In the past, most business banks grew by increasing costs. More visits and more staff were added to generate more new customers.

That approach is no longer viable. Today’s business banks are expected to acquire more customers than ever before, but they are not necessarily allocated more budget to do so.

So how can business bank leaders balance the need to grow the number of customers with the mandate to keep costs low? Read More »

RMs have always been pressed for time, and today’s focus on credit quality and the heavy burden of new regulations further reduce RMs’ capacity to call on prospects. Unfortunately, this means that RMs are so busy that they neglect to make time for prospecting.  Oxley Bank (a pseudonym) faced a similar challenge a few years ago, when tasked with a very aggressive growth mandate, found that only 10% of their RMs met their individual calling targets.

The Challenge: Oxley wanted to improve customer acquisition efforts by managing sales activities centrally, but they realized they needed to balance a centrally-driven strategy with the individual market characteristics and differences in individual portfolio size and complexity.

The Solution: Instead of setting the minimum number of calls an RM must make, Oxley works backwards and determines the maximum number of calls an RM could make each year. From there, they require RMs to estimate the number of calls they must make to their existing customers and the number required to convert prospects. Sales managers and regional sales leads pressure test RM estimates, as Oxley soon found that RMs overestimate the number of calls they need to make to existing customers and underestimate the number of calls required to win a prospect. Afterward, a rigorous call prioritization process ensures that RMs focus calls on the highest potential customers and prospects and allows bank executives to monitor the revenue outcomes of each call made.

The Results: Before the call allocation program, Oxley grew below the local market rate, and only a handful of RMs achieved their call goals. Five years after the program first began, over 60% of RMs reach or exceed call targets and Oxley Bank now grows loans and deposits faster than the market average.

 Board members,  read a step-by-step walkthrough of Oxley’s practice on our website.

In the struggle to capture credit demand and manage risk, banks are finding that their RMs lack the expertise and time to efficiently manage credit responsibilities while also driving new sales and acquisition, and centralized credit teams lack the understanding of local geographic markets to make optimal credit decisions based on firsthand knowledge of customers. One leading bank overcame this challenge by creating a specialized credit underwriting and decision role in local credit markets to support and complement the RM sales function. Read More »

Regular BBB Edge readers will recall our recent posts on the “messy middle” where we have discussed how business banks can capture more revenue from the customers on the threshold between the conventional small business and middle market lines of business. Most business banks understandably tackle the challenge from the perspective of the customer, asking “what do these customers need, want, or present that’s different from our small business and middle market customers.” But our recent findings suggest that business bank executives should focus on the needs of the RM – not the customer – to win in the messy middle. Read More »

As banks invest in acquiring customers, many worry about the large number of newly acquired customers that will attrite or fail to develop into profitable relationships.  A bank we profiled under the pseudonym Spencer addresses this problem by assigning each new account to a special RM tasked with shepherding the customer through the critical first 120 days of the relationship. Read More »

In next week’s webinar on Benchmarking RM Productivity and Engagement, one of the findings we look forward to discussing is how RMs serving Small Business (SB) customers disagree with their Middle Market (MM) peers over the importance of credit availability as a driver for acquiring new customers. According to BBB’s latest research, a bank’s brand and reputation is the number one driver for new customers in both lines of business. However, MM RMs pick their ability to provide reliable access to credit as the second biggest driver of new customers where as their SB peers pick product and service variety in its place.  Read More »

RMs have always been pressed for time, and today’s focus on credit quality and the heavy burden of new regulations further reduce RMs’ capacity to call on prospects. Faced with ambitious growth goals and fierce competition for customers, leading banks know that they must preserve RMs’ ability to prospect, and that they must cultivate and sustain a focus on new sales and acquisition. Oxley Bank (a pseudonym) faced a similar challenge a few years ago, when tasked with a very aggressive growth mandate, found that only 10% of their RMs met their individual calling targets. Read More »

Early findings from the Board’s 2010 RM Survey reveal that just over 60% of all sales visits made by RMs today are to another bank’s customers.   Consider how the world has changed. Five years ago, an average of 40% of an RM’s visits were to prospects.

It is no wonder that most of my recent conversations with member executives have focused on the “out of control” nature of the loan business.  “The only way we are going to grow is by taking names away from our competitors,” is how one executive describes it.

Conventional wisdom says that poaching can be difficult and inefficient; cross sales are normally the easier and more effective way to grow. In fact, Board research tells us that very few RMs generate value for each hour they spend prospecting. But the reality of today’s low-growth environment makes poaching  a necessary evil, and so RMs are dedicating 50 percent more time to the activity than they did five years ago. Read More »