Recently, we were speaking to a client about the various approaches he might take to improve his bank’s small business and commercial banking sales processes. He expressed frustration about the lack of increased sales even though his bank has changed internal processes and removed administrative tasks in order to free up the RMs’ time. Little of that investment in additional capacity was being translated to the bottom line. In addition, the bank’s culture largely precluded it from making significant staff changes to bring in stronger sales staff.

 

 

In our experience there are a finite number of levers that banks can exploit in order to build sales. We have seen every one of them succeed; we have seen every one of them fail. Implementation, that is, effective execution of the concept on a day-to-day basis, was and remains the critical factor determining success. Management should consider each of the areas on this “checklist” and determine which ones should become core at their institution.

 

 

Quantify sales potential.

Banks need to estimate the potential cross-sell from current customers and new sales from converting targets to clients. That exercise, while never perfectly accurate, helps to set priorities for staffing and marketing investments. It can also create leads for product specialty groups.

 

Account planning.

All banks say they do yearly account planning and most do something related to that effort. Account plans are usually inadequate in quality and are often ignored during the course of the year when, in fact, they should serve as critical guides to a bank’s action. Given the number of accounts they handle, small business bankers need to employ a one-page account plan. IT can assist in creating a tickler system that reminds the banker and the team leader of the focus for each account and the projected timing of various sales. Middle market account plans should be more detailed and incorporate the input of product specialists who conduct portfolio reviews to help in determining sales initiatives.

 

Hunter/skinner.

Many banks have changed processes to free up banker time for sales. These initiatives could add 15-25 percent of time to a banker’s day. But many bankers have neither the DNA nor the capability to turn that additional time into robust sales activity; instead they just add more administrative activities to the ones that have been moved away.

 

In effect, many bankers have become portfolio managers, good at managing credit and customer service. Most cannot be trained into becoming salespeople, yet banks continue to try. In response to that, some banks have shifted to a model in which there are “outside” and “inside” bankers. The outsiders primarily focus on sales to current and new clients; the insiders handle credit and customer service issues.

 

Sales coach.

At many banks, RMs lack the requisite sales skills; so too do the team leaders. In recent years, many team leaders have also fallen into an internal administrative role with little sales focus and, therefore, they may not be able to offer the necessary sales leadership. To address this need, some banks have appointed an overall sales head for small business and/or commercial banking. This person works with the team leaders and RMs to bring rigor and consistency to the bank across its footprint.

 

Ambassadors.

Several banks have added community leaders to introduce them to potential new businesses. These positions may be part-time or full-time; they may be salary based or largely dependent upon performance. Depending upon the needs of the bank, compensation can be tied to deposits, loans, or other areas.

 

Linkage with other product areas.

In recent work we completed for the Equipment Leasing and Finance Foundation (ELFF), we found that several banks had developed close linkages between their leasing groups and the commercial bank. In some cases the leasing area initiated the relationship and brought in the RM after the fact. Other banks lever their wealth management or cash management areas. Again, every bank says that their internal groups work together and to some degree they all do. What can make a difference to revenue is having close cooperation being the norm rather than the exception.

 

Teaming.

Banks always talk about operating with a team approach but, too often, the RM acts as if a client belongs to him rather than the bank. That level of possessiveness is no longer acceptable in an era in which banks must sell more to each customer if they are to make up for the revenue constraints in which they are now operating.

 

Concluding thought.

The above is hardly a complete list, but it does provide some of the major areas that banks need to exploit if they are to shift their culture from credit and service to include a sizeable component of selling success. In many cases, banks need to develop a frank (and sometimes painful) assessment of where they are in each of the above and similar areas. Usually, the gaps between current and optimal performance are huge. However, the good news is closing the gap can result in a very significant revenue boost, exactly what many banks need today.