By Roxanne Emmerich
Can you go to your board and tell them how much business you’ll close in the next 30 days – with at least 90 percent certainty?
Do you have controls to make sure that every person who is calling is doing two things effectively: Calling the right people, and secondly, following a process that assures premium pricing so you never have to hear those dreaded words “we can do the deal if we match rates” again?
Most important, is your institution being paid for your unique selling propositions (USPs) – or do your lenders put you in a position of having to turn away deals, or match them every time a desperate competitor undercuts you, hurting not only the borrower, but the bank that got the business (and you, too, because you failed to get that business)?
You can have more certainty about the amount of business you’ll close, about whether your lenders are calling on the right people, and even about whether you’ll get new business at premium pricing with a predictable level of certainty.
In fact, increasing your chances in these ways is just prudent management. Your team has a fiduciary responsibility to your stakeholders to bring in predictable numbers, to prove that they’re meeting with the right people, and to have the right conversations that assure you’re getting paid a substantial premium for your USPs.
But not to worry.
If you’re not currently getting these results, you’re not alone.
The Bloodbath in Consumer Mortgages is About to Hit Commercial Loans
Eliminating the pain from your customers is imperative – and it also happens to be good for you.
In fact, what happened in the mortgage arena is about to happen on the commercial side: Borrowers are getting the best rate, but they’re about to be left dressed up for the prom with no date – while fickle lenders (who are stealing the business now) will decide they don’t really want to go to the prom, after all.
We’ve been there before and we’ll be there again.
It’s now come down to an ethical obligation – not just a sound business strategy – to get more effective at saving these borrowers. If your team doesn’t know how to handle the bottom-feeding pricers, many of these businesses will be left stranded when they need credit the most. They’ll instead receive a notice that reads, “Pay up in 30 days because we no longer have an appetite for your kind of loan.”
What’s the most critical factor in ensuring that your bank (and your community) isn’t crippled when this train wreck of overly ambitious “new to the market” lenders turn on good business credits, stranding them when they need help the most? Getting an iron-clad system established now to make sure your team knows exactly who to call, how to start conversations that never lapse into price wars, how to use your list of unique selling propositions that justify a higher price and – most importantly – a system that compels the prospect to reveal how much your unique selling propositions will bring to their bottom line.
When a prospect tells YOU why the hundreds of thousands of dollars they’ll make or save are worth the measly $20,000 additional you’re charging … well, that’s how a real sales system is supposed to work.
Believing in the System
So why don’t most banks simply add a sales system like this?
First, one has to suspend disbelief. At a recent course where we taught this profit-rich sales process, those who didn’t believe it was possible were mixed in with those who are already doing it – and getting 50 to 200 basis points more.
At that point, well, it’s rather difficult to say it can’t be done, now isn’t it?
Secondly, the system hinges on asking questions to help the prospect understand there is a cost of staying with their incumbent bank. One consultative question in a system like this is, “When your personal banker comes in to do a 15-point checklist that includes whether your people are implementing all PCI compliance practices to avoid the $500,000 fine per incident – plus some 14 others that have those kind of cost savings – what have been some of the biggest cost savings from those meetings?”
“Meetings?” the prospect will probably exclaim. “PCI compliance? Our banker doesn’t have a checklist – or even come to visit us.”
At that point, your lenders can simply say, “My fault, I must not be making myself clear. I’m talking about, you know, those semi-annual meetings where they sit down to review not just PCI compliance, but systems you have in place to protect you from employee embezzlement and save you the hundreds of thousands that are commonly lost by small businesses. THAT meeting.”
Of course, that’s just one question your lenders could be asking a prospect in a pre-planned sales system like this. Truth is, they need a dozen really great questions like this that all speak to hundreds of thousands of dollars of additional revenue or decreased expenses to the prospect to help justify your premium pricing.
Saying that your lenders have all been in banking for over a decade doesn’t mean one cent to a prospect. Asking these kinds of questions, on the other hand, is priceless.
Looked at this way, getting a premium of 50 to 200 basis points should be expected from a sales system like this – but you’re going to have to work at building it to convince your people that sales is a system (and that the system is wildly successful when followed in its entirety with no missing steps).
So, are you ready to get premium pricing while you’re financing the lowest-risk, highest-quality credits? It’s no longer a pipe dream – it’s a system. Will 2013 be the year that your net interest margin skyrockets regardless of what happens with rates? It can … by stopping the excuses and replacing them with a predictable and proven system that ensures success.■
Roxanne Emmerich is CEO of The Emmerich Group.