If you’re a bank that doesn’t offer lockbox service, or a bank that maintains a bare-minimum in-house courtesy, you might be missing out on leveraging a lockbox service provider to its fullest potential. Below are just a few of the reasons why you might want to take a second look at including a robust lockbox solution in your cash management suite of products.
It may not come a as a shock to you to learn that lockbox customers routinely carry high balances. Lighthouse Payment Services, Inc did a study a few years back and found that customers who leverage a lockbox solution carry, on average, $500,000 more in their deposit accounts than their non-lockbox industry counterparts. This is because by offering lockbox to your customers, you directly integrate your customers’ accounts receivable process into their banking relationship. This serves as a compelling argument for your customers to keep a larger share of their wallet with you, and also provides you with opportunities to sell other cash management products and services along the way.
A lockbox relationship increases your customer’s “stickiness”. It used to be that the more products and services your customer opens, the less apt they are to attrite down the road. This old school retention approach doesn’t hold true as much as it used to, and even worse, it runs the risk of making your customers unprofitable if their relationship is rife with shell accounts and products they don’t use. On the other hand, a lockbox relationship still serves as a wonderful centerpiece of a deposit relationship as well as an effective means of cementing customers to stay with your bank.
Most importantly, you’ll want to offer lockbox services because your competitors are offering lockbox services. When you’re calling on prospects, the subject of lockbox doesn’t come up all that often, but when it does come up, it’s a deal-breaker if you can’t support it. It’s not unusual for us to see banks approach us for lockbox services only after they have a high value prospect in the wings who requires it. While we certainly love the business, we also love it when banks proactively integrate the service into their cash management offerings. This way, when prospects ask “Do you offer lockbox services?” rather than deflecting the question, relationship managers can respond with an unequivocal “We sure do.”
Lighthouse Payment Services, Inc specializes in bank-branded retail and wholesale lockbox service who can help maximize the synergy of your cash management offerings. Find out what we can do for you!