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

Relationship Development Series

Can Branch Managers

Prospect Effectively?

Buck Bierly MZ BIERLY CONSULTING, INC.

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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

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• 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

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Yes. . . and No.

There are opportunities. . .

Consistent execution is the dilemma.

The Short Answer

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Most Current Data

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Most Current Data

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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

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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

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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

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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

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Professional Practice: 10-years, $750,000 in sales. 65% of the

“Relationship”



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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”


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


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Distributor: 15-years, $3,500,000 in sales. 65% of the

“Relationship”


BUILDING RELATIONSHIPS WITH

SME BUSINESS OWNERS

A Focus on Relationships

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Are There Opportunities?

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The Human Touch

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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


The Key Skills from

the Study.

Data from the Enterprise Council on Small Business 17

A Human Touch is Needed for Relationships


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!)

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A REAL-LIFE LOOK AT BUILDING

“RELATIONSHIPS”

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A Focus on Relationships


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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


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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


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”

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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)

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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?

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Small Business Model in “Play” To win they had to “differentiate” the Customer Experience

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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. . .

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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

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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

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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

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BUILDING

SUSTAINABLE RESULTS

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The 5 Key Elements


Managing Market and Relationship Strategies

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Managing Market and Relationship Strategies

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DEFINE THE MARKET AND

BUILD A FOCUS

Key Element #1

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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

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Lead Generation

Qualifying

ProposalInternal Sale

External Sale

Closed

Transaction

Build Long-

Term

Relationship

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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


Segment the Client Base

1. Retention Relationships

2. Expansion Relationships

3. Acquisition Relationships

4. Other Clients

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Key Element #1: Stay Focused on the “Right” Clients

(An Example of Key Relationships)


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.

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Key Element #1: Stay Focused on the “Right” Clients

(An Example of Key Relationships)


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

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Key Element #1: Stay Focused on the “Right” Businesses

(A Profile of Expansion and Acquisition Relationships)

Defining the “Market” you want to Focus on


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

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Key Element #1: Stay Focused on the “Right” Businesses

(A Profile of Expansion and Acquisition Relationships)

Defining the “Businesses” you want to Focus on


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

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Key Element #1:

Stay Focused on the Key Relationships


CHANGE THE CONVERSATION

Key Element #2

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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

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Each Relationship Development

Meeting is a Structured

Communication Process.


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


Relationship Development

Meetings are all about building

momentum.

Step 2 is the key.

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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


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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

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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.

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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.


STRENGTHEN

EXPANSION RELATIONSHIPS

Key Element #3

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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.

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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

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Proactively Expanding Relationships. . .

Focus Requires a Strategy and a Plan

Build a Client Folder



Requires a Strategy and a Plan

What do you know,

what don’t you know

about the business?

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Determine possible opportunities


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Requires a Strategy and a Plan

How can you help Optimize Meeting

the Owner’s Issues and Challenges?


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.

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Requires Consistent Execution


ACQUIRING

NEW RELATIONSHIPS

Key Element #4

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Acquiring New Relationships

These are the 8 Elements in

the New Client Acquisition

Process. These are the

process elements that drive

Banker Success.

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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

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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.”


Ineffective “Best Practices” for Building Prospect Lists

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0%

10%

20%

30%

40%

50%

60%

Co

nv

ers

ion

Rate

(%

)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

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First Choice


Getting in the Door

Working your Network List to get a

Testimonial Referral.



Prepare!

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Again, Preparation and Execution

of the preparation are key drivers

of success.


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)

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Build the Prospect Folder.


Build the Prospect Folder


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


Build a Strategy

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Due Your Homework on the Industry


Industry Trends create Changes in the Business

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Understand the Industry Trends and

Issues.


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


Looking for Changes in the Business

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Using First Research, Hoovers, or RMA

Statement Studies. . .

Anticipate Changes in the Financial Operations

of the Business.

Do Your Homework on the

Business.

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Looking for Changes in the Business


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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).


Changing the Conversation


COACHING THE TEAM

Key Element #5

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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?

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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

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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?


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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.


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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

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

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