END-TO-END RELATIONSHIPS AND FINANCIAL MANAGEMENT PROCESSES.2015.APRIL 10 2015.V4

Building End-To-End Relationships

A Focus on Sustainable Performance

Building Sustainable

Revenue Growth

in a Challenging Environment

April 2015


Tepid loan demand

Shrinking net interest margins

Fewer business owners looking to change banks

More and more banks competing

A difficult environment. . . but some Banking Executives

view revenue growth as attainable in 2015 and 2016

A Challenging Environment

2


1. A Sharp Focus on market segmentation (Know your Market. . . the

“Right” Clients, Prospects and COIs)

2. Building a “Business Acumen” approach to the market

(differentiating your brand. . . moving “beyond” Product Acumen)

3. A Stronger Focus on New Client Acquisition (for Loan Growth)

4. Building Wallet Share with single and double-service Clients

(expanding High-Potential relationships)

5. A Strong Focus on fee-based services (Moving “lenders” to

Bankers. . . changing the conversation)

Why?. . . A Strong Commitment to Revenue Growth

3


Let’s Go a Little Deeper. . .

4


In today’s banking environment customer service isn’t

enough to expand or acquire relationships.

Either you’re the low-price/low-structure provider. . .

Or, you differentiate your brand based on Business

Competence (Business Acumen)

Building a “Business Acumen” Approach

5


The “sea isn’t rising” in this cycle. There are too many

banks competing for too little business. So the question

becomes. . .

1. Are you any different than your competitors?

2. Is that difference compelling enough to overcome the

Business Owner’s inertia when it comes to making a

change?

The World Has Changed

6


THE MARKET IS

DIFFERENT TODAY

Building “Sustainable” Revenue Growth

7


1. Strategic issues are on the minds of Business Decision Makers.

a. Building “efficiency” has been a major focus for Business Decision

Makers during the recession and post-recession periods.

b. In 2014 and continuing into 2015, more than 30% of small and mid-sized

firms have considered adding to staff, CAPEX investment, a merger,

an acquisition, or sale of the business in the next 12 to 36 months;

they are thinking 1 to 3 years ahead.

c. However, few RMs are initiating conversations with Key Decision

Makers early enough to identify and develop these opportunities. They

are busy focusing on this year’s “product” goals, not the 12 to 36 month

“view” of the Business Owner.

The Market is Different. . .

8Greenwich Associates, 2014


2. Advice remains a critical “need” for many Decision Makers. . . providing

an opportunity for Bankers to win, expand and retain relationships by

building “business partnerships”.

a. Only 50% of Banks are providing “advice” [added-value] and that

“advice” is typically a “thinly veiled product sell”. (These Bankers are

demonstrating Product Acumen, not Business Acumen)

b. 50% of Decision Makers state that their Banker hasn’t “brought them

an unsolicited idea in a decade”. (These Bankers are demonstrating a

lack of Business Acumen)

3. About 16% of firms are actively seeking a new Treasury provider.

a. Decision Makers are looking for demonstrated value.

The Market is Different. . .


[The Comments in Blue are Mine!]


The Banks that are paying attention are going back to the

fundamentals. . . requiring increased discipline on resources and

segmentation to drive sustainable performance.

1. Reminding Team Members that 85-90% of the profits in the business

segment are driven by 10% of the business relationships.

2. Focusing on “High Value” and “High Potential” businesses and requiring that

they receive “high touch and distinctive value-added”.

3. Reminding Team Members that “Low Value” business customers require

good service that instills loyalty. . . but does not “over serve”.

And the Banks?

Are they Adjusting to the Market Changes?



Remember this data from a few minutes ago. . .

Advice remains a critical need for many Decision Makers. . . providing an

opportunity for Bankers to win, expand and retain relationships by building

“business partnerships”.

1. Only 50% of Banks are providing “advice” [added-value] and that “advice”

is typically a “thinly veiled product sell”. (In other words, these banks

are providing Product Acumen, not Business Acumen)

2. 50% of Business Decision Makers state that their Banker or Bank haven’t

“brought them an unsolicited idea in a decade”. (They may be providing

Product Acumen but are not providing Business Acumen)

Maybe Everybody is a Price Shopper Now. . .

11

[The Comments in Blue are Mine!]


Resources Most Often Relied on for Advice on Addressing Business Issues

Resource<$10,000,000

in Sales

>$10,000,000

in Sales

Internal Management Team 66% 63%

Peer at Another Company 20% 23%

Outside Consultant 17% 22%

Insurance Broker 11% 13%

Accountant 16% 11%

Business or Commercial Banker 10% 4%

Lawyer 3% 3%

Investment Banker 2% 1%

Other 9% 6%

So Where Does that Leave Us? Resources, Business

“Advice” and “Business Acumen”

12


13Beverage Distributor

Business Issues, Opportunities and Challenges. . .

Building Relationships Based on Business Acumen


Business Acumen and Product Acumen

are Not the Same

14

Business Acumen

Product Acumen (and the “RFP”)


15

[3.] Bring “Unsolicited Ideas” to the table; Ideas to Optimize Financial

Management Processes that are changing now or the next 3 years!

[1.] Understand the Business Issues, the Opportunities, and the

Challenges that are changing the Business Operations now or

in the next 3 years.

[2.] Understand the Financial Management Processes that are changing now

or may change in the next 3 years.

Changing Business Issues drive a change

in Financial Needs. . . align with What is Changing


Resources Most Often Relied on for Advice on Addressing Business Issues

ResourceBusiness

Banking

Commercial

Banking

Internal Management Team 66% 63%

Peer at Another Company 20% 23%

Outside Consultant 17% 22%

My Insurance Broker 11% 13%

Accountant 16% 11%

Business/Commercial Banker 10% 4%

Lawyer 3% 3%

Investment Banker 2% 1%

Other 9% 6%

Business Acumen. . . Changing the Conversation

16

Many Business Decision Makers will allow you to choose

the Conversation you will have with them


Not all Business Owners want the same level of relationship with a Banker;

Not all Bankers can respond to each level of relationship.

Decision Maker’s Relationship “Value Drivers” Vary(So It’s Not Just RM Skills, it Depends on the Business Owner too)

17


Not all Business Owners want the same level of relationship with a Banker;

Not all Bankers can respond to each level of relationship.

Business Owner’s Relationship “Value Drivers” Vary(So It’s Not Just RM Skills, it Depends on the Business Owner too)

18

Business Acumen

Product Acumen (and the RFP)


Focus on what’s changing in the Decision Maker’s Business and

Personal life.

1. Helping a Business Owner manage changes has a higher sense

of urgency than comparing products.

2. Aligning with what is urgent to the Business Owner has a higher

impact on his Inertia. . . and ultimately his Loyalty.

This is the differentiator. . . Business Acumen.

The mantra in this environment. . . Sell to what’s changing!

A Theme. . . for a Challenging Environment

19


For a significant number of Business Owners Business Acumen is

more important than Product Acumen. . . and for that group Business

Acumen is the highest level of Customer Service.

Business Acumen* is bringing Business Issue Insights and Unsolicited

Ideas to the table. It is a significant “differentiator” in a competitive

marketplace and is highly effective in proactive situations.

Product Acumen and traditional Customer Service are important in

reactive situations. It is less of a differentiator in proactive situations.

*Business Acumen is Conversational Competence in Business Issues; it is not the same

as a “Business Expert or Industry Expert”. Business Acumen, as we are discussing it,

is Conversational Competence around the “Industry Sector Changes and potential

Business Challenges affecting businesses within that industry”.

The Re-Definition of Customer Service

20


SHARPEN THE FOCUS,

CHANGE THE CONVERSATION

21


Business Owner

DDA DDA

MMA MMA

Web-Based Banking/Cash Management Web-Based Banking

Line of Credit Investments

Equipment Loan/Lease Retirement Planning/Retirement Plan

Commercial Mortgage Jumbo Mortgage

401(k) Home Equity Lines or Loans

Liability Insurance Life Insurance

Key Man Insurance, Buy/Sell Agreement

Total: 9 Total: 8

Revenue Increases from End-to-End Relationships

22

Business Services: 15-years, $2,500,000 in sales

Think 65% of the

“Relationship”


Business Partners(s)

DDA/Cash Management DDA

MMA MMA

Line of Credit, Acquisition Financing Web-Based Banking

Equipment Loan/Lease Private Banking

Commercial Mortgage Investment Management

Payroll Retirement Planning/Retirement Plan

Merchant Account Jumbo Mortgage




Total: 10 Total: 9


23

Professional Practice: 18-years, $6,500,000 in sales

Think 65% of the

“Relationship”



24

Distributor: 28-years, $28,500,000 in sales

Company Decision Makers, Key Employees

Treasury Management Private Banking

Working Capital, Acquisition Financing Investments

Equipment Loans/Leases Jumbo Mortgage

Commercial Mortgage Home Equity Lines or Loans

Swaps, Derivatives Life Insurance

Investments Retirement Planning/Retirement Plan

401(k) Estate Planning

Liability Insurance


Employee Banking

Total: 10 Total: 7

Think 65% of the

“Relationship”


The Road Map for Sharpening the Focus

Three Focal Points. . .

25


Think it Through!

1. What’s changing in the industry sector in which the Business operates?

Now think it through. . .

2. Will that create Business Issues, Opportunities and Challenges for the business

in the next 12, 24, 36 months? What might those Issues, Opportunities and

Challenges look like?

3. How might those changes affect change in his Business Operations?

4. How will changing the Business Operations change the underlying Financial

Management Processes of the Business?

5. Looking at the current Financial Management Processes (not the products). Which

of those processes may not be optimal for what may change in the next 12, 24 and

36 months.

6. Build a conversation with the Decision Maker around steps 1 through 5!

Developing Relationships is a Cognitive Process

26


27

[3.] Bring “Unsolicited Ideas” to the table; Ideas to Optimize Financial

Management Processes that are changing now or the next 3 years!

[1.] Understand the Business Issues, the Opportunities, and the

Challenges that are changing the Business Operations now or

in the next 3 years.

[2.] Understand the Financial Management Processes that are changing now

or may change in the next 3 years.

Changing Business Issues drive a change

in Financial Needs. . . align with What is Changing


Product Solutions “Support” Financial Processes,

they are not the Processes

28

Financial Management Processes use Products to Optimize

an element of those Processes

Cash Position [Operating Account]

• IB Checking

• NIB Checking

• Data Services

• Imaging Services

• Information Reporting

Receivables

• Cash Concentration

• Cashiering

• Image Deposits

• Lockbox Services

Payables

• ACH Services

• Controlled Disbursement

• Integrated Payables

• Payroll

• Wire

Too Little Cash[Credit]

• ABL

• Commercial Card

• Credit Card

• Credit Sweep

• CRE Loan

• Lease

• Revolver/LOC

• Standby Letter of Credit

• Syndication (Lead)

• Trade Finance

• Term Loan

Too Much Cash[Investments]

• Asset Management

• CD

• Corporate Trust/Escrow

• Custody

• Endowments & Foundations

• 401(k) Plans

• Investment Sweep

• Money Market

• Savings

RiskMitigation

• Derivatives

• FX

• Fraud Protection

• Insurance

• Letter of Credit

• Reconcilement Services

• Trade Services

Personal Banking

• Personal Investments

• Personal Trust*

• PB Deposits

• PB Loans

• Consumer Solutions*

• HELOAN

• HELOC

• Mortgage

• Other Loans

• Checking

• Savings


29

Focus on Processes that are Changing. . .

not Products

The End-to-End Financial Management Processes. . .


30

Focus on Processes that are Changing. . .

not Products

The End-to-End Financial Management Processes include the

Personal Life of the Business Owner


Then Link the Changing Financial Management Processes

to Products (and then the Revenue)

31


Now Optimize any Areas of Concern

32

Electronic

Collection

Investments

Credit

Card

Disbursements

ChecksMerchant

ServicesCash

Electronic

Payments

Check

Payments

Private Banking

Personal BankingOperating Account

Payables Areas of Concern

1. Wants to reduce any possibility of fraud

exposure when using wireless networks

2. Would like to simplify payables and move

everything to one credit card

Payables Optimized

1. Integrated Payments

2. Corporate Card/Purchasing Card, if can

compete with American Express

Membership Rewards

Receivables Areas of Concern

1. Delay in deposits and checks coming to home

2. Concerns about website payments flowing

through multiple vendors (Website Host,

PayPal, Merchant Card Processor, Bank

Receivables Optimized

1. Lockbox

2. Schedule meeting with Merchant

Service Representative

Cash PositionAreas of Concern

1. Operating Line may not be sufficient to handle

several new clients

2. Would like to see all online accounts listed on

one screen, with real time reporting and a single

log on to simplify use (business and personal)

3. Wants to upgrade data systems, hardware and

software within the next two years

4. Potential acquisition of a new firm

5. Considering purchasing a townhouse for his child

Cash PositionOptimized

1. New Operating Line with higher limit

2. Business Online Banking, Single

View

3. Equipment Leasing

4. Acquisition Financing

5. Personal Real Estate Loan


Business Partners(s)

DDA/Cash Management DDA

MMA MMA

Line of Credit, Acquisition Financing Web-Based Banking

Equipment Loan/Lease Private Banking

Commercial Mortgage Investment Management

Payroll Retirement Planning/Retirement Plan

Merchant Account Jumbo Mortgage




Total: 10 Total: 9

Revenue Increases from Multiple Sources

33

Professional Practice: 18-years, $8,500,000 in sales

Think 65% of the

“Relationship”


What do You Know about the Business?Developing a Relationship Requires a Strategy and a Plan

34

The Financial Management

Processes change as the

Business Changes. . .

Developing a Relationship

starts with Knowing What’s

Changing in the Business

and the Business Owner’s

Life.


What do You Know about the Business?Developing a Relationship Requires a Strategy and a Plan

35

The RM is the Primary

Strategist. . . and a well

thought-out Strategy

requires multiple eyes

and multiple brains.

It requires a

Relationship Team

to both Build and

Execute the Strategy.


It Takes a Team to. . .Think Through How you can “Partner” with a Business Owner to Meet

Changing Opportunities and Challenges

36


The Road Map for Leading the Processes

Three Focal Points. . .

37

Weekly

1. On-Going 1-on-1 Coaching of the

Defined Processes (the How-To’s).

2. Coaching based on Skills, not on

Concepts.

3. Coaching the to the Stages of

Relationship Development

4. Coaching the Key Technical

Skills

CoachingGuiding Consistent

Execution of the Critical

Process Elements

Articulated

ProcessesFully Defined Sales and

Sales Leadership Processes

1. Fully Defined Sales Leadership

Processes

2. Fully Defined Market

Management and Relationship

Development Processes

1. Vertically Aligned Messaging around each

Defined Process

2. Weekly Messaging on the strategic

importance of the Defined Processes

3. Linking all Market Strategies, Relationship

Strategies and Client Experience Expectations

to the Defined Processes

1. Expectations for the weekly use

of the key elements of the

Defined Processes.

2. Accountability for weekly use of

the key elements of the Defined

Processes.

1. Weekly “Look Ahead” Sales Meetings to maintain the Priorities and the Focus

Maintaining Weekly Priority on Opportunity Generation with Targeted Relationships

Maintaining Weekly Focus on Pipeline Pull-Through

Maintaining Weekly Focus on Activity and Call Balance Expectations

AccountabilityEnsuring Consistent

Use of the Defined and

Articulated Processes

1. Scheduled Coaching for all Team Members

every other Week

Coaching Relationship Development Skills at the 5-foot Level

Coaching Market Development Skills at the 5-foot Level

Coaching according to the “Stages”

2. Observation Calls with each Team Member

Monthly

3. Effectively Coaching Technical Skills

1

2 Weekly

3

Weekly

END-TO-END RELATIONSHIPS AND FINANCIAL MANAGEMENT PROCESSES.2015.APRIL 10 2015.V4

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Transcript of END-TO-END RELATIONSHIPS AND FINANCIAL MANAGEMENT PROCESSES.2015.APRIL 10 2015.V4