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Managing the Sales Process: Focus Is the Key
Managing the Sales Process: Focus Is the Key
By Buck Bierly

When a bank is going to be more selective in the kind of business it does and with whom it does business, then the bank’s calling program will have to be equally selective — it will have to focus on the right kind of business and the right businesses.

To understand how a focused calling effort might benefit a community or regional bank, let’s use an example — the fictitious Progressive Bank. In the last three years, Progressive Bank has shifted its business objectives away from growth and toward profitability. And, as the bank has gotten leaner, its quest for profitability began to move from expense reduction to maximizing the profitability of relationships.

So recently, Progressive, with a sharpfocus on its business objectives, identified a series of objectives for its sales and calling effort to maximize the profitability of both current and new commercial relationships. As a result, the overall emphasis of its calling effort would have to shift. Starting now the calling effort would have three primary objectives (for clarity, their “thinking” follows each of the objectives):

• Retain key customers. “We can’t afford to lose top 20 percent relationships. Since inattention is the most frequent reason commercial customers change banks, there needs to be consistent face-to-face contact with all key customers.”
• Keep a customer as long as possible. “In most cases, the longer the relationship lasts, the greater the probability we can improve the ROA of the relationship. And that level of customer satisfaction will require soliciting feedback from the customer on a regular basis.”
• Be the customer’s only bank. “Our profits will grow as we handle both deposits and borrowing and add additional fee products such as trust services.”
Taking the Lead

Progressive Bank’s senior management realized that this shift in focus would require a change in the way the calling officers manage their relationships. To be successful the calling officers would need to take the lead in their commercial relationships, becoming more pro-active in their relationship management and more strategic in their thinking. Therefore, the bank would need to bring a sharp focus to the calling effort by establishing a clear direction and some specific guidelines for the calling officers. They decided to employ the following elements as steps in making this transition:

• Identify Key Relationships and Prospects. The first step is to identify the top 20 percent customers in our portfolio. Since we don’t have the capability of ranking our customers based on ROA or net contribution, we’ll use loan size, deposit size or any other criteria that aligns with our business objectives. This ranking can also be used to identify high-potential customers within our portfolio and key prospects in our market. The selected businesses will become the primary focus of our calling officers;

• Focus only on Key Relationships and Prospects. The calling officers will need to focus a large portion of their time and energy on the targeted relationships to ensure that (1) the best relationships get the attention they deserve, (2) the high potential relationships get the nurturing they need to develop into a key relationship, and (3) the key prospects are the focus of all prospecting activity;

• Improve Relationship Planning. Pro-active relationship management will require an objective and a strategy for a relationship — a formal relationship plan. The relationship plan needs to be reviewed and approved by the calling officer’s manager;

• Calls Need to be Carefully Planned. Each call on a key relationship or key prospect should advance the plan for that relationship. That doesn’t mean that every call should generate a sale. Rather, it means that every call should move the calling officer one step closer to a sale or to the next stage of the relationship strategy. Consequently, each call will need to be planned — there will need to be an objective for the call and a strategy for attaining the call objective;

• A High Level of Calling Activity. This approach to improving profitability requires more calling — not less. Calling officers will need to maintain a high level of calling activity in order to implement the key relationship strategies and, in addition, to handle normal-course-of-business calls;

• Consistent Improvement in Call Quality. Proactive relationship management will require calling officers to be able to think strategically and to sell effectively. This level of strategic selling is more difficult than the type of transaction selling and order taking that is often a part of traditional account management. The calling officers will need to continually develop their strategic selling skills;

• Sales Management. To ensure that the relationship management effort is consistent and persistent over the length of time required for success, the effort must be ‘actively’ managed by the calling program manager. Proactive relationship management is not easy; it will require the calling officers to take the lead in customer relationships and it will necessitate that they plan, guide and direct those relationships in an organized and systematic manner. This is new for many calling officers and, since developing new skills can be uncomfortable, the process of implementing proactive relationship management will need to be carefully implemented and continually reinforced.
The Assumptions of a Focused Calling Program
These are the types of things that the best banks are doing to ensure the success of their business development efforts. And this focus is based, both explicitly and implicitly, on a series of assumptions; assumptions that underlay all effective sales efforts in mature industries.

The first assumption is that there are “good” businesses in the market. A good business could be loosely defined as one that (1) meets the bank’s standards for credit quality, (2) will generate a reasonable profit for the bank and (3) wants to build a long-term relationship with a bank. The assumption implies that there are businesses that meet these criteria, even though it may seem that every business that is credit-worthy is only interested in shopping around and making decisions based on price alone.

The second assumption is that all the good customers are taken. All the “good” customers already have a banking relationship and are generally satisfied with their current bank. Why are they satisfied? Because they’re “good” customers, their current bank knows it and therefore is generally attentive, responsive, etc. And, in most cases, good customers aren’t out looking for a new bank; they will have to be pursued — persistently. Who are the businesses that are out looking for a bank? The ones that don’t meet today’s credit standards; the ones that are always looking to save a few basis points (the shoppers); or the ones that are more interested in transactions than relationships.
The third assumption is that not all customers and not all prospective customers are of equal value. The Pareto principle applied to a commercial bank would suggest that 20 percent of a bank’s customers are generating 80 percent of its revenues. In our experience, the reality is that 10 percent of the customers are typically responsible for 90 percent or more of the revenues. It is clear that a banker’s calling time must be spent where it will generate the greatest return — focusing on key clients and top prospects.

The fourth assumption states that not all customers are ready to buy additional products at a given moment in time. As a business moves through the stages of its life cycle, its needs change. Discussing employee benefits with an early stage-two business is not a good use of anyone’s time. However, as the business grows, the time may be right to begin “planting the seed” for that same service.

The fifth assumption states that the owner of a good business will not leave his current bank based on a single sales call. A number of surveys have concluded that it takes six to 12 face-to-face contacts with a business owner before he will seriously consider a new bank. And this makes sense from two perspectives: First, if a business is considered a good client by its current bank, it is probably getting a reasonable level of service and attention; second, few business owners will give up a “known” relationship for an “unknown” relationship. Building a relationship between the calling officer and the business owner must take place before the owner would ever take the “risk” of giving up the known for the unknown and changing banking relationships. In addition, building that relationship will take multiple calls over a one-year or two-year period. (Unfortunately, both surveys and anecdotal evidence suggest that the average calling officer “gives up” after three calls, one solid rebuff, or one lost deal.)
A Plan for Action
This determines a plan of action: identify the businesses you want to do business with and then focus on them with an unrelenting consistency and persistence. For key prospects, the strategy would be straightforward; keep your name in front of the business owner until he has a need — you want to look at the next piece of business he has.

Over time, a business owner will cycle through periods of increasing and decreasing satisfaction with his or her current bank. For example, if you were to contact a prospective customer when he was very satisfied with his current bank, you would be rebuffed. On the other hand, if you were to contact the same prospect when he was very dissatisfied, the business owner would invite you to stop by.

Given this cyclicality, common sense would tell you that contacting a prospective customer six, eight, or 10 times in a one-year period would greatly increase the odds of making a contact during a period of dissatisfaction. Therefore, this approach is based on “timing” and it will require three things to be successful:

• Consistency. By contacting prospects repeatedly, you keep your name in front of the prospect. We recommend six or more contacts a year, using a combination of face-to-face, mail, and phone;

 • Persistence. Despite rebuffs, the calling officer will need to make multiple contacts with the prospect to keep his name in front of the prospect. This usually requires the identification of gaps early in the contact sequence;

 • Multiple contacts. In order to be there at the “right” time, the calling officer would need to maintain contact activity for two or more years;

The approach with key customers and prospects is focused on educating the business owner. This strategy helps the business owner to see the relationship between his business objectives and his financing alternatives with greater clarity. Moreover, this increased clarity may result in a widening of the gap between the business owner’s expectations and his current situation and permit him to see new ways of meeting his business objectives and the role that cash management, employee benefit plans, a trust relationship etc. might play in meeting these objectives.

If this kind of discussion were to take place, multiple times the business owner would begin to see his gaps more clearly. When he perceived the gap to be large enough, he would feel compelled to take the necessary action to close it.
Consistency, Consistency, Consistency

Consistency is the very essence of focused business development. Nevertheless, the level of consistency discussed here is difficult to maintain for many calling officers. Why? The primary difficulty is time. Most calling officers have other responsibilities; the press of operational and administrative duties makes it difficult for them to be consistent enough to be successful.

To complicate the problem further, there are other issues as well:

• In the past, business came to us. This “reactive” situation resulted in limited development of the planning or strategy development skills required in proactive business development. A calling officer has two problems: (1) staying in front of a client or prospective client until they have a need; and (2) winning the business when the business owner provides the opportunity;

 • Developing new business is difficult, frustrating and often uncomfortable work for many calling officers. It’s hard to be unrelentingly consistent when you feel discomfort or frustration;

• There is little immediate reward for the efforts expended in proactive business development. The reward, booking the business, may be months or years away. How does the calling officer keep “motivated” during the ups and downs of the business development process?

 • Many calling officers, when formally interviewed, indicate that they don’t have a clear sense of who the bank wants them to call on and for what reason, so they’re not sure exactly which direction to go and how to proceed. They often spend time second-guessing their manager and themselves— and that adds to the inconsistency;

• Many banks have a management focus on meeting goals for this quarter and this year, not next year or the year after — yet bringing in high-quality new businesses can take 12 or more months. It’s difficult for many calling officers to balance a long-term process with a need for short-term results;

• Calling officers are paid (or incented) for putting business on the books this quarter or this year — not for thinking about next year’s pipeline;

It’s easy to see why shotgun approaches to business development are easier for both a bank and its calling officers. Blitzes, promotional campaigns, telemarketing, direct mail, etc. can be done occasionally when “I have the time — when things slow down a bit,” or when someone else does it (marketing, for example). Although these approaches create a flurry of short-term activity where everyone is busy, they seldom get calling officers face-to-face with the right customers and prospects often enough to generate a significant increase in high-quality new business.
Actively Managing the Calling Effort

A focused approach to new client development requires a more active approach to sales management. This more active approach, if properly implemented, creates an environment where there are:

• Extrinsic motivators for the calling officers. Challenging sales goals, monetary compensation and a high degree of visibility for all calling activities and sales results are all a part of this process.

• Support structures in place. Ongoing guidance for each calling officer, high-quality coaching, ongoing feedback, accountability for achieving sales results, recognition and peer influence form the foundation of active sales management.

Many banks already have taken the first steps in sales management. They have established sales goals and call goals, defined territories, and built some form of a prospect list. These are necessary steps, but they often result in passive sales management - where the calling officers are responsible for providing their own direction and guidance, and consequently, their business development efforts are only as good as their individual experience.

If a bank wants to focus its efforts on businesses that will meet its asset quality, profitability and relationship criteria, then a higher degree of focus is required. In business development, increasing degrees of focus require increasing degrees of structure. Active sales management provides the necessary structure and it generates consistent sales results.

In the end, consistency is the primary determinant of success in business development. But it doesn’t just happen. It has to be managed. And when it’s properly managed, it generates the right kind of business over and over again.

Buck Bierly has worked with community and regional banks for over 20 years and is the president of MZ BIERLY CONSULTING, Inc., a firm that specializes in sales force management. He is a faculty member at various banking schools and a frequent speaker at banking industry conferences. He can be reached at (610) 296-4771 or by e-mail at

Posted on Wednesday, March 31, 2004 (Archive on Tuesday, June 29, 2004)
Posted by kdroney  Contributed by kdroney


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