“I can't overemphasize that we have the right kind of client-relationship people who really have the interests of the client at hand first – not second, but first,” says Schwab. “We are willing to risk short-term revenue to do the right thing for the customer and ensure long-term success.”
Each and every day, Schwab comes to work and reminds himself of why he is there. “Fundamentally, to help a lot of people,” he says. “That really means making sure our clients have a sense that they are financially fit.” And, he has no illusions about who he owes his success to: his customers.
At Schwab, management is constantly asking itself a number of questions to refocus on its customers and their priorities: What can it do better? How can it make its customers’ lives easier? What new services or products would they like to see offered? Is it fair and responsive to their customers? Is it constantly striving to improve its operations? And, is it worthy of its customers’ trust?
“We think we have a superior value, and we’d put that value up against any of the traditional firms,” says Schwab. “Even against the so-called discount firms. We want to be a superior value against any other financial service company, that's our ambition. And we maybe are not there in every component, but we're pretty close.”
Schwab says one of his top priorities has been to find every possible way to give his customers the most bang for their buck. “Every company, a mature company, can look at their costs and redundancies. It's natural for every company that's successful to build up infrastructures that are inefficient. We're all human, we all do that. So that is number one,” he says. “And you want to take whatever savings you can out of that and figure out how to get it back to your loyal clients. They will reward you with additional business, even if you mess things up.”
Schwab has shifted his strategy away from being simply the best discount brokerage to the one that offers the most value. “The value proposition is front and center to us,” he says. “We've taken out the account fees, the minimums – all these things we've done the past couple of years have been very dramatic.”
On top of offering value, Schwab has underscored the importance of making sure his clients have a sense that they are valuable. “At the end of every day, having a clientele that speaks well of you, that’s the largest source of business,” he says. “I don't care what kind of business you're in. Clients referring us to their friends or relatives is so much more powerful than any advertising we could ever do.”
But in a world where Schwab is up against the likes of Bank of America, he says nothing is more important than offering customers value. “Our organization just has to outfox our larger competitors by really emphasizing our value proposition, which is really outstanding compared to them,” he says. “The good news is we are a highly flexible organization. We have a national footprint, we have low costs, we're efficient, so we can compete at this point with almost anybody and do a great job for our clients.”
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