Nyba.branch manager prospecting.april 10 2014.v7(1)

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Nyba.branch manager prospecting.april 10 2014.v7(1)

  1. 1. Relationship Development Series Can Branch Managers Prospect Effectively? Buck Bierly MZ BIERLY CONSULTING, INC. 1
  2. 2. Relationship Development Series This publication is protected by copyright. It is licensed for a single user. It is licensed for internal use only. Copyright © 2007-2014 MZ BIERLY CONSULTING, INC. ALL RIGHTS RESERVED Notice 2
  3. 3. Relationship Development Series • Founder and President of MZ BIERLY CONSULTING, INC., a sales management consultancy that specializes in working with banks to improve the sales leadership and relationship development processes that build sustainable performance in the business-to- business segment. • Supporting the banking industry since 1985. • Relationships with more than 75 banks in North America. • 9 full-time professionals with significant backgrounds in commercial and business banking. Background and Context: Buck Bierly 3
  4. 4. Relationship Development Series Yes. . . and No. There are opportunities. . . Consistent execution is the dilemma. The Short Answer 4
  5. 5. Relationship Development Series Most Current Data 5
  6. 6. Relationship Development Series Most Current Data 6
  7. 7. Relationship Development Series 1. It’s a changed environment. . . is it the right time to focus on the Small Business market? 2. What do Small Business Owners want from their bank? 3. Can Branch Managers succeed as Small Business Relationship Managers. . . or do you need Small Business Specialists (SBS) to be successful? 4. Can Branch Managers be effective at their operational, administrative and inside sales responsibilities, and still be successful in outside business development? The Questions. . . and the Answers aren’t Simple 7
  8. 8. Relationship Development Series 1. The changes in consumer lending has banks looking at small business loans as a replacement. 2. Reduced fee income has banks scrambling for replacement revenue. 3. Transactional activity shifting to other channels: consumers and business owners coming into branches less often. So many Banks have decided to put more “feet on the street”. Adjusting the “Sales” Focus. . . In a Changed Environment 8
  9. 9. Relationship Development Series 1. Selling “Products” through Campaigns, Blitzes, Call Days. 2. Building “End-to-End” Relationships with the Business Owner. The second choice requires Consistent Calling Activity and a Different Client Conversation. Is it Worth It? The Choices We Make. . . When We Adjust the “Sales” Model 9
  10. 10. Relationship Development Series Business Owner DDA DDA MMA MMA Internet Banking Short-Term/Long-Term Investments Line of Credit Retirement Planning/Retirement Plan Equipment Loan or Lease Mortgage SEP HELOC Liability Insurance Term Life Insurance Group Banking Total: 8 Total: 7 A Significant Source of Loans, Deposits and Fees 10 Professional Practice: 10-years, $750,000 in sales. 65% of the “Relationship”
  11. 11. Relationship Development Series A Significant Source of Loans, Deposits and Fees 11 Business Owner DDA DDA MMA MMA Web-Based Banking/Cash Management Web-Based Banking Line of Credit Investments Equipment Loan or Lease Retirement Planning/Retirement Plan Commercial Mortgage Jumbo Mortgage 401(k) HELOC Liability Insurance Life Insurance Key Man Insurance, Buy/Sell Agreement Total: 9 Total: 8 Business Services: 15-years, $2,500,000 in sales. 65% of the “Relationship”
  12. 12. Relationship Development Series Business Owner DDA DDA MMA MMA Web-Based Banking/Cash Management Web-Based Banking Line of Credit Investments Equipment Loan or Lease Retirement Planning/Retirement Plan Commercial Mortgage Jumbo Mortgage 401(k) HELOC Liability Insurance Life Insurance Key Man Insurance, Buy/Sell Agreement Total: 9 Total: 8 A Significant Source of Loans, Deposits and Fees 12 Distributor: 15-years, $3,500,000 in sales. 65% of the “Relationship”
  13. 13. Relationship Development Series BUILDING RELATIONSHIPS WITH SME BUSINESS OWNERS A Focus on Relationships 13
  14. 14. Relationship Development Series Are There Opportunities? 14
  15. 15. Relationship Development Series The Human Touch 15
  16. 16. Relationship Development Series This study correlates skills with “Customer Satisfaction” and with the likelihood a Business Owner would refer you to other Business Owners A Human Touch is Needed for Relationships 16 Data from the Enterprise Council on Small Business
  17. 17. Relationship Development Series The Key Skills from the Study. Data from the Enterprise Council on Small Business 17 A Human Touch is Needed for Relationships
  18. 18. Relationship Development Series 1. Not all Business Owners want the same level of relationship with a Banker. 2. Not all Bankers can build all levels of relationship with a Business Owner. Relationship “Value Drivers” (Requires a Human Touch!) 18
  19. 19. Relationship Development Series A REAL-LIFE LOOK AT BUILDING “RELATIONSHIPS” 19 A Focus on Relationships
  20. 20. Relationship Development Series 20 Direct Mail/Promotions (Marketing Driven): Branch Manager telephone or face-to-face follow-up; Product focused Already doing Stage 3 everyday, Get out of their way Campaigns or Blitzes: Focus in on increased outside calling activity; product focused; usually tied to new household acquisition or loan growth Long-Term Focus: Targeted on specific clients, prospects, COIs; Focus on Acquisition, (market share) followed by Expansion (wallet share of 6+ product categories) Good short-term results; Easy to manage (an event). Spotty long-term follow-up; Requires a “stream” of new promotions to get consistent results Highly consistent results under any circumstances. Good short-term results (Better results than Direct Mail/Promotions); Easy to manage (an event); Can result in single service households and “low hanging fruit” and loans on the “periphery” Good long-term results; Builds more “relationships”; Can result in better margins and credit quality; Better wallet- share; Better brand; Requires good skills for all team members Looking for Relationships or Products? The Results are Different
  21. 21. Relationship Development Series 21 Key Skills: Customer Service, Responsiveness, Some Product Knowledge Key Skills: Only 10% make it to this Stage Key Skills: Improved Product Knowledge, Willing to Leave the Branch, Getting Comfortable with Business Owners Key Skills: “Expertise” in Business and Financial Operations, Builds Relationship with Business Owner, Excellent Product Knowledge Looking for Relationships or Products? The “Skills” are Different, They are Progressed
  22. 22. Relationship Development Series The Branch Manager becomes the Small Business Banker 1. Focused on under businesses under $3 million in sales. 2. Reporting to Consumer Sales Manager in Consumer Banking with strong partnership with Business Banking for mentoring purposes 3. Loan, deposit, fee and household growth goals 4. Identified list of branches with best small business growth potential • Certified Training Program, On-going Small Business Skills Development. • Aligned Sales Talent with Market Opportunity. • New Hire Testing for Sales Aptitude Capabilities. • Small Business Activity, Production and Accountability Tracking. A Small Business Relationship Model in “Play” 22
  23. 23. Relationship Development Series 1. Small Business Specialists (SBS) [Branch Based and BB Based]. • Supported efforts in branch calling segment • Too difficult to differentiate activities from Branch Managers • Branch results suffered. Overall results declined or at best flat 2. A Return to Branch Managers as Small Business RM. • Expectations to make outside calls increased • Business deposit loans and fees became a priority 3. However, there was Work to Do. • The next level of leadership was ill-prepared to coach and support. • Inconsistent performance by Branch Managers and Consumer Sales Managers • Messaging convoluted and difficult to deliver with “multiple” priorities • Failure to recognize market differences Why They Chose the Branch Manager as Focal Point (Sequence of Events) 23
  24. 24. Relationship Development Series 1. Focus Groups Supported Branch Manager Calling Efforts 2. Differentiated “Us” from Competitors 3. Profitability It was the Best Choice [the results prove it!] . . . but it required a significant shift in Accountability and Coaching! Why the Branch Manager? 24
  25. 25. Relationship Development Series Small Business Model in “Play” To win they had to “differentiate” the Customer Experience 25
  26. 26. Relationship Development Series 1. Time: Reduced staffing levels make it hard to leave the branch to make calls. 2. Conflicting priorities: Inside sales, outside calling, branch administration, service management, etc. 3. Demand for short term results: “What have you sold today/this week?” 4. Skill deficit (real or perceived): “I need more product knowledge!” What Gets In The Way? The Cultural Obstacles. . . 26
  27. 27. Relationship Development Series 1. Many Branch Managers who grew up in Consumer Sales Teams often grew up with a product focus [“products and metrics”]. 2. Many of their interactions with Business Owners have been reactive [rather than proactive]. 3. They tend to have limited product knowledge beyond business deposit products, “scored” business loans and consumer products. 4. They often have limited “business maturity” [so they focus on products in their meetings with Business Owners]. What Gets In the Way? The Skills Obstacles: Sales Process and Product Knowledge 27
  28. 28. Relationship Development Series 1. In many cases they don’t “practice” enough. Proactive business-to- business skills require practice [Practice is 5+ scheduled, face-to- face calls per week]. 2. The Branch Manager gets mixed and conflicting messages about priorities [stay in the branch vs. make outside calls; sell products vs. build relationships]. 3. The Retail Sales Leadership Team grew up in a “products and metrics” world. 4. The Retail Sales Leadership Team has limited “proactive” business- to-business experience [they can coach products but struggle with “business acumen” coaching; they rely heavily on business partners for this coaching]. What Gets In the Way? The Skills Issues. . . Lack of Practice and Lack of Coaching 28
  29. 29. Relationship Development Series It’s not just selling more products, it’s about building sustainability by building deeper customer relationships and high share of wallet 1. Sustainable performance requires well defined, disciplined process. • What prospects and customers do we call on? • What does the client/prospect conversation look like? • How many calls, referrals, contacts do we need to make to meet business objectives? • How do we manage the on-going customer relationship? • How do we measure success? 2. Training is only the tip of the iceberg. • The right people in the right place. • Consistent, regular coaching. • Transmitting best practices. • Rewards and recognition. Building a Sustainable Model: Aligning the Tactics 29
  30. 30. Relationship Development Series BUILDING SUSTAINABLE RESULTS 30 The 5 Key Elements
  31. 31. Relationship Development Series Managing Market and Relationship Strategies 31
  32. 32. Relationship Development Series Managing Market and Relationship Strategies 32
  33. 33. Relationship Development Series DEFINE THE MARKET AND BUILD A FOCUS Key Element #1 33
  34. 34. Relationship Development Series 1. A Relationship Development Meeting is a face-to-face meeting that focuses on two things: • Identifying and developing the Business Owner’s tangible needs and intangible needs. • Matching your solutions to the developed and agreed-upon needs. 2. A Marketing Call (or Marketing Touch) is an interaction that keeps the bank or banker “top-of-mind” with the client/prospect. • An “overview” of Business Owner’s possible needs. • An overview of “what we do”. • “If we can help. . . Let me know.” Definitions. . . Relationship Development vs. Marketing Calls 34
  35. 35. Relationship Development Series Lead Generation Qualifying Proposal Internal Sale External Sale Closed Transaction Build Long- Term Relationship 35 50% Proactive Leads 50% Reactive and Transaction Leads Balance the Proactive and Reactive Activity within Your Market. . . By Keeping a Proactive Focus on Key Relationships Key Element #1: Stay Focused
  36. 36. Relationship Development Series Segment the Client Base 1. Retention Relationships 2. Expansion Relationships 3. Acquisition Relationships 4. Other Clients 36 Key Element #1: Stay Focused on the “Right” Clients (An Example of Key Relationships)
  37. 37. Relationship Development Series Retention Relationships are clients who meet these criteria: • Have good credit quality. and are • In top 10% of aggregate loans and deposit balances. • Your Bank has >60% of the loans and deposits of the business. Expansion Relationships are clients that meet these criteria: • Have good credit quality and match the “Core Relationship Profile”. and are • Your Bank has less than <60% of the loans and deposits of the business. and have • Significant cross-sell/up-sell opportunities in next 18 months. 37 Key Element #1: Stay Focused on the “Right” Clients (An Example of Key Relationships)
  38. 38. Relationship Development Series High Appeal Industries Limited Appeal Industries  Manufacturers  Real Estate Investment  Wholesalers  Low-End Retail  Distributors  Restaurants  Architect, Engineering and Business Service Firms  Mini-Warehouses/Carwashes  Law Practices  Landscaping  Accounting Firms  Service or Gas Stations  Insurance Brokers or Firms  Used Car Dealerships  Large General Contractors  Real Estate Investment  Medical, Dental and Health Practices  Low-End Retail  Ag-Related Businesses  Restaurants 38 Key Element #1: Stay Focused on the “Right” Businesses (A Profile of Expansion and Acquisition Relationships) Defining the “Market” you want to Focus on
  39. 39. Relationship Development Series Business Characteristics  In business over 3 years  Sales revenue between $500,000 and $3,500,000  Employing more than 5 people  Location within footprint  Privately held with experienced management team  Borrowing needs under $1,000,000  Profitable (Net Profit After Tax) for the last year  Leverage (Debt-to-Worth) less than 3 to 1  Deposit balances average more than $50,000  Using or needing 5 or more business banking/consumer banking product categories 39 Key Element #1: Stay Focused on the “Right” Businesses (A Profile of Expansion and Acquisition Relationships) Defining the “Businesses” you want to Focus on
  40. 40. Relationship Development Series 1. Define the annual activity for Retention, Expansion and Acquisition Relationships. 2. Target 5 calls per week [60% of the calls to be proactive]. 3. Target 4 pre-set appointments: • 1 with Retention, Expansion and Acquisition Relationships • 1 with a Other Clients • 1 with a Other Prospects • 1 with a Current or Prospective COI 40 Key Element #1: Stay Focused on the Key Relationships
  41. 41. Relationship Development Series CHANGE THE CONVERSATION Key Element #2 41
  42. 42. Relationship Development Series Building Relationships require a series of Relationship Development Meetings that build momentum. And, seeing things and hearing things that your competitors don’t. * Needs are defined as Problems, Issues, Areas of Concern or Product Needs Key Element #2: Changing the Conversation 42 Each Relationship Development Meeting is a Structured Communication Process.
  43. 43. Relationship Development Series Step 2 is the most important step for aligning with the Business Owner’s Business Strategy, Business Plan, Business Objectives, Business Operations and Financial Management Processes. 2 Key Element #2: Changing the Conversation Relationship Development Meetings are all about building momentum. Step 2 is the key. 43
  44. 44. Relationship Development Series 1. Where are you banking? 2. What products are you using? 3. How are they priced and structured? 4. What 2 things do you wish your bank was doing but they’re not? 5. Can I have a copy of your statements to put together an offer of how we would handle your banking relationship? Where are the Business Issues here? These questions focus on products; comparing your products with a competitor’s. These questions demonstrate product acumen!! Look at these Questions. . . 2 Key Element #2: Changing the Conversation 44
  45. 45. Relationship Development Series A “Business” Conversation (Business Acumen) These questions align with a Business Owner’s Business Strategy, Business Plan, Business Objectives, Business Operations. These questions demonstrate business acumen!! Use this Question Set to Demonstrate Business Acumen and Building Relationship Momentum 2 45
  46. 46. Relationship Development Series 1. Keys to success affect current and future decisions. 3. Industry trends, business changes in next 3 years. 2. Industry trends affecting the business today. 4. Current and future changes force changes in current and future business operations. 5. Current and future changes in business operations force changes in current and future financial operations. 6. Changing financial operations create changes in the financial needs and then an evaluation of the solutions currently in place. 46 Key Element #2: Changing the Conversation
  47. 47. Relationship Development Series 47 A Template for Changing the Conversation Successfully executing these 2 Meetings will “align you” with what is changing in the Business Owner’s Life? Now you can help him/her “optimize” the financial processes.
  48. 48. Relationship Development Series STRENGTHEN EXPANSION RELATIONSHIPS Key Element #3 48
  49. 49. Relationship Development Series Proactively Expanding Relationships These are the 7 Elements in that drive a Relationship Expansion Process. These are the process elements that drive Banker Success in the building a Brand. . . and is the result of consistent execution. 49
  50. 50. Relationship Development Series Build the Client Folder. The folder includes these: 1. Industry Trends and Data (First Research, Ementor, etc.) 2. Trade association data on the industry 3. News articles on the industry (Google) 4. The prospect’s web site 5. News articles on the Business (Google) 6. News articles on the Business Owner (Google) 7. Linked-In information on the Business Owner 50 Proactively Expanding Relationships. . . Focus Requires a Strategy and a Plan Build a Client Folder
  51. 51. Relationship Development Series Proactively Expanding Relationships. . . Requires a Strategy and a Plan What do you know, what don’t you know about the business? 51 Determine possible opportunities
  52. 52. Relationship Development Series 52 Proactively Expanding Relationships. . . Requires a Strategy and a Plan How can you help Optimize Meeting the Owner’s Issues and Challenges?
  53. 53. Relationship Development Series 1. Have you reviewed this Business Owner’s Business Plan, Business Strategy, Business Objectives, and Business Operations in the last 12 months? 2. Do understand the [changing] trends in this Business’s Industry? 3. Have you anticipated how the Business Operations may be changing? 4. Have you anticipated how the Financial Operations may be changing? 5. Can you see opportunities to align with the company’s short-term, mid-term and long-term business objectives and financial objectives? 6. Can you see opportunities to optimize their capacity to achieve their changing objectives? Review your Client Folder and Relationship Plan with your Business Partners. . . determine opportunities. 53 Proactively Expanding Relationships. . . Requires Consistent Execution
  54. 54. Relationship Development Series ACQUIRING NEW RELATIONSHIPS Key Element #4 54
  55. 55. Relationship Development Series Acquiring New Relationships These are the 8 Elements in the New Client Acquisition Process. These are the process elements that drive Banker Success. 55
  56. 56. Relationship Development Series 1. D&B Strategic Marketing Database or Zapdata.com (Hoovers Lead Builder) 2. ReferenceUSA 3. Local Industrial Development Authority (electronic version) 4. UCC Filings (there are compilation services) 5. Local Business Publication directories (not always a good choice, too visible) 6. Guidestar.org (a great source for 501C3s) 7. Trade Association Memberships or Websites (a few examples) • American Society of Association Executives (www.asaenet.org/find/) • American Dental Association directory (www.ada.org) • American Institute of Architects directory (www.AIA.org) • State and local trade association listings Acquiring New Relationships. . . Using Multiple Sources for Your Prospect List 56
  57. 57. Relationship Development Series 1. “It's Marketing's job to provide us leads.” 2. “Get me a better list.” • A list of businesses that want to change banks now! • “The list isn’t perfect. . . there are dead people on here!” 3. Focus on former customers from “my old bank”. 4. Each Banker builds his own prospect list. • Not sharing it with team members or other LOBs for feedback. 5. Rely on a single source for prospect names. 6. Keep it all in your head. • “I have an amazing mind, I can keep it all in my head.” Acquiring New Relationships. . . Ineffective “Best Practices” for Building Prospect Lists 57
  58. 58. Relationship Development Series 0% 10% 20% 30% 40% 50% 60% ConversionRate(%) Customer Referral Line of Business Referral COI Referral RM Cold Calling “Referrals” can get you an introduction, a testimonial referral! Third Choice Last Choice Testimonial Referral Second Choice 58 First Choice Acquiring New Relationships. . . Getting in the Door Working your Network List to get a Testimonial Referral.
  59. 59. Relationship Development Series Acquiring New Relationships. . . Prepare! 59 Again, Preparation and Execution of the preparation are key drivers of success.
  60. 60. Relationship Development Series Build the Prospect Folder. The folder includes these: 1. Industry Trends and Data (First Research, IBISWorld, Ementor) 2. Trade association data on the industry 3. News articles on the industry (Google) 4. The prospect’s web site 5. News articles on the Business (Google) 6. News articles on the Business Owner (Google) 60 Build the Prospect Folder. Acquiring New Relationships. . . Build the Prospect Folder
  61. 61. Relationship Development Series Understand your “Prospect”. 1. Know the Industry Sector of the business. 2. Know the Business Operations of the business. 3. Know the Financial Operations of the business. 4. Understand the Value Drivers of the Business Owner. 5. Look for opportunities to align with the company’s short-term, mid- term and long-term business objectives and financial objectives. 6. Look for ways to optimize their capacity to achieve the objectives. 7. Be known as the Banker with the highest level of business acumen for partnering with the Business Owner. Understand the “Prospect” . . . better than the current Bank does Acquiring New Relationships. . . Build a Strategy 61
  62. 62. Relationship Development Series Due Your Homework on the Industry Acquiring New Relationships. . . Industry Trends create Changes in the Business 62 Understand the Industry Trends and Issues.
  63. 63. Relationship Development Series Web Site Data 1. Anticipate Changes in the Business Objectives (1-year and 3-year). 2. Anticipate the Changes in the Business Operations 1-year and 3-year). 3. Look for the Value Drivers (Keys to Success) of the Business Owner. Do Your Homework on the Business and the Business Owner Acquiring New Relationships. . . Looking for Changes in the Business 63
  64. 64. Relationship Development Series Using First Research, Hoovers, or RMA Statement Studies. . . Anticipate Changes in the Financial Operations of the Business. Do Your Homework on the Business. 64 Acquiring New Relationships. . . Looking for Changes in the Business
  65. 65. Relationship Development Series 65 Successfully executing these 2 Meetings you will be “aligned” with the Changes in the business? Now you can help him/her optimize the financial operations for the next 1 to 3 years). Acquiring New Relationships. . . Changing the Conversation
  66. 66. Relationship Development Series COACHING THE TEAM Key Element #5 66
  67. 67. Relationship Development Series Is it Possible to get 70% of Your Team to Stage 3? If many Business Owners want a different type of relationship with a Bank, what will it take for a team of Branch Managers to consistently execute Stage 3 Relationship Development Skills. 1. Can day-to-day messaging, goals, and scorecards currently aligned with “products and metrics” be re-aligned with “relationships”? 2. Can Branch Managers learn to have business conversations with Business Owners (rather than product conversations)? 3. Can Retail Sales Leaders provide effective coaching on this “level” of relationship development with the Business Owner? 4. Is there a role for the partnership between the Retail Bank Team Members and the Business Banking LOB Team Members? What will it Take? 67
  68. 68. Relationship Development Series Some Banks have significantly increased in small business results (including loans!) They changed 3 things. . . 1. Messaging 2. Behavior 3. Infrastructure These 3 changes increased consistent execution which resulted in less variability in execution which in turn increased the consistency of results. Getting to the Next Level 68
  69. 69. Relationship Development Series 1. Prioritizing the Messaging. • Have you prioritized the messages? • Are you staying on the prioritized messages? • Are you continually reducing the competing/conflicting messages? 2. Adjusting the Behaviors. • Have you assessed the developmental needs? • Have you built a coaching plan? • Are you “formally” coaching? • Are you adjusting your coaching for each team member? 3. Adjusting the Infrastructure. • Have you assessed the infrastructure? • Does it support the messaging you’re delivering? • Does it support the behaviors you want? Getting to the Next Level 69
  70. 70. Relationship Development Series Consistent Execution of is the result of. . . 1. Continually prioritizing the Messages. • Best Practice: Monday Morning Sales Meetings. 2. Continually “growing” the right Behaviors. • Best Practice: Scheduled, Every other Week, One-on- One Coaching on Market Strategy and Relationship Strategy. 3. Continually fine-tuning the Infrastructure. • Best Practice: Control what you can Control, but Communicate. Getting to the Next Level 70
  71. 71. Relationship Development Series What are the key drivers to consider? If you can get the Messaging aligned then it’s the “Foundation Behaviors”: 1. 5+ Pre-Set Meetings per week. 2. Staying Focused on a “Targeted Business List”. 3. Cognitively Processing the Meeting before the Meeting. 4. Building clearly defined Meeting Objectives. 5. Using the Right Questions. Getting to the Next Level: Building and Maintaining Stage 3 Skills 71

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