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 on prospects is doing two things effectively: Calling the right people, who happen to be A-grade prospects, and secondly, following a process that assures premium pricing so you never have to hear again those dreaded words, “We can do the deal if we match rates?”
Most important, is your institution being paid for your unique selling propositions (UPSs), or do your lenders put you in a position of having to turn away a deal or match them every time a desperate competitor undercuts you, hurting not only the borrower, but the bank who 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.
If you’re not currently getting these results, you’re not alone. Having talked with hundreds of bank CEOs over the last few years, it’s common for me to hear those three pain points.
Commercial Loan Bloodbath Coming
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.
In fact, you can count the months until good credits will be abandoned by their fickle friends who are courting them today in an attempt to deploy their funds.
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 receive instead a notice that reads, “Pay up in 30 days because we no longer have an appetite for your kind of loan.”
What’s critical to making sure 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? Get an iron-clad system established now to make sure your team knows exactly who to call on, 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 important – a system that compels the prospect to reveal how much your unique selling propositions will bring to their bottom line.
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?”
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.
These questions, by the way, are just one small piece of a very important sales process whereby no steps can be missed.
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).
Roxanne Emmerich is CEO of The Emmerich Group and author of “The New Game Of Banking,” www.EmmerichFinancial.com.
