The Relationship and the Transaction Rant
By The Rantmaster (aka Jack Hubbard)
On May 17, Mrs. Hubbard (we call her
Mrs. Hubbard because we are afraid of
her) was carrying our new Beagle puppy,
Taylor, (pictured here) on the top landing |
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Needless to say, my travel plans were curtailed for seven weeks. That meant 17 American Airline segments went by the boards. Around that same time, I decided my quest for the FedEx Golf Cup were likely over and hung the clubs up in favor of my real passion, playing music. So, when Mrs. Hubbard was able to get into a car without severe discomfort, we took a ride to a local music store to look at pianos. She was in a large and obvious cast and while the salesperson made some small talk about that, he was obviously more intent about informing me about the features and benefits of the instrument, just like he learned in the product knowledge class.
After about a month of cancelled travel, an American Executive Platinum representative called me and inquired if they had done something wrong since they noticed I had not traveled as I was supposed to for several weeks. I told them the story and the rep wished my wife well. She also gave some ideas on how to get refunds on my current tickets faster, since there was a procedure in place for that. A feel-good for sure.
About a week after we looked at the piano, the salesperson called to see if I had made a decision as to which model to purchase. When I suggested that we had just begun our search and we wanted to look at various options, he interrupted and began to tell me all about why they were the best, even throwing in a couple of barbs about the local competition. I thanked the salesperson and despite his obvious “tone” with me, left open the potential of buying from him.
Two weeks later, David, from the Executive Platinum desk at American reached out. “I am calling to see how Kathy is doing,” he said. “Please give her our best and hope she’s back playing tennis real soon.” There was no “and we have a sale on a flight to…” or “we’re better than United because…” There was sincerity in his voice that I appreciated.
That same week I received an e-mail from my former best friend at the piano store. “I haven’t heard from you in two weeks and despite the many benefits I’ve outlined about the Yamaha Clavinova 407, it appears you have made the mistake of purchasing it somewhere else. I obviously misread your buying signals. Just know that if you decided to get it on [Internet auction site], sometimes there are many parts missing.”
As consumers we’ve seen each one of these movies before. Unfortunately, as salespeople we sometimes become the piano salesperson when we allege to be American. In other words, because we are behind on goals, because our manager is beating us about the head for more results, because we want the end-of-quarter bonus, because we get frustrated when someone can’t make a decision, we send an e-mail (albeit likely less overt and irritating) or leave a voice mail urging the customer to buy that great HSA product or remote capture service now before the great offer or rate goes away. Many financial services providers say they are relationship- and client-focused, but when it comes to the do, they many times can’t carry the mail.
Mrs. Hubbard? She is fine now, thanks. And she is much more likely to step onto an American Airlines plane in the future than to ever step foot back in that piano store.
By Ron Buck,
St. Meyer & Hubbard Center for Excellence
Years ago I was introduced to the basic concepts of sales by Larry Wilson in a program called Counselor Selling. Larry was the founder of Wilson Learning Company and remains a respected pioneer in sales training. His training focused on building trust, relationships, and an awareness of customer needs —concepts that framed my career. Larry would always point out that, in most cases, the salesperson viewed the relationship as finished when the sale was done while the customer saw the close of the sale as the beginning of the relationship. In retrospect, his comment is interesting as his |
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If you think about it, there is a certain cadence to conversations with any of our relationships. There is a frequency (or rhythm) to the conversations we have with our spouses, parents, friends, and children. Every person we know or love has an expectation of how frequently we should talk. It is not the same for every relationship—the frequency is higher for those we love and lower for others. Some relationships require a higher regularity and others naturally fall into a slower cadence. But one thing is for sure—we cannot develop and deepen relationships without a shared expectation about how often we will talk. When someone moves away and we don’t talk to them for a year or so, the relationship weakens. The same is true with our customers. Customer relationships weaken when conversations are intermittent—or only driven by the customer.
I view Onboarding as those conversations we have with our new customers during the first couple months after they open new accounts. More accurately, Onboarding is a transition between the conversations we have while we are helping them open new accounts and the conversations we have while we try to deepen and strengthen the relationships over a lifetime (CRM). The strength of each customer relationship is directly related to the cadence and quality of those conversations. Although the frequency is different for each customer, our cadence should always be in harmony with those things that build trust: transparency, collaboration, intimacy, and self-orientation on the customer’s needs.
Onboarding conversations begin during the new account opening process. The purpose of the conversations is to be totally transparent and collaborative—asking for permission to call in two weeks so that we can follow up on:
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The fulfillment of products like checks and cards. Based on our research, the average 90-day retention rate of these products is about 86.8%—a huge dent in our production goals.
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Surprises. Many problems arise when customers realize that they need to have a minimum balance or have been charged an unexpected fee. Surprises have a big impact on the 90-day retention rate, accounting for over 20% of our losses in the first 90 days.
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The purchasing decision. One of the most important reasons for Onboarding is to support the original purchasing decision and to make sure the customer still feels like they made the right product selection. About 7% of customers feel they have made the wrong product decision. This conversation includes repeating the discovery agreement that was the basis for selecting the product.
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Expand the relationship. Onboarding is a good time to learn more about the customer and to give them an opportunity to learn more about us. This includes introducing them to the branch manager, teller supervisor, and the tellers. About 74.6% of customers are in the middle of life events that are driving financial needs.
These four reasons give us the opportunity to build trust and deepen the customer relationship. Onboarding also sets the cadence for conversations we plan to have with the customer, a cadence with which the customer starts to feel accustomed. Specifically, we send personal handwritten notes (not canned CEO letters) in two days to thank the customers, we call in two weeks to address the four issues above, and we send our first personalized marketing messages in two months based on what we have learned during new account openings and Onboarding conversations (not something Marketing arbitrarily comes up with).
However, Onboarding also allows us to determine the cadence of our conversations for each specific customer. If we have a conversation in two days, two weeks, and two months and then we wait for the customer to come to us, there is no cadence and the customer has no expectation about the relationship. Conversations become intermittent and one-way. The relationship weakens and the customer is open to offers from other banks.
We can set the cadence during the two-week call by asking permission to call in X months. This is defined in a new Onboarding process I call 2-2-2-X. Based on the customer needs and the salesperson’s assessment of the relationship potential, we can determine X (the next time we will have a conversation)—and we transparently set the expectation with the customer. The cadence should feel natural to both parties.
2-2-2-X: The New Onboarding Equation
The new 2-2-2-X Onboarding process has the possibility for huge rewards, but there are also huge risks. All credibility and reliability is lost if the salesperson is unable or unwilling to keep the commitment in X months, thereby destroying trust.
During the next three months I will give you more details about this process in a series of articles:
- How to Determine X, September
- Calling the Customer in 2 Weeks, October
- Benchmarks, Scorecards, and Coaching, November
SM&H Virtual Learning Labs Series Announced
We’re late to the party as a whole when it comes to sponsoring and leading Webinars. Not that we haven’t participated in our share. Ron Buck has done several over the past couple of months and his most recent offering “Sales Execution in a Challenging Economy” drew an estimated 1,000+ financial services professionals. If you would like to hear a replay of Ron’s program, go to www.thedisciplineofexecution.com and listen to it for free.
The rest of our company is taking Ron’s lead and sponsoring a series of free programs designed to provide practical ideas as we head into 2010. Three Virtual Learning Labs will be kicked off by two-time bestselling author Charles Green. It will be followed by Jim Dickie, Managing Partner of CSO Insights, and we put a bow on it before the year closes with an SM&H best practices in prospecting program. Mark your calendar for these dates and times. Registration information and more details will follow as we get closer to the dates:
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October 9, 2009, 3:00 P.M.–4:00 P.M. (CST)
Rebuilding Customer Confidence - Three Strategies to Becoming Trustworthy
Presenter: Charles Green, President & CEO, Trusted Advisor Associates
Register Now!
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November 3, 2009, 11:00 A.M.–Noon (CST)
Ignite 2010 by Putting Sales Process Research into Action
Presenter: Jim Dickie, Managing Partner, CSO Insights
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December 10, 2009, 11:00 A.M.–Noon (CST)
Killer Acquisition Strategies…Three Ways to Get More than Your Share
Presenter: Jack Hubbard, Chief Experience Officer, St. Meyer & Hubbard
Gaining Ground on Your Competition During Economic Turmoil
Using Strategy, Customer Experience, and ROI as Tools
By Bruce Clapp,
CFMP, President, MarketMatch,
baclapp@marketmatch.com
"Be fearful when others are greedy,
and be greedy when others are fearful."
~Warren Buffett
Warren Buffet understands the business mentality you need to experience success during economic turmoil. Keep this quote in mind and instead of approaching this current recessionary period with fear, help your institution experience success.
Right now the banking industry has battled significant negative media exposure, historic bank failures, unprecedented lending focus, and faltering consumer confidence. We need to focus on the tools that can bring us (and specifically, your institution) some positive light…these are marketing strategy, customer experience, and ROI analysis. We have to tell our positive message and with strength!
By examining what actions industry experts have taken during recessions that have allowed their companies to sustain their productivity and grow faster than the competition, you’ll learn how you can help your financial institution experience positive growth during and after economic downturns. Successful companies keep a consistent investment in advertising…supported by a quality marketing strategy and delivered through focused and trained staff.
During economic hardship, studies show that consumers are more likely to support companies that are involved with the local community. In hard times, consumers retreat to their families and to the familiarity of their local communities. They tend not to explore or take risks with their careers and investments. Conservative behavior tends to prevail, which means lending slows and deposits grow.
During a recession, customers are more likely to invest in products and services from a familiar institution in which they have already acquired confidence. Understanding this trend is a plus for small banks and credit unions. Today’s money troubles mean consumers tend to perk up every time they hear the words money, finance, savings, etc.
The truth of the matter is that “deals” are everywhere for those in a position of strength. Media outlets are searching to replace advertisers that have dropped out or cut frequencies. Your buying power has never been better. Secondly, the impact of your message is significantly increased with the reduction of competing messages and advertisers. Your focused, relevant message is fighting fewer competitors and you can benefit greatly from this opportunity!
As soon as the economy begins to pick up again, however, consumers will most likely lose interest in their future financial needs and may not be as interested in products designed to help them shore up their financial futures. A return to meeting my “now needs” will prevail. Recessionary periods are the ideal time to sell customers your products and services that provide future financial benefits.
Mark Wahlsrom, from the Legal Broadcast Network, believes cutting the marketing budget is the biggest mistake you can make during a recession—especially for those involved in financial services. Financial institutions are supposed to guide their clients when any financial strain is levied upon them and their families. The consumer expects this service from local institutions more than large national banks because they feel that your organization has more invested in the community and likely cares more about the customer. The number one concern for most Americans during recessions is to make sure that their families are supported. If you can exhibit that you can help them eliminate this concern, they are likely to give you their business.
The chart below displays how various marketing decisions during a recession affect your company during and following recessionary periods.
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What the Numbers Show Us
Aggressive advertisers see:
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256% growth following a recession and increased market share 2½ times the average market share gains following a recession
Those who cut marketing see:
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A two- to four-year recovery period from a 50% marketing cut during a recession, even if the budget is increased 60% post-recession
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Expect a five-year recovery period with a 100% budget cut during a recession—you are “out of sight, out of mind”
Aggressive advertising is part of your marketing strategy to create positive focus on your brand and your institution. In tough economic times, your message can resonate loudly with little interference from competing messages, because the airways are significantly less cluttered. However, you still need a compelling message to share. The platform of “safe and secure” is indeed important; however, the customer needs that message to be relevant and tangible. What does safe and secure really mean to me? Your strategy must answer that question.
The single most important place to answer that question of relevancy and tangible touch is at the moment of truth: the customer experience…when they enter a branch, dial a call center, or search your website. Staff that is trained, prepared, and ready to proactively address customer issues when needed must deliver the customer experience.
To meet that goal, we tend to focus on two key traits: willingness and ability. The willingness comes through coaching, mentoring, and focused hiring practices. The ability comes through training and preparation.
The last tool is the synopsis of all your efforts, the final measuring stick: ROI analysis. By having a clear marketing strategy, supported by an able and willing, focused customer experience, your marketing and sales efforts should prosper. However, you will not know the extent of that prosperity or fully engage in the leveraging of advertising in a downturn without calculating the ROI. ROI is quite simply the return on investment. What did we generate, incrementally, for our efforts and investment? The ROI calculation allows you to make better decisions on media usage, training frequencies, message tone, etc. all by measuring the response of your efforts.
Here’s to having a great marketing strategy, being consistent in your advertising (and leveraging the great deals and reduced noise of the media competition), having a clearly focused customer experience, and measuring your results. This is truly the “recipe for success!”
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Jack Hubbard Bob St. Meyer |
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