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How to Market to Small Businesses
How to Market to Small Businesses
By Robert S. Hanna
The banking industry has changed significantly since I began my banking career in the early 1980s. Today’s customers are more sophisticated – or at least they perceive themselves as being more sophisticated. It’s easier for customers to solve their own financial problems using the technological solutions available to them. There’s greater competition because there seems to be a bank on every corner and they all seem to be targeting the same businesses. Finally, the emergence of multifaceted national financial service providers such as insurance companies and brokerage firms provides customers with other means to meet their financial needs. 
All of these changes have created a more competitive industry and made it more challenging for business development professionals to succeed. Market research continues to show that bankers are generally liked and trusted by the business community. They’re viewed as “one of the good guys,” in that business owners rate them very high in the areas of trust and competence.

The bad news is that business owners (and yes this includes your customers) don’t rank them very high on “understanding” their business objectives. They also don’t see their own bank’s services or capabilities as any better or worse than other banks. Therefore, many business owners perceive their bank as “replaceable.”

In order to change this perception and improve the efforts of business development professionals, it’s essential that banks invest more time and money into their salespeople. In today’s competitive market it’s essential that salespeople see things through the eyes of their customers and do things that create value.  

Sales managers play a critical role in helping business development officers attain this perspective and develop their skills. First they need to hire salespeople that possess excellent communication skills. Second, they need to build an infrastructure that supports learning and development. Finally, they need to communicate their expectations so business development officers understand their role in gaining and retaining customers.

In today’s competitive market, sales managers can no longer afford to simply focus on results. They need to take an active role in developing their staff. This requires a new commitment and focus on their part. It also requires organizations to re-examine their hiring practices and the skills required to be a sales manager.

Many banks still resist allocating the necessary resources to build a strong sales culture. This type of behavior or strategy is counterproductive in today’s competitive market, in which every bank needs a strong sales presence. Banks that continue to oppose this philosophy will find it extremely difficult to compete.

Management reinforcement is critical in developing a strong sales culture. Consistent coaching around sales behaviors and results are the two most important practices that ensure long-term sales success. For sales managers to coach effectively, they need to understand the business development process and the skills that enhance sales performance.
Authors and educators frequently use the image of a funnel to explain the business development process. Above the funnel are companies that have never been called on, or “suspects.” In the funnel are “prospects,” or suspects that you’ve called on and qualified. At the end of the funnel are the actual companies with whom you will close business and build relationships.

Without coaching, many business development officers struggle with how to prioritize their calling time. Many calling officers do not appreciate the importance of sourcing new suspects and the effect it has on their success. Keeping the funnel full is the only activity that guarantees future success and the attainment of sales goals. Other than attending to their closing activities, it’s the most important activity that a calling officer can perform.

Sales managers can help their staff prioritize their calling activities by reinforcing the importance of a full funnel or pipeline. They can easily reinforce this concept by regularly discussing it at sales meetings and through field coaching, which are excellent reinforcement vehicles. They also help their staff operate efficiently within their markets when they remind them that community business is built on relationships, and that it’s imperative that they use their relationships to leverage their calling time.

Empirical data continues to show that it’s faster (and easier) to generate new business from an existing customer or from a prospect that was referred to you, than by cold calling. There are some exceptions to this business philosophy, such as opening a new market, but normally business development officers are more successful when they develop business through their networks. The information below clarifies this concept:

• Existing customers – shortest timeframe.
• Referrals – next shortest timeframe.
• Cold calling (no referral) – longest timeframe.

Since networking and asking for referrals are key skills, successful sales managers establish “best practices” for these skills so that cold calling is minimized. They also encourage their staff to build strong relationships with their most profitable customers, which improves customer retention and provides salespeople with a great referral source. To improve the effectiveness of business development officers, it’s important that managers regularly reinforce these concepts and hold their staff accountable for referrals.

Sales managers also play a critical role in helping salespeople be more successful in their target marketing efforts. For example, sales managers can help their salespeople identify customers who currently have a small relationship with the bank but have the potential to be a very profitable customer. They can reinforce the importance of calling on these customers periodically so that over time they can win more of their business. Keys to winning more business are understanding the bank’s capabilities, appreciating your own capabilities, and understanding how to use these capabilities to communicate value.
Field coaching is a proven method for teaching and reinforcing selling skills and strategies. In order for salespeople to improve their performance, it’s imperative that they be taught the skills and behaviors that lead to sales success, be given an opportunity to practice the skills, and receive regular feedback on how well they perform the skills.

Field coaching provides managers with an opportunity to observe their staff in selling situations and give them timely feedback on how well they performed. Research data suggests that average performers benefit the most from this type of experience. In order for managers to coach effectively, they need to know what skills or behaviors help salespeople sell effectively, observe their staff in selling situations so that they can accurately assess how well they performed the skills, and help their staff improve their skills by giving them feedback on their performance. 

A critical element of field coaching is feedback, which requires managers to involve their staff in pre-call and post-call planning. 

Pre-call planning is an opportunity for managers to reinforce the importance of preparation and the selling skills that lead to success. It’s also a developmental tool that provides managers with an opportunity to discuss the selling behaviors that need strengthening, and provides a basis for feedback after the call. By discussing the behaviors/skills needing special attention prior to the call, staff members can overcome past weaknesses, and perform more successfully.     

Feedback on how well the business development officer executed the plan is normally discussed during the post-call planning session. During this session it’s important that managers create a comfortable learning environment, which will encourage open communication and make it easier to exchange ideas. The easiest way to accomplish this is to ask questions and let the business development officer talk about his/her perception of the call, with special emphasis on strengths and weaknesses. 

In reviewing the salesperson’s performance it’s imperative that managers remember not to overload the person with too many learning points. This is one of the main reasons why it’s important that managers identify a priority skill/behavior, so that in reviewing the person’s performance they can give focused feedback on how well he/she performed that skill. 

Banking is a mature and very competitive industry. For business development officers to succeed, it’s critical that sales managers invest more time and money into their staff’s development. Rather than focusing only on results, they need to help their staff develop the right skills, behaviors and strategies so that they can differentiate themselves in the marketplace.

To accomplish this, it’s important for sales managers to change their role. They need to be a strong and innovative facilitator when conducting sales meetings, and a committed field coach when making joint calls. Field experiences are important because they help them understand the challenges facing today’s business development officers. It also encourages them to take an active role in their staff’s development and be perceived more as a “coach” than an autocratic manager who’s only interested in results.      

Robert S. Hanna is president of RH Consulting, a full-service sales/service improvement company dedicated to helping banks increase deposits and improve loan growth. Prior to starting his company, Hanna was a vice president with a large money center bank and directed their sales/service development efforts. He can be reached via e-mail at

Posted on Friday, December 31, 2004 (Archive on Thursday, March 31, 2005)
Posted by kdroney  Contributed by kdroney


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