Letters From Leton: A Nickel For A Pop

If you have not had a chance to watch any of the History Channel’s America Great series, I recommend it to you.

On Thanksgiving (naturally), I watched a show called, “Foods that Made America Great”.

A common theme among the shows relates to once dominant companies that either lost out to, or at minimum missed the mark when dealing with, new competition.

In the show I watched, “Cola Wars,” Coca Cola had the opportunity to buy out the struggling and near bankrupt Pepsi Cola for $50,000. Coca Cola’s CEO decided not to pursue the purchase as he saw Pepsi Cola only as a potential threat and saw no reason to help out the failing competition.

Pepsi, in a desperate and cost-saving move, decided to begin selling its soda in 12 ounce bottles (beer bottles) for a nickel versus the “historic” cola bottle of 7 ounces. Coke continued to sell its cola in the 7 ounce bottles for a nickel. 

During the Depression, the decision to spend a precious nickel on 7 ounces or 12 ounces of soda was an easy answer to arrive at, and Pepsi survived.

In our industry, we see trends and competitor decisions that challenge us constantly. How do we act or react?

An example is the transition from paper-based transactions to electronic transactions. (By the way, paper transactions are much risker since anyone can buy a color printer at Wal-Mart and print fraudulent charges).

A recent report by ACI Worldwide showed that only 25% of transactions in 2020 were paper-based (checks, cash). By 2025 that total is expected to drop to 17%.

Since we fully reopened our bank lobbies last June, we have seen limited transactions at the teller windows inside the bank as our customers continue the trend of using drive-ups and night drops. This is on top of the existing decline in teller transactions over the past ten years as consumers and businesses have moved to using direct deposit and other electronic services. 

This change in our business model presents a challenge. So how do we react to this change?

We began preparing years back for the new world of banking by getting ahead of the future.

Realizing that we had great and caring folks who customers loved dealing with, why not empower our staff to care for their customers?

Our frontline folks are empowered to unlock online banking accounts, print debit cards in our bank for customers, increase debit card limits – all sorts of things to help their customers directly and immediately. 

And as time goes by, we will continue to add capabilities for our staff to better take care of their customers, adding value to using a local bank with “real” people the customers know and who the customer can see anytime versus an 800 number or an online chat.

Some are threatened by the future. Others understand that the future is coming no matter what.

If one uses commonsense, and not ego, hubris or fear, the answer to surviving into the future is rather simple.

Adapt to change and focus on your customers.

Stay safe.

– Leton


“Letters From Leton” is a blog series comprised of the weekly updates that Leton Harding – President, Chairman, and CEO of Powell Valley National Bank, shares with the Bank’s team members. These newsletters are full of uplifting anecdotes and intriguing insights that are applicable beyond the Bank, so we want to share them with you.