they hadn't once heard from the bank, and there is a $4,000 fee. Clearly this was a very profitable relationship for the bank. It soon becomes a former relationship, Do you blame the family?

On the other hand, let me submit to you that those clients who do enjoy the aforementioned peace of mind--the sense that they are "doing the right thing"--seldom care much about fees or even short-tern investment performance.

You see, money is a frightening and emotional issue, a point demonstrated by the fact that the subject often makes its way into our pop culture. Henny Youngman once quipped, "I've got all money I'll ever need, if I die by four o'clock." And Jackie Mason echoed with, "I have enough money to last me the rest of my life, unless I buy something." Both elicit a kind of nervous laughter.

But do we run our in recognition of that nervousness and need for hand-holding? Not often enough. Which leads to my second point.

2. Quarter-to-quarter earnings focus, with management compensation tied to current year's earnings, will doom the building of the franchise. We are in the business of developing long-term relationships based on confidence and trust between client and employee. That requires investment, the return on which will not be in the current fiscal year, not to mention current quarter.

But what does any self-respecting division executive who wants a bonus and job longevity do every year? Raises the revenue goals and slashes expenses. Stated another way, executives on the basis of 10-or even five-year earnings, and watch the approach change in a minute-and-a-half!

3. We have been operating on the assumption that we know what our clients and prospects want and value in a relationship with us. But do we? Are we sure? I decided that in-depth research on those subjects was long overdue. So I did some. My criticism of our delivery model is based upon three things. First, that research. Second, I've been in the sausage factory. You know what they say: People who have been seen how sausages are made won't eat them. I've seen the service models, and I am not sure the norm is good for the client. Third, I have my own experience as s former trust department client. More client and prospect research will put us on track. As Thomas Peters of "In Search of Excellence" fame put it, "In every instance, we found that the best run companies stay as close to their customers as is humanly possible."

We are flying blind. We have little knowledge about what the market wants in its own words. Most of our employees and management are not clients, so they have no firsthand sense, and so they just assume, assume, assume ... and keep on keepin' on.

Redesigned marketing techniques

So where are we? I've suggested that we don't realize we're in the retail advice and counsel business, that quarter-to-quarter earnings focus dooms franchise building and that we don't really know our market and what the customers want. Having said all that cheery stuff, here's what I advise.

Worship customers as well as prospects.

Peter Drucker once said, "There is only one valid definition of business purpose: to create a customer." Your most valuable assets are your customers--even though they don't appear on your balance sheet.

Speaking of financial statements, look at your income statement. The top line, the biggest number of all, the revenue number--the number from which all expenses are paid and from which all profit results--is provided by ... your customers. Yet there is an alarming lack of attention to retaining and protecting those very important assets, probably because employees haven't had an income statement explained to them!

A major study at the Harvard Business School proved conclusively, and I suspect that you have heard this fact, that customer loyalty is the single most important determinant of market share and profitability.

I don't think he went to Harvard, but Sam Walton, founder of Wal-Mart, drew the same conclusion when he said, "There is only one boss: the customer. And he can fire everybody in the company, from the chairman on down, simply by spending his money somewhere else."

Use innovative research to retain (and acquire) customers.

I advocate research to ensure that we are providing what the client and prospect want. But not the same old ... same old data that tell you how many millionaires live on Park Avenue between 81st and 83rd streets. We need to find out what they want, what service model would make them fervently loyal. Hence my use of the word "innovative." Eliciting such information from people who may have yet to conceptualize what they want is not as difficult as it may seem: 1. You need only a few dozen responses, as long as they are in the target market. 2. Skip mail and phone and do it in person, because: 3. The easiest thing in the world to do is to get wealthy people to talk in the first person about their fears and wishes. Trust (no pun intended) me.

Ask clients and prospects all you dare, about what matters, fears, wishes, service standards, what annoys them, what tickles them, why they would or wouldn't come to you and stay with you. More on what might happen with such research in a moment.

Research done exclusively for your company is the best. It's expensive, but it will give you a competitive advantage. Take the money from your advertising budget if you must. You'll get a far better return. If you can get your customers to tell you what they want, what they will pay for it and what it will take to make them stay with you, and then turn around and deliver it. How can you lose? (This is no commercial. I don't want to do your research or sell you mine.)

Remember, the research is an investment in your customers and prospects, which is the same as saying you are investing in your revenue stream, which ultimately accounts for all of your expenses and all of your profits.

Be ready to adopt what the market defines as the formula for success.

Let's say I convince you to research those people whose financial lives you manage and would like to manage. Let's further say that you go to the market with appropriate research methodology to find out what people in today's target market look like, if you will, and--most importantly--what really matters to them. (By appropriate methodologies I mean one-on-one research, not focus groups; in focus groups the dominant personalities take over and your data is therefore no good.)

Here's what I suggest you might find if you were willing to profile a couple in today's target market: Ages somewhere between their 30s and 50s. Worked hard. Amassed a huge amount of liquid wealth--say $2 to $3 million--by their standards. Became very good at what earned that money and never became very good at preserving or protecting it. Haven't a clue about asset allocation, risk management, tax avoidance, estate planning, education planning or generation skipping (nor should they). Have neither the energy nor the ability to make it again so, as a result, they fear that they will lose money or not grow what they have as much as possible.

They hate the tax man. They have loved ones whom they want to be secure and comfortable, but they don't want money squandered. They are somewhat computer literate but prefer the personal touch. They hate voicemail too. They've been in senior positions and are used to being treated as if they are important; that is, they're used to getting through to a human being right away. They want to buy peace of mind, and within suprisingly wide limits, price is not an object. That couple could be a prospect or a client. If they are or become a client, with today's typical service delivery model, that couple could well become a former client as well.

Now, let's say you talk to these people and you get the following responses: They tell you that price is fifth or sixth on their list of importance, and that they've had technology up to here and want the human touch. They're smart enough to know what they don't know, and they say they're concerned about things such as "tax laws that they don't know about--not to mention understand--as to impact on them. (There are 6,000 IRS regulations concerning distributions from IRA's.) They worry about loopholes and oversights in wills and trust instruments that can lead to successful challenges. They care less about short-term investment performance than about asset allocation and risk (once the terms are explained) and their long-term financial well-being.

Mostly they want a series of lengthy meetings in which someone asks them question after question about facts and wishes, and explains options in plain English, not jargon. (If you use jargon, no prospect wants to appear stupid by asking what a term means, so at the end they say, "We'll think about it." and go away forever.)

Then, after a plan is proposed and adopted, they want to be approached regularly with, "We have been looking at and thinking about your situation and want to fast ask if anything has changed or might change that could affect your financial situation and, second, to suggest that you should know of such-and-such and consider this or that."

Would you adopt what the market has just served up as your strategy and formula for success? I hope so, because here is what the market is saying:

* High touch, admittedly high-cost/price delivery of expertise--advice, counsel and personal attention initiated by the bank officer, not the client's call--and a bank officer whose account load is not prohibitive.

* Recognition that the client may not have the questions, not to mention the answers. I asked some fellow parents what a 529 is and almost no one knew. One thought it's a household-cleaning product. Why shouldn't he think that? He's a (very wealthy) plumber.

* Reassuring clients and their families that their financial situations are in the best possible hands and that the elusive "right thing" is in fact being done.

* Instilling the idea that the attention paid to a given account could well save it and make it more money in a given year than it pays in fees in a decade.

That's if the client cares about fees, which might not be the case if you follow this model.

In case you need a nudge to take a long-term franchise view and base yourself on the clients' and prospects' expressed wishes, consider Peter Drucker again. "Quality in a product is not what the supplier puts in. It's what the customer gets out and is willing to pay for ... customers pay only for what is of use to them and gives them value. Nothing else constitutes quality."

Share your thinking and develop the organization accordingly.

Don't keep your thinking a secret! Be sure everyone in your organization knows the value of a customer and displays that appreciation during every contact.

Then, hire attitude as opposed to ability. A job applicant's appreciation of the value of a customer should be your hiring criterion, and the skills necessary to deliver your services can be taught. Stated another way: It is easier to teach ability than to teach attitude.

Training is important in this regard as well, because your customers deal with your people, not with your company.

J. W. Marriott of the hotel chain knows the value of sharing the vision. "Motivate them, train them, care about them ... if we treat our employees correctly, they'll treat the customers right, and then they'll come back."

Remember, this kind of customer focus, where the customer comes first--before reporting, meetings and bureaucracy--is the difference between moderately successful companies and extremely successful ones. If we let our clients and prospects tell us what they want to buy and how they want it delivered, and then accommodate them, we will be well rewarded, especially in the long term.

Lee Iacocca had the right idea: "When the product is right, you don't have to be a great marketer."

So did Will Rogers: "Let advertisers spend the same amount of money improving their product that they do on advertising, and they wouldn't have to advertise it."

This is a great business, and I urge you to keep it that way by having the courage to research, rethink and redesign, so as to be sure we know what the client wants--and that we deliver it.

Consider these three premises:

1. We are in the retail advice, counsel and personal attention business, not the wholesale transaction business.

2. Quarter-to-quarter earnings focus, with management compensation tied to current year's earnings, will doom the building of the franchise.

3. We have been operating on the assumption that we know what our clients and prospects want and value in a relationship with us. But do we? Are we sure?

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Paul Diesel is a lecturer in marketing at Bentley College in Waltham, Mass., and a financial-service industry speaker and consultant. He is a past president of the predecessor organization to the ABA Marketing Network. Telephone: [phone]; e-mail: [e-mail]