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Help Me Understand – My Plate is Too Full

By Jack Hubbard, Chief Experience Officer

In our April 2007 column we explored Pipedream meetings and why they continue to be around the room reporting sessions instead of delving into winning strategies and success practices. We had a good amount of feedback from sales managers who indicate they have tried to liven up their sessions only to find a great deal of apathy from their bankers. We had an equal dose of commentary from business bankers who question the creativity and preparation of sales managers when it comes to team meetings.

Perhaps the most interesting responses came around the day and time of the team meeting. For the life of me I can’t understand any condition under which a team meeting would be held in the middle of a week or in the middle of the day. Statistics suggest the best days to make sales calls are Tuesday, Wednesday and Thursday. Between 11-1 PM bankers should be dining with someone that can actually buy something, not their buddies. Mid-day meetings break momentum. Best time for a team meeting? We suggest to our clients that Monday between 7:30-8:30 AM is nirvana. It gets the day and the week off to a great start.

Finally, one reader loved the idea of asking to sit in on a sales meeting of a good client but was concerned that the client might find them too “salesy.” Do we need to make a comment about this banker’s future in sales?

OK here’s one for you. I got a call from a banker this month complaining she was swamped and that her manager was still forcing her to get her feet on the street. What should she do? It’s not the first time I have sampled this fine sales whine. I have not been shy to take sales managers to task when they deserve it in this space. This time it’s not the manager’s issue. Lots of sales people want it both ways. They want job security (which they create themselves by doing the right things right), an endless font of income and perks and balance in their lives. Many aren’t willing; however, to do what is needed to get what is wanted. Maybe we should recommend this complainant take a Time Management Workshop. Please! How about doing what I suggested to our daughter when she got into the sales business right out of college three years ago:

“You are obviously a grumpy old man with no life, Jack. I need some balance.” Grumpy old men need that as well. Two things about balance. First, when someone gives balance as an excuse for average effort I can tell their passion for performance is missing. When someone fully commits to the present with their career and to their family and to themselves, the balance takes care of itself. The second thing that great sales people know is that if they do what is suggested above they never have to worry about the balance…in their checking account.

Let us hear your take on the Full Plate Syndrome.

Retail Banking and the Business Customer

By Julie Ruffolo, Executive Vice President

Background

Micro/Small Business continues to be a mega-profit segment and with over 20 million businesses with $1million in sales or less, banks continue to find creative ways to compete in this space. We learned in our survey that Retail Banking is engaged in this strategy in a variety of ways. Both deposit and loan gathering are potential responsibilities for retail bankers. Tier 1 banks (banks of $50billion or larger) tend to assign sales responsibilities to their bankers, particularly branch managers or designated small business bankers. In some unique situations, branch managers look for deposits while business bankers try to find loans.

High-Level Findings

Many banks have shifted a significant amount of responsibility for Micro Business to the retail division. Targeting micro businesses is typically accomplished using either sales size or by the size of the credit needed. Usual suspects are firms with less than $2 million in sales (one bank in the $30billion range targets under $3 million and one bank with approximately $5billion in assets focuses on companies with under $5 million). Loan segmentation varied from $50,000 to $250,000 with only two banks at or above the $500,000 threshold. The push for deposits has caused many banks to create specialty units that target DDA-rich industries. Some organizations are creating medical specialty units that report up through retail banking as well as using branch managers to call aggressively on funeral homes, title companies, rental agencies, consulting firms, and other service companies.

A Key Deficit

Eighty-Five percent of banks surveyed assign outside calling responsibilities to retail bankers, yet there is little done to prepare these individuals to take their conversations from short cycle selling to a longer customer buying cycle. Worse yet banks are putting retail bankers’ feet on the street with little or no understanding of how a business makes money or knowledge of daily operational issues. Two-thirds of the banks surveyed admit they are deficient in this area. Around 15% of respondents suggested they have specialized training programs to provide skills for retail bankers. Topics mentioned included: business issues, making effective calls, needs assessment, structures of small businesses, calling on targeted industries, pricing structures (LIBOR, prime), working with centralized credit, cash flow, business etiquette and product knowledge. First Research is available to retail bankers in 14.6% of the organizations surveyed – a shockingly low number

Small Business Improvement Ideas from Charles Wendel

Founded in 1995 Financial Institutions Consulting (FIC) focuses on issues of productivity and growth within the financial services industry. FIC President, Charles Wendel has extensive experience as a banker and a consultant. He is a well-known public commentator on industry issues and a personal advisor to industry leaders. FIC’s publication, SME Newsletter, provides many practical ideas on issues facing banks that operate in the small business and middle market niches. Charles gave us permission to print some snippets from his latest newsletter entitled Creating a Small Business Profit Checklist. This is great stuff.

Banks want to maximize profits from their small business efforts. This newsletter provides a brief "profit maximization" checklist for banks to follow, whether they are organized on a geographic or functional basis. Our (FIC) view is that, if a bank ensures that these practices are followed across the bank, its returns on small business will increase substantially. Below we provide a list of actions that banks should ensure are occurring across all geographies and branches. 

* Price loans based on deposit levels. For various reasons, relatively few banks apply anything but the most rudimentary risk-based pricing to small business loans. The competitive environment and, oftentimes, a limited information base curtail this approach. However, banks can easily price loans based upon the deposit levels of their customers. Several banks we know do so, offering a two- or three-tier pricing structure based upon the amount of balances on deposit.

* Require deposit hurdles for incentive payments. If you want to increase deposits, set a performance hurdle tied to deposits. Basically, before a branch banker or RM qualifies for an incentive he/she should generate a certain level of net new deposits. Lots of loans but insufficient deposits means no incentive. Conversely, lots of deposits but insufficient loans may result in an incentive. This approach places a clear and well-communicated emphasis on deposit generation.

* Make sure your first sale is a multi-product sale. Several years ago, one bank's internal study showed that when a customer comes into a branch to open a business checking account, that is exactly what they do; open a checking account and no more. Increasingly, banks are now trying to program their branch personnel to sell multiple business and personal services at the time of DDA account opening. Many of these are easy sales that serve to tie the customer to the bank, including business debit, online banking, and overdraft protection.

* Sell to the owner and the business from day one. Again as part of the account opening process, more banks are creating a package that links the owner and the business, thereby encouraging owners to bring their personal business to their business bank. Higher consumer deposit rates and lower borrowing rates support this effort.

Thanks for the great ideas, Charles. To subscribe to the free SME Newsletter simply click on www.ficinc.com. Want a copy of SM&H’s 2007 Retail White Paper? Send an e-mail to jhubbard@stmeyerandhubbard.com and we’ll provide one.

Some Exciting News from First Research

Our friends at First Research have done it again. Users can now access profiles via wireless sources. Subscribers will also find significant enhancements to the First Research website making entrée to the best Industry Intelligence Tools more consistent and convenient then ever. 

“Offering wireless access in conjunction with the rollout of a new enhanced subscriber site directly aligns with how our customers use and want to access Industry Intelligence,” says Bobby Martin, President and Co-founder, First Research. “These enhancements are based on user feedback and incorporate new features and functionality to give our subscribers the competitive edge to win more business.”

Key subscriber site enhancements include:

First Research subscribers can easily access content via BlackBerry®, Palm® or Windows® PDA, or Web-enabled cell phone by simply logging into the user site and clicking ‘Wireless Access’.

“Now that I can access First Research on my wireless device, it’s easier to do my job,” says Steve Covil, senior vice president, First Citizens Bank. “Like most sales professionals, I’m always on the go. There is tremendous value in having wireless access to the Industry Intelligence I need, whenever and wherever I need it.”

To learn more about how you can access First Research Industry Intelligence Tools, visit www.firstresearch.com.

Two New Workshops from St. Meyer & Hubbard

Long time readers of our publication know that we very rarely talk about who we are and what we do. That is purposeful. There are too many e-zines out there that are simply electronic brochures instead of being practical and useable. There are times; however, when something so good comes along that we have to discuss it. We are please to inform our readers about two new programs available now; Using First Research Strategically and Talking Business with Small Business.

Using First Research Strategically

More than 500 banks subscribe to First Research. For the life of us we can’t understand why every bank doesn’t. The challenge many times, is that while the bank provides this amazing tool, bankers do not use it as part of their overall sales process. We’re out to change that. After highly successful pilot sessions at two banks and more than 100 bankers, we are now offering this program to our industry. We are proud that First Research made SM&H the exclusive consultant to provide this training.

Using First Research Strategically is a one-half day program that integrates the First Research profiles into skills such as; generating telephone appointments, effectively preparing for calls, exhibiting credibility on calls and following-up with a VIP (Value Impressions Positive) approach. Workshops are limited to 16 bankers. First Research is used live during the session to add to the practicality and hands-on approach. The one-half day approach allows the bank to hold two sessions a day and serves to minimize time away from the office.

The pilot banks have seen usage of First Research rise by almost 60% within one month and the bankers report a steady increase in initial appointments and positive comments from clients and pre-clients from the value-adds they now know how to send. A sales management job aid is provided to help sustain usage of the profiles over time.

For information about Using First Research Strategically contact Mike Dillon, Senior Vice President, St. Meyer & Hubbard at 815-725-9588 or via e-mail at mdillon@stmeyerandhubbard.com.

Talking Business with Small Business

One of my all-time favorite business terms is co-opetition; having competitors cooperate for the general good. Such is the case with Talking Business with Small Business. This two-day program was created by Nick Miller, President of Clarity Advantage. This program was born out of the great need that branch managers and retail bankers have to learn more about how a business runs. Greater knowledge creates confidence which is a pathway to more sales, more revenue and happier customers.

In his research Nick found that:

Talking Business with Small Business introduces skills and tools that help bankers:

Understand the dynamics of business and financial issues

The workshop uses an interactive simulation that gets bankers engaged immediately and before long they leave the realm of banking and become entrepreneurs. Participants receive a manual and job aids they will refer to again and again. Our entire staff experienced Nick’s program and they found it stimulating and practical.

Nick Miller is honest, straight forward and his company has always been our most respected competitor. He has brought something to banking at the right time and we were in the right place to partner with him in this endeavor. We are proud to co-opetate.

For information about Talking Business with Small Business contact Mike Dillon, Senior Vice President, St. Meyer & Hubbard at 815-725-9588 or via e-mail at mdillon@stmeyerandhubbard.com.

Register for Conversation Signposts

Margins are squeezed and the yield curve is inverted. Boo, Hoo. Bankers that take control of their sales lives tell us the articles and ideas in Conversation Signposts make a difference regardless of curves and yields – stuff they can’t control in the first place. If someone else at your bank could benefit from Conversation Signposts, forward this edition to them and have them click on the hyperlink below to register: it’s FREE.

http://www.stmeyerandhubbard.com/signup.html

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