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Help Us All Understand: Summer Sales Funnel Rant

By Jack Hubbard, Chief Experience Officer

August is just hours away…the dog days. Temperatures are on the rise and, for many, thoughts turn to those last few vacation weeks before school starts again and relishing the final vestiges of summer. It’s that time when baseball’s “also-rans” begin to dump high-priced talent and replace it with younger players that might help in the future. It’s all about “next year.” Cub fans understand “next years.” They have had almost 100 of them waiting for a world title.

This is not a column about baseball, but the analogy is clear. There comes a point every year when bankers, performance consultants, all of us in sales begin to look at our funnel in two ways: how much can we win this year and when should we start to think about 2008? From our perspective, because of the length of the buying and budget cycles, we are starting to look yonder.

Your bank may or may not see things that way. Regardless, here are some key questions sales associates and sales managers should be considering now:

Here’s a challenge. Many banks don’t focus enough on the above. Our industry likes to look at number of calls made, number of dials, number of sales closed last week, last month, etc. These are important metrics to review. We continue to struggle as an industry though with strategic measurement. Best-of-breed sales associates and sales managers know that everything that counts can’t be counted and everything that is counted doesn’t count.

This challenge is magnified in the fourth quarter, when everyone scrambles to get things closed before year-end. When that happens, the culture is so worn out that it collectively exhales for a couple of weeks into the New Year, creating the same top-of-funnel problem that occurred at the beginning of the previous year.

In sales, it’s never too early to begin planning for next year. Don’t forget this year either.

Clearly we should balance our time by:

Finally, bankers are telling us they are using these rants in sales meetings and coaching sessions. We are so pleased you find the ideas in these columns thought-provoking. If you have a subject you would like to see us tackle in a future Help Me Understand, please reach out and let us know.

Some Summer Reading: Little Green Book of Getting Your Way

by Jeffrey Gitomer

He did it again! Not only is Jeffrey Gitomer one of the more prolific sales writers in America, he is at the head of his class. His first book, The Sales Bible, was published in 1994. Since that time he has written seven more and his latest is the Little Green Book of Getting Your Way: How to Speak, Write, Present, Persuade, Influence, and Sell Your Point of View to Others.

Why buy this or any of Jeffrey’s other books? Lots of reasons…

This latest addition is one of his better efforts. The book centers on the fundamentals of powerful persuasion and how sales professionals can get their way by helping customers get theirs. His 29.5 elements of powerful presenting alone are worth your $20 investment. Add to that the 11.5 guidelines to compelling presentations, 8.5 elements of a “yes-generating speech” and 11.5 elements that every sales associate must incorporate into their sales performances and this book becomes your “sales bible” when you prepare to make any and every presentation to groups from 1-1,000.

Do yourself and your clients a favor this summer: buy, read and live the message in the Little Green Book of Getting Your Way.

Using Customer Triggers to Retain and Grow Customer Relationships

By Mike Berry, Senior Vice President, Conclusive Marketing

Banks throughout the nation continue to emphasize acquisition over efforts to retain customers by getting deeper and wider with those relationships. Some call it cross-selling. We like the SM&H term: cross-solving. Bank executives polled in a recent Gartner study were asked to name their most important activity in driving marketing initiatives. Of those asked, 43% stated it was acquiring customers. Another 30% cited cross-selling and 9% said retention.

Clearly, there is room for improvement in terms of bank-based efforts to build loyalty with existing customers. Banks do invest in tools and systems to help them target customers for marketing purposes. Targeting equals relevance for our discussion and our firm’s experience suggests that relevance leads to results: higher balances, improved retention rates and even a greater number of quality referrals.

Banks use many approaches to pinpoint sales and marketing messages. Strategies such as lifestyle codes (e.g., “Furs and Station Wagons”, “Young Suburbia”), SLEs (significant life events) and even predictive models, have been in use for years. We find these tactics range from ineffective to only moderately effective—much of that due to lack of consistent execution, failure to connect conversations to the enabling technology and certainly lack of ongoing coaching.

The never-ending pursuit for relevance in sales conversations has led an increasing number of banks to begin to target based on time. That is, attempting to determine the right time to communicate with a customer. At Conclusive Marketing, we refer to this as Right Time Marketing. So, when is the “right time”, how do you determine it and how effective can this approach be?

A Wealth of Data

Banks gather a treasure trove of information about their customers. These data are dynamic—going well beyond name, address and other basics. Most banks possess detailed statistics on accounts, balances, transactions and, in many cases, months or years of historical data.

This customer knowledge is a true corporate asset and, among other things, it can provide the answer to the question: “how do you determine when the right time to speak with customers is?”

Contained in bank customer data are useful elements we call events. Events are the keys to finding the right time to contact a customer. In bank data terms, events can encompass many things, including:

It is important to note that all these things have something important in common: they are all captured and stored in some way and data about them can be accessed. Events give us one-half of the necessary ingredients for a successful, right time marketing program.

The other half of the equation is made up of processes called triggers. For our purposes, we’ll define a trigger as an automated systems procedure that initiates an action when an event is recorded or observed. Triggers can be used to create daily call lists and targeted direct mail or e-mail or can populate inbound call center prompts. And, while event triggers are most common on the retail side of the house, business banking and even wealth management have begun to see the benefit of using this approach.

Major Trigger Types

The following proven triggers are being used by many of our clients in right time marketing.

Onboarding Triggers

Onboarding is a process whereby the bank attempts to “cement” new relationships by contacting customers at regular, planned intervals following the opening of the new account(s). Onboarding lends itself very easily to the kind of process automation our clients seek. Indeed, any sizeable bank will need to automate their Onboarding process simply due to the large volume of new relationships the bank likely measures on a weekly and monthly basis. We have seen client requests for Onboarding to be included in our system’s triggers hundredsfold over the past two years.

It’s easy to see why. As head count decreases and the need for banks to optimize every conversation for cross-solving purposes increases, automating the contact process is the only way to stay ahead of the game. The timing of the triggers can vary—“222” programs are common. A “222” Onboarding ensures the new customer is contacted two days after the new account is opened, followed by another outbound contact two weeks after the open date and a third contact by the bank two months after the initial open date.

A couple of additional “tips” on Onboarding triggers. First, while a great deal of cross-solving is accomplished during those initial three touches, reaching out to the new customer consistently during the first year of the relationship bears great fruit. Second, mix the channels. Use a letter for the first contact, a call from the branch manager for the second contact, and so on.

Maturing Product Triggers

Like Onboarding, triggers for maturing products are relatively easy to set up and conceptually easy to understand. The trigger is positioned to select relationships which have a maturing product (typically a loan or time deposit) at a specified interval before the product matures. Our experience indicates this kind of trigger is most successful when the contact is an outbound call from the branch, as opposed to a letter or an e-mail.

The dialogue that occurs with the customer in these situations is the critical element to ensuring the funds stay with the bank or a new or extended loan is established. Our clients have found a variety of other positive things result from these kinds of conversations, such as
additional funds being added, renewal of the loan with increased balances and certainly referrals to other areas of the bank.
Marketing Campaign Triggers

Our clients have enjoyed significant results by tying a carefully timed outbound telephone call to some or all customers (or prospects) that are, or will be, part of a bank mail or e-mail marketing campaign.

The trigger in these cases is used to time the outbound call to occur just before the mail is expected to arrive, just as the mail is expected to arrive or for a target number of days after the mail is expected to arrive. Our clients tell us that the most successful approach here is not to mention the mail, but rather to use the opportunity to reinforce the primary message and to create linkage to the mailing, thus reinforcing the campaign without pushing products.

Customer Behavior Triggers

Of all the triggers described to this point, it is this category—behavioral triggers—that often produces the most dramatic results. Unlike the other trigger categories, which are tied mostly to time since (or time until) a particular event and may or may not also tie to new or changing needs for that customer, behavior triggers, by their very design, are all about discovering—and acting on—immediate opportunities. Triggers based on customer behavior are also the most challenging trigger types, as they require a level of sophistication that the other trigger types may not.

The premise with behavior triggers is that by using statistical analysis techniques, it is possible to detect when a bank customer’s transaction behavior indicates new or changing financial needs. Some of the examples in this category are intuitive. For example, a customer whose deposit balances are declining may have new banking needs. On the other side, a customer whose balances suddenly begin to rise may have very different new needs.

One challenge associated with behavior-based triggers is to avoid creating what we call “false positives.” False positives are created when there is no real opportunity and the call or other contact with the customer is not productive. The key to preventing false positives is the application of business rules to filter out the events that do not require, and should not lead to, contact with the customer. On the business banking side, a false positive might be balance diminishment of $50,000 every two weeks. Without good knowledge of the customer, the banker might be concerned about this situation only to learn that the customer has payroll coming out of the account bi-weekly.

Another challenging aspect of behavior-based triggers is the data-requirement component. To accurately determine when a customer is behaving in ways that indicate new or changing financial needs requires not only their recent transaction behavior, but also a stream of transaction history for that same account and customer. We recommend a minimum of 90 days, but our approach has been found to be most accurate when a year or more of transaction data is made available. For a new customer, the Onboarding trigger can help you establish a pattern of deposit behavior that will help you and the system determine if the behavior trigger is a false positive.

Finally, accurate identification of behavior-based opportunities requires an integrated view of the entire household. Oftentimes we see money moving into or from an account, only to land in another account in the household. Without an accurate household view, following the money in motion becomes difficult and “false positives” result.

Results and Keys to Success

Customer triggers are an effective approach to determining when customers will be most receptive to a proactive communication from the bank. By tying contact of any kind (phone, mail, e-mail) to relevant times for the customer, results, both in terms of response rates and balance retention, can be significantly improved—as much as ten times—over traditional marketing targeting approaches. Specific results vary depending on many factors, most importantly is the extent to which the entire bank is behind the customer outreach effort. Our clients routinely measure balance lift of 5% or greater when they use triggers effectively and consistently.

Triggers are a catalyst for both increases in business on one side of the house and referrals to other parts of the bank. The technology won’t do it alone, however. Banks know that right time marketing done right leads to real results.

One key is to synergize the technology with the sales conversation. Another involves what St. Meyer & Hubbard calls Client Development Planning. This next level of customer profiling can be integrated into the technology so that birthdays, anniversaries, hobbies and other key customer life events can be used by the banker to enhance the relationship. How would you feel as a business owner if you received a card from your banker on the anniversary date of the founding of your business? That data can be loaded into the system and triggered to the banker to allow them to proact to that, and many other, situations. The technology, of course, is not the sales coach. For our system, or any system, to truly become part of the cultural DNA, the sales manager must interweave use of the technology into team meetings, one-on-ones and observations/coaching conversations.

About July Guest Columnist: Mike Berry

Conclusive Marketing is the umbrella firm for a group of companies focused on targeted marketing solutions and integrated campaign execution. Its clients range from automotive, financial services, non-profits and real estate, as well as travel and leisure markets. Synapse Technology became part of the Conclusive Marketing family in 2006. Synapse was founded in 1996 with the idea of combining marketing with technology to provide superior results. In 2001, Synapse added Transaction Behavior Marketing to its traditional targeted marketing database solutions intended for banks and financial institutions.

This is the second of our summer guest author series for 2007. We appreciate that Mike Berry would lend his expertise to Conversation Signposts this month. Mike can be reached by e-mail at: mike.berry@conclusivemarketing.com. His direct telephone number is 978.952-6756.

We’ll Be There

Here’s where SM&H associates will be appearing over the next months:

August 2007

7-10 North Carolina School of Banking
University of North Carolina

September 2007

24 North Carolina Bankers Association Retail Conference
Asheville, North Carolina

25-26, SM&H Public Sales Management Workshop (8 Seats Left)
Chicago, Illinois

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