Introduction:
Relationship Marketing is the process of building long-term mutually beneficial relationships with customers. Financial Institutions in developed countries are using this marketing tool very effectively by taking full advantage of Information and Communication technologies.
The Bangladeshis Banking Industry which was operating in a bureaucratic style prior to 1991 had to undergo a large-scale transformation with the opening up of the economy. The Sector has been facing unprecedented challenges with the wave of liberalization, privatization, and globalization of Bangladesh's Economy. Banks in Bangladesh are under intense pressure in today’s volatile marketplace. Steep competition, globalization, growing customer demand, and exposure to higher credit risks are forcing banks to find new ways of improving profitability. On the other hand, cost-cutting measures have forced banks to manage operations with few Customers Relationship Managers and Product Specialists. Industry consolidation also poses fresh challenges to this sector.
Now, Financial Institutions are trying to provide all the services at the customer’s doorstep. The customer has become the focal point either to develop or maintain stability in the business. Every engagement with the customer is an opportunity to either develop or destroy a customer’s faith in the Bank. The expectations of the customers have also increased manyfold. Intense competition among the banks has redefined the concept of the entire banking system. The banks are looking for new ways not only to attract but also to retain customers and gain a competitive advantage over their competitors. The banks like other business organizations are deploying innovative sales techniques and advanced marketing tools to gain supremacy.
Trust-Based Selling:
From the newest lender to the most seasoned veteran, the 5Cs of credit is the cornerstone of their work. As this economy continues to be challenged and with credit issues dominating financial headlines, Character, Capacity, Capital, Collateral, and Conditions have perhaps never been more important.
Five sales Cs are in vogue as well. These competencies are as vital if a bank hopes to optimize
The client experience. Some history first, It was likely Eve that closed the first sale when she convinced Adam of the many benefits of taking a bite of the forbidden fruit.
In the early 1880s. John Patterson of the NCR Corporation helped build an empire by convincing both business owners and consumers that having a receipt for their purchases would be to everyone’s advantage. Patterson was a visionary and is widely known as the founder of modern selling.
Fast forward to consultative selling gurus like Tom Hopkins, Jeffrey Gitomer, and Brian Tracy who have trained millions around the globe. Much improved over product pushing, consultative selling made questions the star and put the product in the supporting cast; an effective process, no doubt. In the 21st Century, consultative selling may not be enough because:
• The internet has forever changed how buyers and sellers approach the process
• The buying cycle has lengthened 30% over the past five years
• The prospect/client seeks intrinsic value from their banker and being a good banker is no longer good enough.
Today, in this highly competitive environment, trust‐based selling it’s the key to building and sustaining value‐focused partnerships.
The New 5Cs:
Sales in the banking sector have begun to turn a corner. Accountability‐based Performance cultures have replaced event‐driven Sales Cultures. Inwardly focused cross-selling is supplanted by client-centric cross-solving. The customer experience surpasses “service” as a means to create loyalty.
Into this mix falls the new 5Cs of trust‐based selling:
• Conversations
• Curiosity
• Collaboration
• Customization
• Coaching
Conversations…the ultimate differentiator:
Recent data indicates 10‐12 touches are needed (letter, e‐mail, voice mail) before a cold prospect agrees to see a banker. Data also suggests that 54% of business bankers stop touching after the first rejection. A 2007 CSO Insights study also suggests it takes an average of seven calls for a prospect to become a client. Given those statistics how can sales professionals create differentiation? It’s all about the conversation.
Well-planned conversations targeted to the needs of the client build trust and move the process forward faster. Banks that have analyzed why their bankers do not get back in the door for a second call have found their bankers are too eager to present versus ask or “pitch” versus “catch.” Buyers have answers, sellers have the questions is a great mantra to live by as a sales banker.
• Here are a few best practices we’ve seen work well:
• A business banker in Maine emails several impactful Thought Starter questions ahead as a preliminary agenda. This approach not only shows the prospect the banker has prepared for the conversation but also helps focus the meeting. Talk about differentiation.
• A Relationship Manager in the Midwest brings a laminated sheet of discovery questions to an initial call that gets the discussion going:
• Where have you BEEN?
• Where are you NOW?
• Where are you GOING?
• How do you plan to get there?
• What stands in your way of achieving those goals?
• Talk about the top three initiatives here in the next 6‐12 months.
• What is your timeframe for those objectives?
• What issues will you face if you do or don’t execute your initiatives?
• How are decisions made here relating to choosing financial partners?
• What criteria will you use in selecting that partner?
• Where are you in this process?
• What mistakes do banks make when they attempt to build trust‐based relationships with clients?
• A lender in the south uses First Research to customize industry‐specific questions to the seven basic financial needs each business has. She is getting back in the door for a second call over 70% of the time.
Curiosity…creating the cliffhanger:
How does American Idol or any recurring television series keep viewers tuning in week after week? They always leave the audience wanting more. Premature presentations have always been a challenge for bankers. A quarter-over-quarter revenue mentality (Peppers and Rogers calls it the crisis of short-termism) has made matters worse. This conflict of results now has taken inquisitiveness to a new low.
Curiosity is controlled by the sales associate. The banker determines when to stop asking and start talking. They determine what is brought along as a leave-behind on an initial call. There is a difference between building curiosity and manipulating the situation. It is critical to be transparent as a salesperson. To build curiosity the banker can:
• Carefully consider what he or she brings along on each call. One bank encourages its calling staff to bring the following on an initial call; business cards, two pens that work, a notepad, a copy of their calendar 30‐60 days out, a value‐focused leave behind, and an open mind. The leave behind is interesting The bank calls it Power Resources – a list of sales and marketing books the business owner can use to become more effective and productive. No annual reports, no pitch books, no brochures. This is about the prospect, not the bank. Do it right and there will be plenty of time to share collateral.
• Be more interested than interested. Some banks subscribe to the theory that employing a memorized “elevator speech” or “value proposition presentation” creates differentiation.
Instead, it causes eyes to glaze over and certainly tells the business owner the banker in front of them is no better or different than what they have now.
• Answer a question with a question. Some call that the Socratic Model. When the CFO asks about cash management products, the banker can be ready with three or four questions about; what the business is doing now, how it is working, how technology is involved, etc. The great salesperson earns the right to present by uncovering as many issues as possible. When the business banker starts the conversion process, the business owner is imagining “Do I see myself banking with this person?” When the salesperson always leaves the call on a WOW note, the pre‐client will think “I wonder what the next conversation with this banker will sound like?” When the salesperson sets that tone, he or she will always have a better than average chance to get back in for another call and another call and…
Customization…remove the generic:
It isn’t possible to tailor every product for every situation. It is easy to understand, however, that every business owner buys remote capture, an HSA, or a loan for their own reasons. As the banker presents his or her solutions, therefore, landing those features and benefits in the life of every buyer in a manner that is best for them, creates a propensity for the buyer to say “yes.” Gaining knowledge as to “why” they buy can occur in the first or second meeting if the salesperson is adept at the Curious. Issues about the reasons for the services they have or believe they need, what type of banking relationship works for them, and criteria for their buying decisions all factor into future presentations.
One large bank we know employs the Sant Proposal Software which allows the banker to quickly customize presentations based on the objectives and needs of individual clients and prospects. Other banks employ Chief Marketing Officers to help assemble tailored presentation documents. For more great tips about customization and a terrific newsletter about how to create this 1-to-1 mindset, visit Peppers and Rogers at www.peppersandrogers.com.
Collaboration…the ultimate in transparency:
Working together works. Unfortunately, sales are many times seen as a war or a chess game. It is important for the salesperson to understand if there is a “fit” between the philosophy and the abilities of the bank and the vision the company has of what a banking relationship should be. If there is a mismatch during the sales process it won’t improve after the sale is made.
In Trust‐Based Selling Charles Green discusses the ultimate in transparency as the salesperson and the prospect assemble the proposal together. The banker discusses the margin they need and the value they bring to the table. When there is nothing to hide the dialogue is elevated to a collegial level and less negotiation is needed.
Coaching keeps the culture in motion:
None of the first four Cs occurs without an ongoing commitment to reinforce the process. Great sales coaches understand they manage numbers and lead people. In his soon‐to‐be classic book Go Put Your Strengths to Work, Marcus Buckingham suggests:
There is a fallacy that constantly working with sales associates on deficits helps improve results. Rather, a great sales coach helps his or her people improve their strengths to pull the culture to the next level. From a 5Cs perspective sales managers might ask themselves:
• How do I regularly reinforce conversations, curiosity, customization, and collaboration?
• What tools am I using to optimize our sales process?
• How do I interweave my vision of the client experience into team meetings and individual interactions with associates?
• During my one on ones with associates how much do I focus my conversations on results versus doing the right activities and behaviors?
• During joint calls what is my role and how am I trying to observe the other 4Cs?
Conclusion
Banks have started acknowledging the importance of the customers in developing their businesses. They have recognized that it is essential to protect and grow its customer base and ultimately its profitability. The banks can do this by building a strong relationship with the customers. To meet the customer needs and to beat the competition, they must deliver superior quality service. The CRM approach adopted by banks focuses on maximizing the value for the customer and the bank. The key drivers to customer loyalty are:
(a) Positive Staff Attitude.
(b) Honesty, Integrity, and Reliability.
(c) Productive advice and delivery of the promised service.
(d) Consistent delivery of superior quality service.
(e) Simplicity and easiness of doing business.
(f) A fair and efficient complaints resolution
References
• In 2006, Charles Green followed his now business classic, The Trusted Advisor with the best seller, Trust‐Based Selling
• Implement a Customer-Centric Process in Banks.
• Lambert, D., M. (2010). Customer relationship management as a business process. The Journal of Business & Industrial Marketing, 25(1), 4.
• Jack Hubbard is Chief Experience Officer at St. Meyer & Hubbard-Conversations with Prospects, the company’s first book
• (2010). Effective Role of Customer Relationship Management in Banking Sector, Global Research Review, New Delhi.
Written By: MD. Shameem Ahmeed (Founder of Lukwow.com)