A CEO of a community bank recently asked us an important question: “why should I pay my lenders any incentive to do their jobs, they already make a good salary?” We hear this question often from different management teams. We believe that part of every lender’s compensation should be variable and that incentive pay should be based on strategic priorities for that specific bank.
The most common complaint we hear from commercial bank calling officers is the lack of time available to prospect for new clients. Commercial lenders, banking, and calling officers spend less than one-third of their time selling. The majority of their time is spent on administrative work, credit and internal meetings. Furthermore, commercial calling officers get a second meeting with a prospect only 20% of the time, and a third meeting less than 10% of the time.
Like many banks, we are trying to become better at commercial relationship building and sales. One coach that we listen to is Jack Hubbard, the Chief Experience Officer at St. Meyer & Hubbard. Jack and his team are some of the best in the banking sales and performance culture business, and we wanted to highlight a recent lesson. It started with an exchange between Jack and a very successful banker. As you can see from the conversation below, there is value that banks can impart by just learning to ask the right questions.
In a previous blog (HERE), we discussed why banks should consider implementing a customer relationship management (CRM) software solution and discussed the benefits of such a solution for community banks. We highlighted the relatively low cost of CRM software and the high return that banks can get on the investment. We also asked for feedback and got an ear/email full of insight.
At CenterState Bank, we use several customer relationship management (CRM) software solutions at different parts of our bank and know we need to consolidate plus expand its use. Next, to a loan/relationship pricing model, a CRM system is one application that can make a material difference in profitability. CRM helps companies automate and manage the entire lifecycle for customer sales, marketing, acquisition, maintenance, and exit. CRM software is usually used by the customer-focused personnel to maintain contact with customers and improve service.
By the time you read this we already have an extended weather forecast from a Pennsylvania rodent. Who needs Doppler radar when you have Punxsutawney Phil? Figuring out that we will have an early spring by a random woodchuck shadow is about the same level of science employed in many banks’ sales process. Consider a common problem among bank business development officers – You present a loan or a deposit product to a customer and the pitch worked great.
Chances are your bank has a “pipeline report.” This is a report that details all the qualified prospects, their potential transactions, their value and where they are in the sales process. If your bank is on top of its sales game, it likely has this report by customer relationship so that loans, deposits and services are all on one report and can be managed. If your bank is more traditional, then it likely has multiple reports for loans, deposits and maybe, fees. If your bank doesn’t believe in relationship banking, then maybe you just have this report for loans.
