Building End-To-End Relationships
A Focus on Sustainable Performance
Building Sustainable
Revenue Growth
in a Challenging Environment
April 2015
Building End-To-End Relationships
Tepid loan demand
Shrinking net interest margins
Fewer business owners looking to change banks
More and more banks competing
A difficult environment. . . but some Banking Executives
view revenue growth as attainable in 2015 and 2016
A Challenging Environment
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Building End-To-End Relationships
1. A Sharp Focus on market segmentation (Know your Market. . . the
“Right” Clients, Prospects and COIs)
2. Building a “Business Acumen” approach to the market
(differentiating your brand. . . moving “beyond” Product Acumen)
3. A Stronger Focus on New Client Acquisition (for Loan Growth)
4. Building Wallet Share with single and double-service Clients
(expanding High-Potential relationships)
5. A Strong Focus on fee-based services (Moving “lenders” to
Bankers. . . changing the conversation)
Why?. . . A Strong Commitment to Revenue Growth
3
Building End-To-End Relationships
Let’s Go a Little Deeper. . .
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Building End-To-End Relationships
In today’s banking environment customer service isn’t
enough to expand or acquire relationships.
Either you’re the low-price/low-structure provider. . .
Or, you differentiate your brand based on Business
Competence (Business Acumen)
Building a “Business Acumen” Approach
5
Building End-To-End Relationships
The “sea isn’t rising” in this cycle. There are too many
banks competing for too little business. So the question
becomes. . .
1. Are you any different than your competitors?
2. Is that difference compelling enough to overcome the
Business Owner’s inertia when it comes to making a
change?
The World Has Changed
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Building End-To-End Relationships
THE MARKET IS
DIFFERENT TODAY
Building “Sustainable” Revenue Growth
7
Building End-To-End Relationships
1. Strategic issues are on the minds of Business Decision Makers.
a. Building “efficiency” has been a major focus for Business Decision
Makers during the recession and post-recession periods.
b. In 2014 and continuing into 2015, more than 30% of small and mid-sized
firms have considered adding to staff, CAPEX investment, a merger,
an acquisition, or sale of the business in the next 12 to 36 months;
they are thinking 1 to 3 years ahead.
c. However, few RMs are initiating conversations with Key Decision
Makers early enough to identify and develop these opportunities. They
are busy focusing on this year’s “product” goals, not the 12 to 36 month
“view” of the Business Owner.
The Market is Different. . .
8Greenwich Associates, 2014
Building End-To-End Relationships
2. Advice remains a critical “need” for many Decision Makers. . . providing
an opportunity for Bankers to win, expand and retain relationships by
building “business partnerships”.
a. Only 50% of Banks are providing “advice” [added-value] and that
“advice” is typically a “thinly veiled product sell”. (These Bankers are
demonstrating Product Acumen, not Business Acumen)
b. 50% of Decision Makers state that their Banker hasn’t “brought them
an unsolicited idea in a decade”. (These Bankers are demonstrating a
lack of Business Acumen)
3. About 16% of firms are actively seeking a new Treasury provider.
a. Decision Makers are looking for demonstrated value.
The Market is Different. . .
9Greenwich Associates, 2014
[The Comments in Blue are Mine!]
Building End-To-End Relationships
The Banks that are paying attention are going back to the
fundamentals. . . requiring increased discipline on resources and
segmentation to drive sustainable performance.
1. Reminding Team Members that 85-90% of the profits in the business
segment are driven by 10% of the business relationships.
2. Focusing on “High Value” and “High Potential” businesses and requiring that
they receive “high touch and distinctive value-added”.
3. Reminding Team Members that “Low Value” business customers require
good service that instills loyalty. . . but does not “over serve”.
And the Banks?
Are they Adjusting to the Market Changes?
10Greenwich Associates, 2014
Building End-To-End Relationships
Remember this data from a few minutes ago. . .
Advice remains a critical need for many Decision Makers. . . providing an
opportunity for Bankers to win, expand and retain relationships by building
“business partnerships”.
1. Only 50% of Banks are providing “advice” [added-value] and that “advice”
is typically a “thinly veiled product sell”. (In other words, these banks
are providing Product Acumen, not Business Acumen)
2. 50% of Business Decision Makers state that their Banker or Bank haven’t
“brought them an unsolicited idea in a decade”. (They may be providing
Product Acumen but are not providing Business Acumen)
Maybe Everybody is a Price Shopper Now. . .
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[The Comments in Blue are Mine!]
Building End-To-End Relationships
Resources Most Often Relied on for Advice on Addressing Business Issues
Resource<$10,000,000
in Sales
>$10,000,000
in Sales
Internal Management Team 66% 63%
Peer at Another Company 20% 23%
Outside Consultant 17% 22%
Insurance Broker 11% 13%
Accountant 16% 11%
Business or Commercial Banker 10% 4%
Lawyer 3% 3%
Investment Banker 2% 1%
Other 9% 6%
So Where Does that Leave Us? Resources, Business
“Advice” and “Business Acumen”
12
Building End-To-End Relationships
13Beverage Distributor
Business Issues, Opportunities and Challenges. . .
Building Relationships Based on Business Acumen
Building End-To-End Relationships
Business Acumen and Product Acumen
are Not the Same
14
Business Acumen
Product Acumen (and the “RFP”)
Building End-To-End Relationships
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[3.] Bring “Unsolicited Ideas” to the table; Ideas to Optimize Financial
Management Processes that are changing now or the next 3 years!
[1.] Understand the Business Issues, the Opportunities, and the
Challenges that are changing the Business Operations now or
in the next 3 years.
[2.] Understand the Financial Management Processes that are changing now
or may change in the next 3 years.
Changing Business Issues drive a change
in Financial Needs. . . align with What is Changing
Building End-To-End Relationships
Resources Most Often Relied on for Advice on Addressing Business Issues
ResourceBusiness
Banking
Commercial
Banking
Internal Management Team 66% 63%
Peer at Another Company 20% 23%
Outside Consultant 17% 22%
My Insurance Broker 11% 13%
Accountant 16% 11%
Business/Commercial Banker 10% 4%
Lawyer 3% 3%
Investment Banker 2% 1%
Other 9% 6%
Business Acumen. . . Changing the Conversation
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Many Business Decision Makers will allow you to choose
the Conversation you will have with them
Building End-To-End Relationships
Not all Business Owners want the same level of relationship with a Banker;
Not all Bankers can respond to each level of relationship.
Decision Maker’s Relationship “Value Drivers” Vary(So It’s Not Just RM Skills, it Depends on the Business Owner too)
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Building End-To-End Relationships
Not all Business Owners want the same level of relationship with a Banker;
Not all Bankers can respond to each level of relationship.
Business Owner’s Relationship “Value Drivers” Vary(So It’s Not Just RM Skills, it Depends on the Business Owner too)
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Business Acumen
Product Acumen (and the RFP)
Building End-To-End Relationships
Focus on what’s changing in the Decision Maker’s Business and
Personal life.
1. Helping a Business Owner manage changes has a higher sense
of urgency than comparing products.
2. Aligning with what is urgent to the Business Owner has a higher
impact on his Inertia. . . and ultimately his Loyalty.
This is the differentiator. . . Business Acumen.
The mantra in this environment. . . Sell to what’s changing!
A Theme. . . for a Challenging Environment
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Building End-To-End Relationships
For a significant number of Business Owners Business Acumen is
more important than Product Acumen. . . and for that group Business
Acumen is the highest level of Customer Service.
Business Acumen* is bringing Business Issue Insights and Unsolicited
Ideas to the table. It is a significant “differentiator” in a competitive
marketplace and is highly effective in proactive situations.
Product Acumen and traditional Customer Service are important in
reactive situations. It is less of a differentiator in proactive situations.
*Business Acumen is Conversational Competence in Business Issues; it is not the same
as a “Business Expert or Industry Expert”. Business Acumen, as we are discussing it,
is Conversational Competence around the “Industry Sector Changes and potential
Business Challenges affecting businesses within that industry”.
The Re-Definition of Customer Service
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Building End-To-End Relationships
SHARPEN THE FOCUS,
CHANGE THE CONVERSATION
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Building End-To-End Relationships
Business Owner
DDA DDA
MMA MMA
Web-Based Banking/Cash Management Web-Based Banking
Line of Credit Investments
Equipment Loan/Lease Retirement Planning/Retirement Plan
Commercial Mortgage Jumbo Mortgage
401(k) Home Equity Lines or Loans
Liability Insurance Life Insurance
Key Man Insurance, Buy/Sell Agreement
Total: 9 Total: 8
Revenue Increases from End-to-End Relationships
22
Business Services: 15-years, $2,500,000 in sales
Think 65% of the
“Relationship”
Building End-To-End Relationships
Business Partners(s)
DDA/Cash Management DDA
MMA MMA
Line of Credit, Acquisition Financing Web-Based Banking
Equipment Loan/Lease Private Banking
Commercial Mortgage Investment Management
Payroll Retirement Planning/Retirement Plan
Merchant Account Jumbo Mortgage
401(k) Home Equity Lines or Loans
Liability Insurance Life Insurance
Key Man Insurance, Buy/Sell Agreement
Total: 10 Total: 9
Revenue Increases from End-to-End Relationships
23
Professional Practice: 18-years, $6,500,000 in sales
Think 65% of the
“Relationship”
Building End-To-End Relationships
Revenue Increases from End-to-End Relationships
24
Distributor: 28-years, $28,500,000 in sales
Company Decision Makers, Key Employees
Treasury Management Private Banking
Working Capital, Acquisition Financing Investments
Equipment Loans/Leases Jumbo Mortgage
Commercial Mortgage Home Equity Lines or Loans
Swaps, Derivatives Life Insurance
Investments Retirement Planning/Retirement Plan
401(k) Estate Planning
Liability Insurance
Key Man Insurance, Buy/Sell Agreement
Employee Banking
Total: 10 Total: 7
Think 65% of the
“Relationship”
Building End-To-End Relationships
The Road Map for Sharpening the Focus
Three Focal Points. . .
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Building End-To-End Relationships
Think it Through!
1. What’s changing in the industry sector in which the Business operates?
Now think it through. . .
2. Will that create Business Issues, Opportunities and Challenges for the business
in the next 12, 24, 36 months? What might those Issues, Opportunities and
Challenges look like?
3. How might those changes affect change in his Business Operations?
4. How will changing the Business Operations change the underlying Financial
Management Processes of the Business?
5. Looking at the current Financial Management Processes (not the products). Which
of those processes may not be optimal for what may change in the next 12, 24 and
36 months.
6. Build a conversation with the Decision Maker around steps 1 through 5!
Developing Relationships is a Cognitive Process
26
Building End-To-End Relationships
27
[3.] Bring “Unsolicited Ideas” to the table; Ideas to Optimize Financial
Management Processes that are changing now or the next 3 years!
[1.] Understand the Business Issues, the Opportunities, and the
Challenges that are changing the Business Operations now or
in the next 3 years.
[2.] Understand the Financial Management Processes that are changing now
or may change in the next 3 years.
Changing Business Issues drive a change
in Financial Needs. . . align with What is Changing
Building End-To-End Relationships
Product Solutions “Support” Financial Processes,
they are not the Processes
28
Financial Management Processes use Products to Optimize
an element of those Processes
Cash Position [Operating Account]
• IB Checking
• NIB Checking
• Data Services
• Imaging Services
• Information Reporting
Receivables
• Cash Concentration
• Cashiering
• Image Deposits
• Lockbox Services
Payables
• ACH Services
• Controlled Disbursement
• Integrated Payables
• Payroll
• Wire
Too Little Cash[Credit]
• ABL
• Commercial Card
• Credit Card
• Credit Sweep
• CRE Loan
• Lease
• Revolver/LOC
• Standby Letter of Credit
• Syndication (Lead)
• Trade Finance
• Term Loan
Too Much Cash[Investments]
• Asset Management
• CD
• Corporate Trust/Escrow
• Custody
• Endowments & Foundations
• 401(k) Plans
• Investment Sweep
• Money Market
• Savings
RiskMitigation
• Derivatives
• FX
• Fraud Protection
• Insurance
• Letter of Credit
• Reconcilement Services
• Trade Services
Personal Banking
• Personal Investments
• Personal Trust*
• PB Deposits
• PB Loans
• Consumer Solutions*
• HELOAN
• HELOC
• Mortgage
• Other Loans
• Checking
• Savings
Building End-To-End Relationships
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Focus on Processes that are Changing. . .
not Products
The End-to-End Financial Management Processes. . .
Building End-To-End Relationships
30
Focus on Processes that are Changing. . .
not Products
The End-to-End Financial Management Processes include the
Personal Life of the Business Owner
Building End-To-End Relationships
Then Link the Changing Financial Management Processes
to Products (and then the Revenue)
31
Building End-To-End Relationships
Now Optimize any Areas of Concern
32
Electronic
Collection
Investments
Credit
Card
Disbursements
ChecksMerchant
ServicesCash
Electronic
Payments
Check
Payments
Private Banking
Personal BankingOperating Account
Payables Areas of Concern
1. Wants to reduce any possibility of fraud
exposure when using wireless networks
2. Would like to simplify payables and move
everything to one credit card
Payables Optimized
1. Integrated Payments
2. Corporate Card/Purchasing Card, if can
compete with American Express
Membership Rewards
Receivables Areas of Concern
1. Delay in deposits and checks coming to home
2. Concerns about website payments flowing
through multiple vendors (Website Host,
PayPal, Merchant Card Processor, Bank
Receivables Optimized
1. Lockbox
2. Schedule meeting with Merchant
Service Representative
Cash PositionAreas of Concern
1. Operating Line may not be sufficient to handle
several new clients
2. Would like to see all online accounts listed on
one screen, with real time reporting and a single
log on to simplify use (business and personal)
3. Wants to upgrade data systems, hardware and
software within the next two years
4. Potential acquisition of a new firm
5. Considering purchasing a townhouse for his child
Cash PositionOptimized
1. New Operating Line with higher limit
2. Business Online Banking, Single
View
3. Equipment Leasing
4. Acquisition Financing
5. Personal Real Estate Loan
Building End-To-End Relationships
Business Partners(s)
DDA/Cash Management DDA
MMA MMA
Line of Credit, Acquisition Financing Web-Based Banking
Equipment Loan/Lease Private Banking
Commercial Mortgage Investment Management
Payroll Retirement Planning/Retirement Plan
Merchant Account Jumbo Mortgage
401(k) Home Equity Lines or Loans
Liability Insurance Life Insurance
Key Man Insurance, Buy/Sell Agreement
Total: 10 Total: 9
Revenue Increases from Multiple Sources
33
Professional Practice: 18-years, $8,500,000 in sales
Think 65% of the
“Relationship”
Building End-To-End Relationships
What do You Know about the Business?Developing a Relationship Requires a Strategy and a Plan
34
The Financial Management
Processes change as the
Business Changes. . .
Developing a Relationship
starts with Knowing What’s
Changing in the Business
and the Business Owner’s
Life.
Building End-To-End Relationships
What do You Know about the Business?Developing a Relationship Requires a Strategy and a Plan
35
The RM is the Primary
Strategist. . . and a well
thought-out Strategy
requires multiple eyes
and multiple brains.
It requires a
Relationship Team
to both Build and
Execute the Strategy.
Building End-To-End Relationships
It Takes a Team to. . .Think Through How you can “Partner” with a Business Owner to Meet
Changing Opportunities and Challenges
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Building End-To-End Relationships
The Road Map for Leading the Processes
Three Focal Points. . .
37
Weekly
1. On-Going 1-on-1 Coaching of the
Defined Processes (the How-To’s).
2. Coaching based on Skills, not on
Concepts.
3. Coaching the to the Stages of
Relationship Development
4. Coaching the Key Technical
Skills
CoachingGuiding Consistent
Execution of the Critical
Process Elements
Articulated
ProcessesFully Defined Sales and
Sales Leadership Processes
1. Fully Defined Sales Leadership
Processes
2. Fully Defined Market
Management and Relationship
Development Processes
1. Vertically Aligned Messaging around each
Defined Process
2. Weekly Messaging on the strategic
importance of the Defined Processes
3. Linking all Market Strategies, Relationship
Strategies and Client Experience Expectations
to the Defined Processes
1. Expectations for the weekly use
of the key elements of the
Defined Processes.
2. Accountability for weekly use of
the key elements of the Defined
Processes.
1. Weekly “Look Ahead” Sales Meetings to maintain the Priorities and the Focus
Maintaining Weekly Priority on Opportunity Generation with Targeted Relationships
Maintaining Weekly Focus on Pipeline Pull-Through
Maintaining Weekly Focus on Activity and Call Balance Expectations
AccountabilityEnsuring Consistent
Use of the Defined and
Articulated Processes
1. Scheduled Coaching for all Team Members
every other Week
Coaching Relationship Development Skills at the 5-foot Level
Coaching Market Development Skills at the 5-foot Level
Coaching according to the “Stages”
2. Observation Calls with each Team Member
Monthly
3. Effectively Coaching Technical Skills
1
2 Weekly
3
Weekly