Frequent BBBEdge readers might recall a past post in which we outlined the best and worst behaviors for small business and middle market RMs . The key to RM performance, it turns out, is not whether RMs consistently perform an overarching role such as the Trusted Advisor but the extent to which they exhibit very specific (and sometimes surprisingly simple) behaviors during the most critical moments.

Since then, many members have embraced these findings as a great way to prioritize coaching efforts and help struggling RMs understand what they need to differently. But when thinking about embedding these findings in the broader sales process, many members say they face an up-hill battle to define and enforce the expected behaviors for all RMs. Read More »

2011 has been a big year for business banks. Although the economic recovery has been uneven and (at times) uncertain, business banks have faced more pressure and higher goals than ever before. The trend looks set to continue for 2012. Big goals and a volatile environment will require business bank leaders to execute flawlessly to be successful.

Thus as we approach the end of the year, we want to take a moment to reflect on three of the most influential insights from the Board’s 2011 research and how business banks can use these lessons to prepare for a successful 2012.

• Don’t focus on the role of the Relationship Manager. Improve RM performance by focusing on specific behaviors during specific moments.

Business bankers have long assumed that there was one “best” role that a relationship manager should play. Board research from earlier this year proves otherwise. Data from the Board’s global survey of RMs shows that – instead of pursuing an overarching role – the best RMs emphasize specific and achievable behaviors during the most critical moments. Unfortunately, our analysis also shows that 85% of middle market RMs and 70% of small business RMs emphasize the worst behavior during at least one of the top three make-or-break moments.

In 2012, the best banks will work  to quash the behaviors that erode performance and equip RMs to exhibit the behaviors and conduct the activities that drive success. Visit the BBB site to learn more about the moments that drive performance and how small business and middle market RMs should behave during these moments.

• Remove the obstacles to sales time to generate more revenue from the messy middle segment.

In today’s competitive market, business banks must capture all revenue opportunities within their grasp – including those that sit along the divide between the decidedly small business and middle market offers. But succeeding in the “messy middle” currently requires exceptional discretionary effort on the part ofRMs. RMs focused on the messy middle must work between 4 and 7 weeks more per year to be as successful as RMs who serve smaller or larger customers. The best banks thus generate more revenue from the messy middle not by investing in new offers for customers but by reducing the administrative burden and enabling RMs to spend more time on sales.

Learn more about the messy middle segment, and see how three best practice banks have managed to return sales time to their RMs.

• Service and credit, not advice, win small business loyalty.

All factors being equal, relationship managers who ensure products and services work well and who resolve problems effectively out perform RMs who focus more on providing unique advice.

Review the standalone effect of different bank and RM attributes on customer loyalty and purchasing, and understand how you and your RMs can encourage customer loyalty in today’s competitive market.

What were your key lessons from 2011? Please share your thoughts and let us know how we can best support you and your team as we prepare for a successful 2012.

Relationship managers are increasingly offering discounts or waiving fees to win prospects and keep customers happy — an understandable response to today’s hyper-competitive market, but the trend is squeezing banks’ already-thin margins.

Most business bank leaders we talk to these days are worried about the uptick in discounting, but few have been able to prevent RMs from extending unwanted price cuts. Many fear that uniform pricing policies don’t give RMs the flexibility they need to remain credible with customers.  Others who have tried to enforce uniform pricing struggle to get RMs to adhere to the guidelines.

But there’s hope. Read More »

Long-term BBB members know that we on the research team rely heavily on member feedback to guide our research agenda. Your priorities become ours as well.

As we prepare to wind out 2011 and launch our 2012 research agenda, we want to hear from you about your top concerns and to-dos.

• What are the big tasks you and your team will face during the next few months?
• What results do you need to deliver?
• What concerns you most as you think about how your group will perform next year?

Please take a couple of minutes to complete this brief survey and let us know how we can help you have a successful 2012. Individual responses are completely confidential, and we will share a summary of the results so you can see what your peers are prioritizing.

Many members tell us that they want to make big changes and improvements to their sales model so they can compete effectively in today’s super-competitive market. The fear of change, however, makes many members reluctant to pursue big investments. Change is hard.  Even the best sales model and investments can go awry if implemented hastily. Convoluted processes, disengaged staff, and confused, dissatisfied customers are only a few of the risks.

Thus, how can business bank leaders make the changes and investments they need to win without jeopardizing existing staff and customer relationships?

A few years ago, we spoke to executives at Williams Bank (a North American bank profiled under pseudonym) about how they avoided some of the common pitfalls when implementing a new sales model. Two lessons quickly emerged:

1. Shield Customers from At-Risk RMs: Not all sales staff will respond well to change or will be able to succeed in the new model. Williams executives use regular manager check-ins to flag RMs struggling with the change and create actions plans that help these RMs exhibit new behaviors during customer interactions. The process gives RMs the opportunity to adapt to the change and also protects the customer from the negative experience of an unhappy or confused RM.
2. Continuously Evaluate and Course Correct In-the-Moment: Bank leaders can’t possibly anticipate or resolve every potential flaw before implementing a new model. Some problems will only be recognized during roll-out. The key, though, is to have an ongoing feedback loop to capture RM and customer challenges immediately and resolve them quickly. Williams creates a monthly survey and dashboard to stay ahead of emerging challenges.  

Learn more about how Williams implements a new sales model, and share your perspective on the best way to guarantee the success of big changes and investments.

We on the Board’s research team rely heavily on our members’ feedback to direct and guide our research agenda, and we poll our membership regularly to understand the top-of-mind challenges and how we can help. For example, our latest poll revealed that over 60% of members from around the world were focused on coaching and sales management effectiveness but not confident in their ability to perform well in this area. To help, we have worked hard to identify best practices on how to coach RMs and help them target high potential customers.

We invite you to again share your top priorities and provide your feedback on how the Board can support you. Today’s business bank executives face high goals and are tasked with sifting through many investment opportunities and deciding on the best investment and path to success for the upcoming year. The Board is here to help with another installment of our Survey of Business Bank Executive Priorities. Please participate, tell us how we can best support you and your team as you prepare for 2012, and see how other bank leaders are investing for the upcoming year.

While growth in credit outstandings is a shared goal across the Board membership, the path to success is not clear.  Even as we look at demand for credit, there is a good news and bad news spin. 

The Good News: One-third of business customers expect to request credit from a business bank.

The Bad News: Of the customers likely to purchase credit, over two-thirds of them are “agnostic.” That means they are equally as likely to go to a competitor as their current bank.

So, each of us can reliably assume that fewer than 10% of customers will ask “us” for a loan.  For the remaining 20% of customers seeking to borrow, it is anyone’s opportunity.  This begs the question of what drives the difference between a customer choosing your bank over another.    There are many hypotheses ranging from a better skilled salesforce to a well-managed underwriting process. 

 To help, the Board is conducting a survey to understand the hallmarks of a best-in-class credit process. Questions include: 

-          What are the standard pieces of information business banks collect as part of credit applications?

-          What is the standard turnaround time, and how often do the best banks have to override an initial credit decision? 

-          What’s the optimal way to decision credit applications?  Decentralized versus centralized? Scored versus subjective?

And many more.

Email Sara Osborne at sosborne@executiveboard.com for more information and to participate. Results will be shared during our October 27^th webinar on accelerating credit sales. And as always, your individual responses are completely confidential.

In today’s tough market, how an RM behaves and interacts with customers matters more than ever before. Our members know this and say that coaching and improving individual RM performance is a top priority. But our members also want fast results, and large-scale investments in RM advisory skills or product expertise, for example, can’t always change outcomes quickly.

To help members improve RM performance, we are hosting a thirty minute webinar September 30^th on the key factors that drive customer sales and loyalty and what you can do now to help RMs be more effective. Some of the key factors we

• Get your RMs in front of your customers and in front of your prospects. Contact matters. Customers who meet frequently with RMs are more loyal and more likely to buy. Banks that remove the obstacles preventing RMs from interacting directly with customers can compete more effectively.
• Focus on businesses that change. Some customers are simply more ready to buy than others. RMs can call repeatedly on customers who never make a purchase. Help make the most of your RMs’ scarce sales time by focusing on customers who have experienced recent change. Ask about new employees, lay-offs, new stores, or new or terminated suppliers. A business that has made a change to any of these areas is a more likely buyer.
• Who you sell to matters. Are your RMs talking to the business owner or to a CFO? Do they know who at the business makes the banking decisions? Isolating the individual buyer and making quick, simple adjustments to how RMs approach different customer groups can help them close more sales more quickly.

Register now for our September 30th webinar. We would love to have you join us.

Although many companies make significant investments in capturing supplier and customer insights, fewer than 40% of employees have sufficiently mature processes and skills to analyze “big data”. 

In its latest quarterly Executive Guidance, the Corporate Executive Board provides precise and practical guidance for enabling employees to add “big judgment” to data and to make better decisions. 

Download a complimentary copy of this groundbreaking report to learn how to take ownership of information and make information usable at your organization

We all know that a business’s sales size is not the best indicator of future revenue potential for the bank. But few business bankers have an accurate but easy way to segment customers based on furture sales opportunity. One bank we have recently profiled under the pseudonym St. Helena has developed a relatively simple way to do just this.

Executives at St. Helena were frustrated to discover that they missed sales opportunities by under-serving smaller businesses with unmet needs while overserving larger businesses with few additional needs. They decided they needed a better way to assign customers to the appropriate channel (Branch RM or Commercial RM) based on need, not simply revenue band.

Although no system perfectly predicts customer need, St. Helena landed on a simple, three part filter to gauge future revenue potential for the bank and determine the appropriate service channel:

1. Are deposit volumes low, or have deposit volumes remained stable over the last three years?
2. Is the overall credit exposure low, and is the customer a high-quality credit risk? (Be sure to measure size of credit at other banks.)
3. Does the customer have limited for-fee products?

Customers who are currently served through a commercial RM but who answer “Yes” to each of these three questions are flagged as low potential and normally moved to the branch RM, while customers currently served through the branch but who answer “No” to any one of these questions usually migrate to the commercial RM. Executives at St. Helena were surprised to find how many customers were misaligned based only on these three filters. When they migrated customers, the commercial bank experienced a 72% increase in overall profitability.

Read more about St. Helena’s work and how they ensure a successful, sustainable realignment process.