Faced with mounting pressure to hit higher goals, too often business banking executives’ first move is to hire more relationship managers to immediately boost sales production. But adding more RMs to your sales force will not boost sales growth fast enough to meet or exceed near term production goals. It takes new RMs a considerable amount of time to get acclimated to working for a new bank and the return on investment can take months to materialize.

We’ve found that frequent, high-quality coaching boosts individual RM sales production in the short and long term, yet most sales managers are too busy with their management and sales responsibilities to help RMs who need the supplemental support.

So, before you hire your next RM, why not hire a dedicated coach instead?

McKinley Bank (pseudonym) confronted this challenge head on by hiring regional coaching managers who spend over 70% of their time working closely with RMs providing one-on-one, needs-targeted, and group coaching to improve RM productivity. This role is unique in that the coaching managers are separate from and peers to the banks’ sales managers. Both sales and coaching managers work together to target RMs who needed support the most.

Board members learn how dedicated coaching improved McKinley RMs’ productivity; resulting in a 33% increase in the number of credit applications submitted.

The number of hours required to maintain a single small business banking relationship has grown by 70% since 2004.  And despite banks’ best efforts to increase sales capacity, the service-related demands of today’s small business owner mean that RMs continue to struggle to find time for sales.  Today’s RMs are working longer simply to maintain the customer relationships that they have, and that necessarily means that they have fewer hours to devote to new customer acquisition and sales.

Long-time BBB members might recall a tool that we developed called the “Relationship Tax Calculator,” designed to measure the number of hours that an RM must spend on non-revenue generating activities to maintain an existing customer relationship. These are the tasks, such as administrative work or customer service, that are mandatory but that generate little to no new revenue for your bank.

We recently revisited the Relationship Tax Calculator to understand how the number of hours demanded per customer had evolved over the years.  As we guessed, the tax had gone up for small business – but by much more than we had expected. Small business RMs now must work 14 hours per year, per customer to maintain their existing portfolio, up from about 8 hours only a few years ago.

We see two potential solutions to avoid the trap of the relationship tax and to grow new revenue:

• Assign Account Teams, Not Individuals, to Manage Portfolios: A single, generalist RM cannot manage the complexity of a large portfolio and also generate new business. Surround portfolios with a team of individuals to better distribute the administrative workload, better serve customers, and boost sales.
• Embrace Service to Sales:  The amount of RM time existing customers consume has skyrocketed. To avoid a corresponding decrease in sales, banks must find a way to transform routine service interactions into sales opportunities.

We will explore the increasing relationship tax and the implications for banks further as part of our upcoming webinar on the emerging trends and forces shaping the business banking industry this year. We invite you to join us. Please visit the BBB website to register for the webinar, and to learn more about the Relationship Tax Calculator.

Starting your role as a CFO during boom or bust economic times inevitably impacts your career.  According to a recent article in the CFO Magazine, CFOs who enter the labor market during an economic downturn tend to enjoy less success than those who begin their careers in a buoyant economy.   These recession-time CFOs tend to face more internal and external head winds that are not under their control.  Due to uncertainties in the business environment these CFOs are further held back by their conservative management styles, spending less on capital investments, and research and development.

For business banks this is a clear opportunity to show value; few other business customers have a clearer objective. New-to-seat CFOs need to show good results to their senior management teams and they need to do this quickly.  Helping these CFOs succeed in their jobs can be hugely beneficial for the overall health of the relationship and future earnings for the bank.

But, helping these CFOs won’t be easy.  Recent Board research reveals that when an RM interacts with a CFO as the primary point of contact, the expectations of the RM are very high.  CFOs want to challenge the banker on the business needs and the RM must challenge the CFO on the best way to address them.  This tension demands that the RM be equipped with great solutions and great knowledge of how they deliver value.

Learn how your RMs can succeed in these critical CFO interactions by showing value where it is most needed.

Interested members should also read how Weymer Bank focuses on helping customers reduce a key cost element —interest rate exposure—thereby convincing them of the value the bank can add beyond traditional loan and deposit products.

Small business owners are relying more and more on web/online channels to make decisions about purchasing credit and other banking products before even talking to a banker.  Banks that miss the mark online with the small business segment are quickly eliminated from the consideration set.

To gain a better understanding of how banks effectively position their small business credit products online, we conducted a comprehensive review of line of credit and term loan product offers as they appear online at 18 of the largest US banks. We found that the key differentiating factors relied on how clearly banks communicate their ability to meet customer’s financial needs in online product descriptions.

These banks were able to convey their ability to meet customer needs by:

• Providing detailed credit and term loan product information including needs addressed, key features, rates, terms and conditions, and etc.
• Strategically naming products to highlight key features and customer needs addressed.
• Highlighting unique capabilities and products developed for specific customer segments.

Board members review the full report of online credit and term loan product offerings from 18 of the US’s largest banks.

Banks around the world are facing huge political pressure to support small businesses.

But meeting the needs of small businesses is no easy task when you must also drive revenue for the bank. Small businesses have the greatest appetite for advice, but they also generate less value for banks.

So how can banks meet the twin mandates of serving businesses and growing revenue? Read More »

BBB in conjunction with CEB TowerGroup is pleased to announce the launch of our new Technology Analysis product.  Technology Analysis is a comprehensive review covering the lifecycle of an investment decision across 12 components, from the initial research phase through to the vendor selection.  Technology vendors will be assessed across 94 financial services technology categories. 

The offering includes a Technology Spending Forecast, an Anatomy of a Best-in-Class Technology vendor and discrete recommendations on Best-in-Class technology vendors based on your firms’ priorities. 

In conjunction with the launch, we are highlighting specific technologies each month and providing you an opportunity to provide feedback on your current technology vendor.  In return for your time, we will provide you with a complimentary copy of the final assessment. 

Board members, take the survey on payables automation

Today’s competitive market augurs the return of RFPs – when middle market customers solicit and select banks based solely on price, not the bank’s services or unique value proposition.

How can business banks avoid the RFP trap and set themselves apart from competitors? Read More »