Barriers to Relationship Selling
How does one sell a relationship? And, if you figure out how to sell one, what should you charge for it?
If your organization has reached a plateau or even backed off trying to create a sales culture, let’s take a few minutes and assess what may be getting in the way of your success. Step one in developing a relationship selling program, or any other selling program, is to change the perception of what sales looks like in financial service organizations. Sales needs to be seen as helping, not pushing products.
Social barriers are the negative perceptions of the sales function (i.e., that vague, uneasy feeling that selling is dirty, that “SELL” is a four-letter word, that nice people don’t do it, “professional people” don’t do it, bankers should not have to do it, etc.).
Cultural barriers are expressed most easily by the phrase, “I don’t want to sell. I didn’t get my college degree to become a salesperson. If I had wanted to sell, I would not have joined a bank!”
That mindset must go. Especially since that mindset is too often expressed by people in key positions in the bank; positions where sales productivity is a must. Bet on it, the actions of those individuals set the tone for the entire organization. The head of commercial lending, the manager of the trust/wealth management area, and the person in charge of branch administration must sell or be replaced. Eighty percent of what employees value and what they do comes from what they see their leaders doing.
People resent having to sell because of the negative perceptions mentioned above. These are alternately caused by – and the causes of – a lack of understanding of what professional selling is and the fear of failure. Most of us are just a little bit frightened by that which we don’t understand, and selling is something that many bankers do not truly understand.
Start with the fear of failure. In relationship selling, it is impossible to fail if you do three things:
1) Make enough calls. 2) Engage with each prospect and learn about him/her and his/her needs and 3) Never, never suggest a product or service until you understand what is needed.
If you inject a bit of sales management into the equation, you’ve got yourself a real winner. (Teaching and coaching the skills required for successful calling.) If your people are willing to make calls with consistency and persistence, they will succeed.
If any of you doubt the value of persistence, consider these three facts:
80% of sales are made by 20% of salespeople.
80% of all sales are made after the fifth call.
80% of all salespeople quit after the second unsuccessful call.
Do your perceptions of selling need to be changed? When you ask people in word association games to respond to the word “sales,” the most heard response is “used car.” It is not a pretty picture. Most images conjured up by the word “sales” are negative.
Why? Why are there so few counterbalancing positive images? The reasons for “sales ignorance” are not hard to discern. People are rarely exposed to real sales professionals. Often, when they are, they don’t recognize them as salespeople. They walk away from that experience saying, “That was a really pleasant experience; that person really understands me and what I’m looking for. I appreciate the time spent really getting to me and my needs.”
It’s very simple. Positive sales role models are so good at what they do, they seldom are perceived to be “selling.” They are “educating, consulting, solving problems, providing answers and helping.”
Stop for a moment and contemplate the people from whom you regularly buy products or services. With some, it is strictly habit or convenience. But, with most of your regular vendors, you stick with them because you like them, respect them, trust them and get value from them. That is relationship selling!
The real difference between product selling and relationship selling is a mind set about finding ways to help the customer. Don’t you have customers who need your help this week?
Is Your Vision Turning into a Nightmare?
As a recent transplant to a new community in a new state, I’ve found myself for the first time in many years, opening a new account at a new bank. Like most customers these days, I did some online research before showing up in person. Walking in the door I was quite familiar with the products, services and fees associated with various accounts because I’d checked out their web site in detail. My husband and I also brought with us a solid 50+ years of bank products user experience.
We, my husband and I, were the only customers in the bank. I’d engineered a mid-week, mid-afternoon time to avoid the “rush.” We were greeted warmly by two tellers who referred us to the Universal Banker for our account opening needs. Here’s a cautionary tale of how, as members of management, our visions can turn to nightmares if we are not observing our employees as they, with all good intentions, try to execute our expectations.
Here are a few snapshots of our new account opening and follow-up experiences so far:
“Hi, my name is John, I’m a Universal Banker at XYZ Community Bank. I’ve been a banker here for about 15 years. Actually I used to be at ABC Bank but we were acquired a couple of years ago. I’ve been here in this location for 15 years and I used to be a lender but now I do everything. What brought you folks in today?”
Me: “We are new to the community and while we have an account relationship with another bank, with a national presence, we feel the need to have a local bank relationship too. I’ve checked out your website and it looks like you have the type of checking account and online services that we need.”
John: “Oh, that’s great. I’m so glad you’ve selected our bank. We pride ourselves on service and I always make it practice to build solid relationships with my customers. Can I ask you a few questions?”
John: “What brought you to town? Do you live in this neighborhood? Where do you work?”
Me: (I think to myself, which of those three questions would you like me to answer first?) “We’ll be retiring here. We live about a mile from here. We just closed on our new home and moved in about a week ago so we are still finding our way around. Your bank is conveniently located for us. In fact we walked it is so close.”
Fast forward past the usual demographic information including my employment with a sales training organization.
John: “So are you renting?”
Me: “Nooooooooo, we purchased a house.”
John: “Well if you find you are in need of a mortgage we do lots of mortgages here at our bank and rates are pretty good right now.”
Me: (Thinking to myself) Well you may do lots of mortgages but listening seems to be in short supply.
Me to John: “That’s nice to know, but the ink is barely dry on our mortgage that we closed 5 days ago so I think we won’t be in the market for a while. And we are very satisfied with the rate.”
John: “Ok, that’s great. Let me tell you about our great checking accounts.” (And he prepares to give us the full rundown.)
Me: I can’t contain myself so I interrupt and say, “Maybe I can make this easier, we will write an occasional check. We will use online banking/bill pay for local bills such as utilities and our mortgage. We’ll deposit checks on occasion and we’ll want to change a direct deposit of a monthly pension to this account.”
John says, “What about mobile banking?”
Me: “Just online banking and bill pay will be fine.”
John: “Are you familiar with Mobile Banking?”
Me: “Yes I actually have Mobile Banking with our primary checking account. I really don’t feel the need to have Mobile Banking with this account.”
John: “Well, we can always set you up for it in the event you decide to use it.”
Me: “My husband doesn’t use a smart phone and I’m very clear that Mobile access on this account isn’t something I’ll use.”
Fast forward to the end of the new account opening process.
John: “So I make it a point to call all my new customers to be sure that everything is going ok. Is it ok if I call you to do that?”
Me: “Absolutely, I think that’s a good practice.”
Fast forward 2 weeks.
I received an email from John asking if we got our checks yet and if we ever had any loan needs to let him know. (Interesting as their practice is NOT to mail checks to customer’s home but rather to have customers pick them up at the bank.) My husband picked up our checks the previous week at the bank and John had given him a hearty “hello” as he left the bank, checks in hand. I responded to John’s email that indeed we’d picked up our checks, had set up our online services and squared away our safe deposit box. I do appreciate that he checked in on us.
Fast forward 3 more weeks. It’s Friday afternoon at 4:30 p.m. My cell phone rings.
“Hi, this is John at the bank. How’s the new account working?”
Me: “No problems. We’ve written some checks, used our debit cards and paid a few bills online. Everything seems to be just fine.”
John: “That’s great. I wonder if you’d do me a personal favor?”
Me: “What might that be?” (I’m feeling ever so slightly dubious about what it might be.)
John: “We are having a contest here at the bank and we are 2 short on our Mobile Banking goal. Do you think that you and your husband could enroll so that we can meet our contest goal?”
Me: (Some of the many thoughts that went through my mind were, “Gosh this is so “icky” I can’t believe I’m hearing him correctly. I can’t imagine his organization would condone this approach. Does he even remember meeting us and did he pay any attention to our new account discussion? ) “Sigh, well John, as I mentioned when you opened the account, we are satisfied with account access via online banking and it really doesn’t make sense to me to sign up for a service I don’t intend to use. I’m not sure your bank really wants that either.”
John: “Well ok, but what about your husband?
Wouldn’t he be interested in mobile banking?”
Me: “No he’s not a smart phone kind of guy.”
John: “Ok if you ever need a loan I’m the guy to see.”
Me: “Thanks, I’ll keep that in mind.”
I have to hand it to John. He, unlike many employees we see, was making valiant attempts to stay connected to a new customers. If only he’d paid more attention in our first interaction, maybe made some notes about his new customers, asked a few more questions so he’d learned more about us the interactions could have been quite different.
The First Follow-Up Contact
The first email contact to check on the new account services could have lead with something more personal. Something like, I hope you are finding your way around our community. I seem to remember that you like to walk. Did you know that very close to your neighborhood there’s a series of walking trails that looks out over the river? It’s called the Bluff Trail and it is right off Panorama Drive. Also in the same area there’s a great little café with outdoor seating.
I see in our system that you’ve had a chance to write some checks and use your ATM cards. How satisfied are you that everything we set up for you is working the way you expected it to? I’d be happy to help with any questions you may have. I’ll be in the office tomorrow from 8:30-4:30 please feel free to call or reply by email. Thank you for you business.
Am I bothered that the first contact was an email? Not at all. Many of our customers prefer email or text contacts. As long as we are not compromising secure information and we make the electronic contact warm, friendly and personable, electronic communications can be highly effective.
From my perspective, the entire purpose of John’s call was to “push something.” It is the worst kind of selling—it wasn’t needs-based and it was coupled with a manipulative approach: “Can I ask you a favor, we are having a contest?” John’s approach is all about him and his needs, nothing about our needs. This is about a world away from needs-based selling and doesn’t do a thing for building relationships nor the bank’s reputation.
I can’t imagine that the Bank taught or suggested that John should approach onboarding or cross selling in this way. It is far more likely that John was given a goal and told “go out and make it happen.” Most employees want to be successful and they want to meet expectations, left to their own devices, they will try lots of different things. Ensure the service and sales behaviors your people use are what you want.
Bankers In the Know: Why You Need to Book an Appointment with an Auto Mechanic
Guest Article by Susan Bell, Director of Bank Success and Co-founder of Vertical IQ
Your check engine light just came on. You backed into your neighbor’s mailbox. There’s a strange squealing noise every time you start your car. Any of these scenarios ever happened to you? And your response? You, like millions of Americans each year, probably called an auto repair shop.
A financial diagnostic banks should consider:
• Many auto repair shops have been around for
years and have consistent cash flow. Think: Real estate and equipment financing; online banking; investment opportunities.
• Financing for investments in equipment, prime real estate, and training to keep up with ever-changing vehicle technology may be a pressing issue. Think: Term loans; equipment financing.
• Cash management to ensure timely payment from customers and insurance companies can present challenges. Think: Merchant services; ACH services.
Here are a few of the top banking solutions used in this industry and the percent of shops utilizing the product (based on Barlow Research Associates, Inc., data):
• Point-of-sale credit card processing: 55%
• Business debit card or business check card: 52%
• Business credit card issued in the company’s name (Visa, MasterCard, Amex, etc.): 44%
• Business savings or money market account: 41%
• Credit lines secured by receivables, inventory, property or other assets: 41%
With over 150,000 independent auto repair shops in the U.S., there is a lot of opportunity to win banking business in this industry. The typical shop operates seven bays, earning $500,000 each year and averaging over 120 repairs per month; over 17,000 have a million dollars or more in revenue.
Are the wheels turning yet?
With this knowledge in your toolbox, it may be worthwhile for you and your bank to kick the tires of the auto repair industry.
How do you meet with an auto repair shop?
1) Understand the business issues shop owners care about. This will allow you to connect with them and figure out how your bank can help them succeed. A few of the challenges that may be top-of-mind for the owner of an auto repair shop:
• High reliance on technology: Most modern automobiles are basically computers-on-wheels and require special equipment to diagnose necessary repairs.
• Declining collision sector: Once highly-profitable, the collision and auto body repair sector has declined as vehicles have become safer and accidents have decreased.
• Negative industry image: Auto mechanics constantly deal with the perception that they over-charge and unnecessarily up-sell.
• Competition from dealerships: With new car sales declining, dealers are increasing their effort to repair and service vehicles of all types.
However, auto repair shops may be winning the war versus dealerships, according to a Consumer Reports survey released in February 2015. According to the poll, independent repair shops outscored dealerships’ service departments in overall customer satisfaction, price, quality, courteousness of staff, and timeliness of repair work.
2) Ask good questions. Pertinent questions show industry understanding and keep the conversation flowing. Here are five salient questions for bankers to ask when calling on an auto repair shop:
• How do you effectively compete with local dealerships for repair work? Dealerships typically make more money from repairs than from new car sales, so they are eager to get repair business.
• What metrics do you track to manage your business? Key metrics tracked may include average repair bill, repairs per month, repairs per mechanic, and billable time per mechanic. Collision repair shops also measure cycle time – the elapsed time to complete a repair.
• Do you work with a finance company to extend terms to customers who have higher repair bills? Some repair facilities, particularly larger chains, partner with banks or finance corporations to extend credit terms to customers.
• Do you have any plans to expand to additional locations? If so, how do you plan to finance these new shops? Small, two- or three-bay shops can cost less than $50,000 to launch, while larger repair shops can reach upwards of $500,000.
• Do you participate in any direct repair programs? Auto repair shops take in customer repairs or work primarily with an insurance provider’s “Direct Repair Program” (DRP). DRP-affiliated shops receive direct referrals from an insurance company.
Of note, in a recent CNN.com investigative article, the direct repair program concept was under fire. Some insurance companies require, or at least encourage, repair shops to use less-expensive refurbished parts, some of which are in less-than-desirable condition.
Matt Parker of Parker Auto Body shop in Monroe, Louisiana, said, “The insurance company wants us to put this stuff on their cars. If we refuse to use the [refurbished] part, then they label us as a shop not willing to go along with their program, and then they try to steer our business away from us. This is refurbished junk is what it is.”
3) Know the top trends impacting the auto repair industry. Show the shop owner that you are attuned to the changes going on within the industry, such as:
• Consumers taking control: Skeptical customers are using online sites to compare prices and share reviews about mechanics.
• Battle for parts with dealers: Ten percent of computer diagnostic repairs are treated as proprietary by the car manufacturer and are only available for repair at dealerships.
• Alternative fuel vehicles: The increase in hybrid cars and alternative fuel vehicles presents both a challenge and an opportunity to the industry.
• Buying power of women: Two-thirds of auto repair shop customers are women, and 90% of female drivers are involved in the vehicle repair decision-making process.
Want to have this kind of in-depth analysis of more than 200 other industries? All of the information found in this article came directly from the Vertical IQ Industry Profile on Auto Repair Shops. You should consider taking Vertical IQ for a test drive.
About Our Guest Author: Susan Bell began her career in Marketing with a Mid-Atlantic power company, then spent the 1990s with Bank of America as Premier Banker and Branch Manager before becoming a sales leader at First Research. At Vertical IQ, Susan is responsible for managing customer relationships and developing new relationships.
Staff Article by Liz Bowermaster, Director of Training
Believe it or not the holiday season is bearing down on us quickly. If you’ve been in any big box store you will see that Halloween décor has been moved to a smaller space and the Christmas décor is spreading out everywhere. There is of course a bit of space dedicated to Chanukah.
Many organizations send holiday cards and/or client gifts during this season of the year. Sometimes there’s a committee that chooses what every client will receive. We often wonder how much these gifts mean to the clients and how much more they might mean if the gift the client receives is selected based upon what you know about that client. By the way, what do you do with non-personal gifts you receive from vendors?
I recently talked with a Trust/Wealth Advisor who shared some thoughts on how he approaches gifts. He told me that he pays close attention to the things the client likes and talks about during the moments when they are just shooting the breeze. For example he knows that one of his clients plays bridge every month with the same group of friends. They’ve been playing bridge together for over 20 years. He also knows that something this client loves is fresh flowers. Rather than send a holiday gift, this astute Advisor sends flowers to this client about four times a year. Never for a special occasion so it is always a surprise and always on the day she plays bridge. Of course she receives personalized cards for specialized occasions too.
Another of his clients is invited to join him at a football game at the client’s alma mater in the bank’s special seating area–plus dinner or brunch in conjunction with the game. His message to me was, “It’s about appreciating your clients for who they are as individuals, not turning them into a number by giving them all the same basket of cookies or other stuff. I’ve even had clients who were far more appreciative of a donation to the humane society (or other charity of their choice) than something they wouldn’t eat or another desk trinket with- heaven forbid- the bank’s name on it.”
Does it take a bit more effort? Of course, but isn’t it worth it? By the way, here’s something else to consider. How does I make you feel about yourself and your organization when you treat the clients like individuals, not numbers?
A word of caution: Your client notes and your client relationship management system can be your best friend when deciding what to do for your clients. We recently heard about an organization that holds a hunting excursion in their market for top tier clients. They reported that it is a very well-received event; however, they made the mistake of not checking their notes when sending initiations and sent an invitation to a client who is a member of PETA. Talk about shooting yourself in the foot!
Is your gift giving well-intended but missing the mark?
The Last Word
with LOYD POHL
Perspectives on Wealth Acquisition
It is definitely a good indicator of the strength of the banking economy that so many organizations are exploring acquisition opportunities. The need for fee income and the capital strength of the banks is driving the demand for wealth acquisitions. Wealth acquisitions equal Trust or RIA Acquisitions.
The speaker at our Managers’ Forum last month was Paul Lally, President of Gladstone Associates. This firm specializes in mid-market RIA mergers and acquisitions. Paul Lally’s presentation was very well-received as many of the audience have or will soon be involved in wealth acquisitions. His presentation was focused on RIA acquisitions but we agreed that 90% was applicable to Trust acquisition dynamics.
We are getting a lot of inquiries about acquisitions – some are serious, some are not. Sometimes the calls are coming from buyers, sometimes the calls are coming from sellers.
Here are some thoughts and observations: (Some of these are from or shared by Gladstone):
• If you want to be a buyer – get serious. Get resources approved. Whether it be a consultant or an investment banker – if you are serious, you need a plan and you will need some help. What is your plan?
• If you want to be a buyer – get serious. Get a commitment from the board on the parameters for your targets. This is critical. We can do simplified math exercises to test the parameters of your possible financial commitment.
Without these parameters you will waste a lot of time and find yourself in awkward situations.
• Cultural fit is a huge factor in successful mergers. You are (usually) getting people as well as the revenue. And people are “interesting.” The characteristics that made them successful may make it difficult to integrate them into your culture.
• Strategic fit is a huge factor in the value assessment by the buyer. Does the acquisition leverage existing infrastructure? Does it open or strengthen a market? Does it provide talent you lack?
• Expect regulatory scrutiny of your acquisition process. High level due diligence is, of course, part of the process to get to the finals. But then you must do account-level due diligence.
Remember the basic economic principle of the effect of supply and demand on price? My economics degree was obtained a loooong time ago – but this principle is often reinforced. There is a lot of demand for wealth acquisitions. Keep that in mind as you move into this arena. Prepare yourself for some sticker shock.
If your organization is or wants to be serious about wealth acquisitions, please give us a call!
Chief Executive Officer