Last week, at the American Banker’s Small Business Banking Conference, I led a panel discussion of small business bankers focusing on how to get the branch to proactively sell to small businesses. Apparently, no small task.
The discussion centered on the importance of the branch in selling to small businesses, the practical roadblocks that keep branch bankers from selling, and some specific steps that banks can take to make it more likely that the branch will give small businesses higher priority.
The bankers attending that conference, as well those at the Consumer Banking Association’s small business conference a week earlier, highlighted the lack of proactive selling by most branch bankers. While the audiences at these conferences were dominated by North Americans, given our work in about 20 countries, we know that this branch issue crosses borders and is a significant concern around the world.
Roadblocks to Branch Selling
Most of the attendees I spoke with at the two conferences believed that their branch personnel concentrated on customer service-related issues rather than sales. The branches’ natural orientation centered on service; conversely, actively diagnosing sales opportunities and pitching products and services were outside their branch bankers’ comfort zones and simply did not occur with consistency.
During these conferences, banker comments resulted in an informal but informed list of the many and varied reasons why branch bankers fail to engage in selling to small businesses. This list captures a litany of long-heard branch complaints and constraints, including: insufficient branch product knowledge; little, if any, sales training for branch bankers aimed at the business customer; products too many in number and too complex for branch personnel; branch personnel lacking the time to focus on small businesses; and, incentives inadequately encouraging the branch to focus on businesses. Apparently, the list could continue on almost endlessly.
Barriers are Often Self-Built
Toward the end of our panel discussion, one of the bankers responded to the myriad branch roadblocks by stating with remarkable candor, “It’s a crock.” His bluntly-stated point was that branch bankers highlighted these roadblocks or, in some cases, created them in order to avoid having to operate outside their comfort zone. In effect they do not want to sell to small businesses, so they embrace any available excuse. Based upon my consulting experience, he is largely right; bank management needs to address this reality and its implications. Further, as we will discuss, this situation is hardly unique to branch bankers.
In many ways, the branch issues highlighted above are similar to what we hear from small business and middle market bankers concerning their roadblocks to sales. They too can cite multiple barriers to selling, including a customer who demands that the banker service them, (neither an administrative assistant nor portfolio manager will do), specialty groups that are not as client-oriented as they are (and from whom the client must be protected), and management that does not understand that they are individual artists following their own personally-developed sales practices rather than craftsmen who can be tied to institutionalized sales management structures and processes.
As this panelist was indicating, too often bankers love to raise up impediments and, in effect, hide behind, rather than face up to, manageable challenges. Whether it be the branch manager who says he does not have time to sell to small businesses or the middle market banker who points out how his (not the bank’s, but his) customer relies on him for day-to-day administrative and operational needs, senior bank managers need to understand that they often enable and encourage a culture in which sales takes a backseat to account maintenance and customer service.
In his book Winning, Jack Welch writes of a company’s employees as being divided into three groups, what he terms 20-70-10, meaning the top 20 percent of performers, the middle 70 percent, and the bottom 10 percent. The top 20 percent determine how to get things done if impediments do exist. The bottom 10 percent fail to perform under the best of circumstances. These are the workers who need to be fired (but within banks often are not). The third group comprising 70 percent of the employees plays a critical role in determining the success of your company. In particular, that group requires leadership to focus their efforts. Otherwise, they will focus on the barriers, build them higher, and, potentially, join the bottom 10
Break the Sales Barriers
Bank management needs to ensure that they uncover and remove legitimate barriers to branch sales success. Oftentimes, the products may in fact be too complex and inappropriate for customer needs; sales training often is inadequate, and compensation does fail to incent a sales focus; sometimes the administrative staff is incapable of meeting client demands. Management’s first job is to aggressively address problem areas to eliminate sales barriers, but the employees cannot symbolically sit with folded arms remaining distant from this process and hoping that “this too shall pass.”
Senior management, both in the small business arena and beyond, needs to have the courage and self confidence to confront sales barriers. Saying “It’s a crock” to a bank employee goes against the culture of politeness and conflict avoidance that governs most companies, banks and non-banks alike. But a top management that avoids candor (another Jack Welch term) undercuts its own credibility and authority and ultimately suffers subpar performance.