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MZ BIERLY CONSULTING
Building Momentum
with Small Businesses
Strategies for Acquiring and Retaining
Business Clients
Ned Miller
MZ BIERLY CONSULTING, INC.
610-296-4772
nmiller@mzbierlyconsulting.com
www.mzbierlyconsulting.com
MZ BIERLY CONSULTING
Notice
This publication is protected by copyright. It is licensed for a single user. It is
licensed for internal use only.
Copyright © 2008 – 2013 MZ BIERLY CONSULTING, INC.
ALL RIGHTS RESERVED
2
MZ BIERLY CONSULTING
 It’s a changing environment – and it’s the right time to focus on the
Small Business Market.
 Recent Research on what Small Business Owners want from their
Small Business Bankers.
 4 Key Initiatives for Banks Interested in building sustainable results
in the Small Business Market.
 Resources/tools to help.
 Q&A (as time permits).
Our Discussion Today
3
MZ BIERLY CONSULTING
 The “trust issue” that was part of the recession has many small
business owners “looking around” for a “relationship” they can trust.
 Business owners are pessimistic about future operating
environment.
 Everybody is trying to get in the small business lending game.
 Approval rates are inching up.
 Larger banks are hiring small business bankers; banks of all sizes
are pushing branch managers out of the branch trying to get more
feet on the street.
The Big Picture
4
MZ BIERLY CONSULTING
Primary Bank Satisfaction Declined at Medium Banks
5
© 2013 All Rights
Reserved.
74%
69%
71%
73% 73%
75%
72% 73%
58%
61%
65% 64%
67%
65%
67%
64%
50%
48%
49%
51% 50% 49%
44%
46%
40%
45%
50%
55%
60%
65%
70%
75%
80%
2005 2006 2007 2008 2009 2010 2011 2012
Note: Bank trending data is representative of bank organization in 4Q2012.
%Very
Satisfied
Small Banks
(Assets
<$1B)
Medium Banks
(Assets $1B-
$50B)
Large Banks
(Assets
>$50B)
Medium banks had a decline in delight from the prior year and are now at 64%.
Small Business Trailing 4 Quarter Data
$100K-<$10MM
Q: Overall, how satisfied are you with your company’s primary bank?
MZ BIERLY CONSULTING
Prospecting Model: The Satisfaction Curve
6
All Relationships go through
periods of Satisfaction and
Dissatisfaction.
MZ BIERLY CONSULTING
Prospecting Model: The Satisfaction Curve
7
“RQS” Shoppers make
changes in banking
relationships at the bottom
of the curve.
RQS = Relationship, Quality or Service Shoppers
MZ BIERLY CONSULTING
Large Banks Score 11% or More Below Medium Banks
8
40%41%
29%
22%
29% 24%
0%
10%
20%
30%
40%
%Agree
Strongly
The gap between large and small banks is widest on the attitudes: will stand by us in tough
times, effectively meets our credit needs and has competitively priced service charges.
$100K-<$10MM
90% Q: Please indicate how strongly you agree or disagree with each statement. My primary
bank…
79%
74%
65%
76% 73%
78%
62%
57%
62%
52%
70%
66% 64% 65%
44% 44%
50%53% 51%
47%
54%
50%
60%
70%
80%
Small Banks
(Assets
<$1B)
Medium
Banks (Assets
$1B-
$50B)
Large Banks
(Assets
>$50B)
+4%
+5%
+3%
1Q2012-4Q2012
Small Business Rolling 4 Quarter Data
= arrows denote change since previous year
-6%
+6%
+5%
+5%
+5%
+9%
-5%
Is responsive Is easy to do Appreciates Gets things Is financially Effectively Will stand by Has Has
to requests or business with our business right the first stable meets credit us in tough competitively competitive
questions time needs times priced service
charges
rates and fees
on loans
MZ BIERLY CONSULTING
Market Research
9
MZ BIERLY CONSULTING
 Who is your toughest competition today in the small business
market? Why?
Quick Question
10
MZ BIERLY CONSULTING
Big Banks?
11
“We are competing on price. It’s
a function of the market. If there
is a client we want, we will be
competitive on price.”
Ergetu Merete, Business Banking
Division Manager for Philadelphia Area
Business Journal, September 2012
MZ BIERLY CONSULTING
Independent Banks?
12
MZ BIERLY CONSULTING
• Teaneck, N.J.'s Cross River Bank, which holds $199 million in
assets, is responding to pressure to gain business customers by
going door-to-door, pitching 0 percent loans to dry cleaners, spas,
and medical offices in the city. Cross River Bank Chairman and
interim CEO Gilles Gade says the program, which has about $1
million to lend initially, is primarily meant to shore up goodwill in the
community and net more long-term business customers. The bank
has so far written about 20 one-year loans for amounts ranging from
$5,000 to $20,000, Gade says.
From "N.J. Bank Hits the Streets With Door-to-Door Lending Campaign"
American Banker (08/09/12)
Idiot or Genius?
13
MZ BIERLY CONSULTING
Each banker has a Default Value Proposition
1. Low-Price/Low-Structure Provider
 “Tell me what you have at your current bank . . . we’ll beat it.”
2. Service
 “We’ll be accessible and responsive. You’ll think you’re my only
client.”
3. Business Acumen (Business Experience and Expertise)
 “I’ll understand your business, help you anticipate your needs,
and help you navigate through increasingly complex financial
choices. . . better than any other banker.”
Values and Value Propositions
14
MZ BIERLY CONSULTING
This study correlates skills with
“Customer Satisfaction” and with
the likelihood a Business Owner
would refer you to other
Business Owners.
Data from the Enterprise Council on Small Business
Business Owners and Business Acumen
15
MZ BIERLY CONSULTING
The Key Skills
from the Study.
Data from the Enterprise Council on Small Business
Business Owners and Business Acumen
16
MZ BIERLY CONSULTING
The Questions
that drive results
and satisfaction.
Data from the Enterprise Council on Small Business
Business Owners and Business Acumen
17
MZ BIERLY CONSULTING
The Key
Questions that
drive satisfaction.
Data from the Enterprise Council on Small Business
Business Owners and Business Acumen
18
MZ BIERLY CONSULTING
Data Courtesy of the Enterprise Council on Small Business
Relationship
Development
Strategies that
drive satisfaction.
Business Owners and Business Acumen
19
MZ BIERLY CONSULTING
Level of Relationship is Based on Value Drivers
20
 Not all Decision Makers want the same level of relationship with an RM.
 Adding Value is based on matching the value driver of a Decision Maker.
Value Drivers. . . What the Decision Maker is looking for
5
1
2
3
4
MZ BIERLY CONSULTING
What Does it Take: Building
Relationship Management Skills
21
Reacting to Opportunities Developing New Opportunities
Stage 1 Stage 2 Stage 3 Stage 4
Stance:
 Waiting for opportunities
Stance:
 Proactively seeking opportunities
part of the time
Stance:
 Seeking qualified opportunities
regularly
Stance:
 Actively building market share, wallet
share and developing opportunities
Methods:
 Walk-ins
 Irregular lead generation
 Referrals from a few long-time
clients or “well-worn” referral
sources
 Lead generation is largely reactive
 Product-focused client discussions
Methods:
 Some referrals from clients
 Generating leads from any and
all businesses
 Identifying and building new
referral sources
 Focuses at Controller or VP
Finance Level
 Focuses on “financial issues”
 Sees role as sole “executor” of
relationship
Methods:
 Focused and proactive lead
generation
 Effective use of testimonial
referral sources
 Focuses at “C-Suite” level, builds
strategic relationships
 Sees role as “strategist”
 Effectively uses Bank’s Senior
Management to build
relationships
Methods:
 Actively cultivating referral network
and systematically using it
 Actively working the best clients and
prospects
 Always seeking new “niche”
opportunities
 Consistently uses Experience and
Expertise as a Value Proposition
 Highly effective at adjusting lead
sources and a building brand
Characteristics:
 Infrequent calling
 Little planning or structure to
relationship management process
 Works “whatever is in front of me”
 Focuses on credit/product strategy
first then “sales” strategy
 Value proposition centers around
price/structure or “client service”
Characteristics:
 Meets target level of calls, but
little focus or preparation
 “I’ll take whatever I can get”
orientation
 Selling 1 product category at a
time, leads with loans
 Identification of opportunities
often limited to 1-year time frame
 Inconsistent results and
“cycling” pipeline
Characteristics:
 Stays focused on targeted lists
 Persistent, never gives up
 Comfortable at all levels of the C-
Suite
 A focus on depth of relationship
 Consistently identifies
opportunities (short-term, mid-
term, long-term, explicit and
implied)
 Consistently generates results
Characteristics:
 Always aware of new opportunities
 Always thinking one year ahead
 An articulated plan for consistently
developing new opportunities
 Long-term, expertise-based
relationships
Characterized by Product Acumen and
Strategizing Transactions
MZ BIERLY CONSULTING
What Does it Take: Building
Relationship Management Skills
22
Reacting to Opportunities Developing New Opportunities
Stage 1 Stage 2 Stage 3 Stage 4
Stance:
 Waiting for opportunities
Stance:
 Proactively seeking opportunities
part of the time
Stance:
 Seeking qualified opportunities
regularly
Stance:
 Actively building market share, wallet
share and developing opportunities
Methods:
 Walk-ins
 Irregular lead generation
 Referrals from a few long-time
clients or “well-worn” referral
sources
 Lead generation is largely reactive
 Product-focused client discussions
Methods:
 Some referrals from clients
 Generating leads from any and
all businesses
 Identifying and building new
referral sources
 Focuses at Controller or VP
Finance Level
 Focuses on “financial issues”
 Sees role as sole “executor” of
relationship
Methods:
 Focused and proactive lead
generation
 Effective use of testimonial
referral sources
 Focuses at “C-Suite” level, builds
strategic relationships
 Sees role as “strategist”
 Effectively uses Bank’s Senior
Management to build
relationships
Methods:
 Actively cultivating referral network
and systematically using it
 Actively working the best clients and
prospects
 Always seeking new “niche”
opportunities
 Consistently uses Experience and
Expertise as a Value Proposition
 Highly effective at adjusting lead
sources and a building brand
Characteristics:
 Infrequent calling
 Little planning or structure to
relationship management process
 Works “whatever is in front of me”
 Focuses on credit/product strategy
first then “sales” strategy
 Value proposition centers around
price/structure or “client service”
Characteristics:
 Meets target level of calls, but
little focus or preparation
 “I’ll take whatever I can get”
orientation
 Selling 1 product category at a
time, leads with loans
 Identification of opportunities
often limited to 1-year time frame
 Inconsistent results and
“cycling” pipeline
Characteristics:
 Stays focused on targeted lists
 Persistent, never gives up
 Comfortable at all levels of the C-
Suite
 A focus on depth of relationship
 Consistently identifies
opportunities (short-term, mid-
term, long-term, explicit and
implied)
 Consistently generates results
Characteristics:
 Always aware of new opportunities
 Always thinking one year ahead
 An articulated plan for consistently
developing new opportunities
 Long-term, expertise-based
relationships
Characterized by Business Acumen
and Strategizing Relationships
MZ BIERLY CONSULTING
 What percentage of your Small Business Lenders are in each
stage?
 What percentage of your Branch Managers are in each stage?
 Do your Sales Managers have the coaching skills, tools and
techniques to get their teams to the next level?
Quick Reality Check
23
MZ BIERLY CONSULTING
Managing Market and Relationship Strategies
24
MZ BIERLY CONSULTING
Managing Market and Relationship Strategies
25
Three Sources of
Business. . .
Three Steps:
Identify, Plan, Execute
Market Management Process
Relationship Building Process
Face-to-Face Meeting Process
MZ BIERLY CONSULTING
Are You Taking Care of Your Customers?
26
MZ BIERLY CONSULTING
Adding Value Adds Revenue and Adds Loyalty
27
Company Decision Makers
DDA/Treasury Management Personal DDA/Private Banking
Working Capital, Acquisition Financing Investments
Equipment Loans/Leases Jumbo Mortgage
Commercial Mortgage HELOC
Employee Banking Life Insurance
Investments Retirement Planning/Retirement Plan
401(k) Estate Planning
Liability Insurance
Key Man Insurance, Buy/Sell Agreement
Total: 9 Total: 7
Business Services: 20-years, $3,500,000 in sales
MZ BIERLY CONSULTING
1Q2011-4Q2011
Total
Primary Bank Size
Large Banks
(Assets >$50B)
Medium Banks
(Assets $1B-
$50B)
Small Banks
(Assets <$1B)
Product Usage at Any Institution
Total Products Used 7.2 7.2 6.9 7.3
Cash Management and Deposit Services 4.8 4.7 4.6 4.8
Credit Services 1.2 1.0 1.3 1.6
Other Services 1.2 1.4 1.1 0.9
Penetration Ratio
Total Products Used 79% 77% 76% 84%
Cash Management and Deposit Services 83% 83% 81% 90%
Credit Services 76% 70% 69% 80%
Other Services 64% 67% 57% 60%
Small Business Rolling 4 Quarter Data
Q: Please indicate which of the following products and services your company currently
uses at your primary bank and which are used at another bank.
7-3
$100K-<$10MM
Primary Bank has over 75% of Products Used
28
MZ BIERLY CONSULTING
The Market Management Model: It Starts with Leads
29
Lead Generation
Qualifying
Proposal
Internal Sale
External Sale
Closed
Transaction
Build Long-
Term
Relationship
Closed Business Out
Opportunities In
MZ BIERLY CONSULTING
The Market Management Model
30
Lead Generation
Qualifying
Proposal
Internal Sale
External Sale
Closed
Transaction
Build Long-
Term
Relationship
Comes out the bottom.
What went in the top…
To change the quantity or
quality of what comes out the
bottom. . . Change what goes
in the top.
MZ BIERLY CONSULTING
1. A Relationship Development Meeting is a face-to-face meeting that
focuses on two things:
 Identifying and developing the Business Owner’s tangible needs
and intangible needs.
 Matching your solutions to the developed and agreed-upon
needs.
2. A Marketing Call (or Marketing Touch) is an interaction that keeps
the bank or banker “top-of-mind” with the client/prospect.
 An “overview” of Business Owner’s possible needs.
 An overview of “what we do”.
 “If we can help. . . Let me know.”
Relationship Development Meetings vs. Marketing
Calls
31
MZ BIERLY CONSULTING
 What percentage of your team’s calls are Marketing
Calls?
 What do you have to do to increase the percentage of
Relationship Development Calls?
Reality Check
32
MZ BIERLY CONSULTING
Demonstrating Business Acumen doesn’t
happen in 1 or even 2 Meetings.
Building these Relationships require a series
of Relationship Management Meetings that
build momentum. . . and loyalty.
And, requires the interpersonal and
communication skills to “connect the dots”
during the business conversation. . . the
connected dots that build clearly defined next
steps in advancing relationship.
Changing the Conversation to “Business Acumen”
33
Each Relationship Management
Meeting is a Structured
Communication Process
MZ BIERLY CONSULTING
Changing the Conversation to “Business Acumen”
34
Step 2 is the most important step for
aligning with the Key Decision
Maker’s Business Strategy,
Business Plan, Business
Objectives, Business Operations
and Business Management
Processes.
2
MZ BIERLY CONSULTING
Changing the Conversation to “Business Acumen”
35
1. Where are you banking?
2. What products are you using?
3. How are they priced and structured?
4. What 2 things do you wish your bank
was doing but they’re not?
5. Can I have a copy of your
statements to put together an offer of
how we would handle your
relationship?
Where are the Business Issues here?
These questions focus on products;
comparing your products with a
competitor’s. These questions demonstrate
product acumen!!
Look at these Questions. . .
2
MZ BIERLY CONSULTING
Changing the Conversation to “Business Acumen”
36
These questions align with a Key Decision Maker’s
Business Plan, Business Strategy, Business
Objectives, Business Operations and Business
Management Processes. These questions demonstrate
Business Acumen!!
Use this Question Set to Demonstrate Business
Acumen and Build Relationship Momentum
2
MZ BIERLY CONSULTING
1. Keys to success
affect current and future
decisions.
3. Industry trends, business
changes in next 3 years.
2. Industry trends affecting the
business today.
4. Current and future
changes force changes in
current and future business
operations.
5. Current and future
changes in business
operations force changes
in current and future
financial operations.
6. Changing financial
operations create changes in
the financial needs and then
an evaluation of the solutions
currently in place.
“Think Like the Business Owner”
37
MZ BIERLY CONSULTING
BUILD A TARGET PROFILE
Key Initiative #1
38
MZ BIERLY CONSULTING
High Appeal Industries Limited Appeal Industries
 Manufacturers  Real Estate Investment
 Wholesalers  Low-End Retail
 Distributors  Restaurants
 Architect, Engineering and Business Service
Firms
 Mini-Warehouses/Carwashes
 Law Practices  Landscaping
 Accounting Firms  Service or Gas Stations
 Insurance Brokers or Firms  Used Car Dealerships
 Large General Contractors
 Medical, Dental and Health Practices
Define Your Core Relationship Profile
39
MZ BIERLY CONSULTING
Business Characteristics
 In business over 3 years
 Sales revenue between $500,000 and $2,500,000
 Employing more than 5 people
 Location within footprint
 Privately held with experienced management team
 Borrowing needs under $500,000
 Profitable (Net Profit After Tax) for the last year
 Leverage (Debt-to-Worth) less than 3 to 1
 Deposit balances average more than $25,000
 Using or needing 5 or more business banking/consumer banking product categories
Define Your Core Relationship Profile
40
MZ BIERLY CONSULTING
Retention Relationships are clients who meet these criteria:
 Have good credit quality,
and are
 In top 10% of aggregate loans and deposit balances,
 Your Bank has >60% of the loans and deposits of the business.
Expansion Relationships are clients who meet these criteria:
 Have good credit quality and match the Core Relationship Profile,
and are
 Your Bank has less than <60% of the loans and deposits of the business,
and have
 Significant cross-sell/up-sell opportunities in next 18 months.
Segment Your Business Customer Relationships
41
MZ BIERLY CONSULTING
 Define the annual activity for Retention, Expansion and Prospect
Relationships.
 Target 5 calls per week [60% of the calls to be proactive].
 Target the right mix of pre-scheduled appointments:
• % with Retention, Expansion and Acquisition Relationships
• % of joint calls
• % of calls with referral sources or others in network
Be Clear About Call Activity/Call Mix
42
MZ BIERLY CONSULTING
STRENGTHEN
EXPANSION RELATIONSHIPS
Key Initiative #2
43
MZ BIERLY CONSULTING
Relationship Expansion Process Initiatives
44
These are the 7 Elements in
that drive a Relationship
Expansion Process.
These are the process
elements that drive Banker
Success in the building a
Brand. . . and is the result of
consistent execution.
MZ BIERLY CONSULTING
Expansion Relationships
45
Determine possible opportunities.
Use a Relationship Profiling Model
to Identify and Follow-up on
opportunities to strengthen
Expansion Relationships.
MZ BIERLY CONSULTING
 Build a Client Folder with:
• Industry Trends and Data (VerticaIQ/First
Research/eMentor/IBISWorld)
• Trade association data on the industry
• The company’s web site
• News articles on the Business and Business Owner
• Bank-specific information about the industry (e.g. Sample call
plan templates, case studies, product brochures, etc.)
Identify the Opportunities for Expansion
46
MZ BIERLY CONSULTING
ACQUIRE
NEW RELATIONSHIPS
Key Initiative #3
47
MZ BIERLY CONSULTING
 Overemphasizing prospecting. . . “Don’t forget your Key and High Potential
Clients.”
 Not providing direction on which prospects to target. . . “Build a list of the
prospects you want to do business with.”
 Not coaching bankers on how to leverage their network (and that includes
senior management, directors, etc.). . . “Use client referrals and testimonials
to get appointments.”
 Not having a process for generating leads. . . “Coach the top of the funnel.”
 The Super-Rep Syndrome. . . “Teach them all to fish.”
 Not understanding your bankers’ default value propositions . . . “Coach to
the value proposition that you believe in.”
 Defining success too narrowly. . . “Celebrate the small victories.”
7 Mistakes Sales Leaders Make
48
MZ BIERLY CONSULTING
 Not having a “Vetted” Prospect List. . . “Build a list of the Businesses you
want to do business with.”
 Not using their network. . . “Using client referrals and testimonials to get
appointments.”
 Not having a defined strategy. . . “Building relationships based on Value
Added.”
 Planning one meeting at a time. . . “Always plan 2 calls at a time, gin up the
interest in the next meeting before you leave their office.”
 Not preparing “cognitively”. . . “Being prepared is a huge differentiator and
adds value.”
 Using the wrong question set. . . “Use questions that add value.”
 Selling to the first need. . . “It takes multiple needs to build enough
momentum to overcome inertia.”
7 Mistakes Bankers Make in Prospecting
49
MZ BIERLY CONSULTING
6 Steps for Building New Relationships
50
1. Build a Vetted Prospect List
2. Select the first 5 Prospects you
want to focus on
3. Build a Relationship Strategy,
Plan the first 3 Meetings for the
selected Prospects
4. Use a Testimonial Referral to
Get the 1st Appointment
5. Debrief the 1st Meeting, adjust
the Plan for the 2nd and 3rd
Meeting. Keep a focus on what
is changing (not “optimized”)
6. Deliver 1 or more “Optimized
Solutions” in the 3rd Meeting
MZ BIERLY CONSULTING
 “It's Marketing's job to provide us leads.”
 “Get me a better list.”
• A list of businesses that want to change banks now!
• “The list isn’t perfect. . . there are dead people on here!”
 Focus on former customers from “my old bank”.
 Each Banker builds his own prospect list.
• Not sharing it with other team members for feedback.
 Rely on a single source for prospect names.
 “I have an amazing mind, I can keep it all in my head.”
Bad “Best Practices” for Building Prospect Lists
51
MZ BIERLY CONSULTING
What is a “Vetted” Prospect List?
52
MZ BIERLY CONSULTING
 D&B Strategic Marketing Database or Zapdata.com (Hoovers Lead Builder)
 ReferenceUSA
 Local Industrial Development Authority (electronic version)
 UCC Filings (there are compilation services)
 Local Business Publication directories (not always a good choice, too
visible)
 Guidestar.org (a great source for 501C3s)
 Trade Association Memberships or Websites (a few examples)
• American Society of Association Executives (www.asaenet.org/find/)
• American Dental Association directory (www.ada.org)
• American Institute of Architects directory (www.AIA.org)
• State and local trade association listings
Use Multiple Sources for Your Prospect List
53
MZ BIERLY CONSULTING
Recent studies in the banking industry show that Business Owners are
more than willing to help you. . .
 66% of Business Owners are willing to provide referrals to Bankers.
But to get the referral you will have to ask; most Bankers don’t ask.
 Only 22% of small-to-medium-size Business Owners have been
asked for a referral in the past 24 months.
 Only 37% of Middle Market Decision Makers have been asked for a
referral in the past 24 months.
Is a Consistent Flow of Referrals a Possibility?
54
MZ BIERLY CONSULTING
Small Banks’ Ratings on Willingness to Refer Have Improved,
While Medium Bank’s Ratings Declined
55
67% 66% 68%
72% 71%71%
63%
70%
47%
60%
56%
59%
64%
61%
63% 57%
43%
40%
41% 41% 41% 40%
35% 36%
75%
70%
65%
60%
55%
50%
45%
40%
35%
30% 2005 2006 2007 2008 2009 2010 2011 2012
Note: Bank trending data is representative of bank organization in 4Q2012.
Small Business Trailing 4 Quarter Data
%Agree
Strongly
Small Banks
(Assets
<$1B)
Medium Banks
(Assets $1B-
$50B)
Large Banks
(Assets
>$50B)
Small banks have improved on willingness to refer and are currently at 70% agree
strongly, while medium banks dropped to 57%.
$100K-<$10MM
Q: Please indicate how strongly you agree or disagree with each statement. I would
refer a company with similar needs to my primary bank.
MZ BIERLY CONSULTING
Why do Business Owners provide referrals?
 They may like to help other business people.
 They may want to be “heroes” to their friends and business partners.
 They understand that it’s the best way to grow business for them
and for you.
 They may see referrals as a way to “pay you back”.
The Whys of Referrals
56
MZ BIERLY CONSULTING
Why don’t Bankers ask for referrals?
 The quality of referrals isn’t always the best.
 They don’t want to “harass” good clients.
 They’re not sure whom to ask; they’re not sure when to ask.
 They don’t have a process for asking!
The Whys of Referrals
57
MZ BIERLY CONSULTING
Why don’t Bankers ask for referrals?
 The quality of referrals isn’t always the best.
 They don’t want to “harass” good clients.
 They’re not sure whom to ask; they’re not sure when to ask.
 They don’t have a process for asking!
http://www.mzbierlyconsulting.com/how-to-ask-customers-for-quality-
referrals
The Whys of Referrals
58
MZ BIERLY CONSULTING
1. Wait and See: “If I continually provide outstanding service. . . when
they hear of an opportunity they’ll give me a call.”
2. Let them know I’d like a referral: “Jack, if you think of anyone who
would be a good a match for me and the Bank I’d love to talk with
them. Let me know if you think of anyone.”
3. Proactively ask for an Introduction: “Jack, there are a several
people in the area I’m trying to meet. I was hoping I could run their
names by you. . .”
Asking for Referrals
There are multiple ways to build a Network Referral Process. . . but
one works better than the others. Here are the three most prevalent:
59
MZ BIERLY CONSULTING
 Industry information
 Financial information
 Website
 Call planning templates
 Simplified relationship plans
 Cash cycle maps
 LinkedIn
Use tools that make you look good
60
MZ BIERLY CONSULTING
These are your Meeting Objectives for the Business Operations Meeting:
1. Demonstrate your knowledge and understanding of some of the key issues in the industry sector of the
business.
2. Understand the keys to success used to build the business.
3. Understand the current [1-year] business objectives of the business.
4. Understand the future [3-year] business objectives.
5. Understand the day-to-day business operations of the business.
6. Understand how his business objectives and business operations will change over the next year, the next
3 years.
7. Identify three needs, short-term, mid-term or long-term; summarize and then prioritize the needs; use the
top prioritized need to get the next appointment.
8. As a part of the next meeting, frame a Financial Operations Discussion (with key parties) to review the
current cash-cycle and potentially to offer ideas for optimizing collections, disbursements and working
capital management.
First Call Objectives — Use a Template
61
MZ BIERLY CONSULTING
Call Plan Templates
62
MZ BIERLY CONSULTING
COACHING THE
SMALL BUSINESS INITIATIVE
Key Initiative #4
63
MZ BIERLY CONSULTING
Reacting to Opportunities Developing New Opportunities
Stage 1 Stage 2 Stage 3 Stage 4
Stance:
 Waiting for opportunities to come
in
Stance:
 Proactively seeking opportunities
part of the time
Stance:
 Seeking qualified opportunities
regularly
Stance:
 Actively building market share,
wallet share and developing
opportunities
Methods:
 Walk-ins
 Irregular lead generation
 Referrals from a few long-time
customers or “well-worn” referral
sources
 Lead generation is largely
reactive
 Product-focused client
discussions
Methods:
 Some referrals from customers
 Generating leads from any and all
businesses
 Identifying and building new
referral sources
 Focuses at the Business/Office
Manager Level
 Focuses primarily on product
issues
Methods:
 Focused and proactive lead
generation
 Effective use of testimonial referral
sources
 Focuses at Business Owner level,
builds Level 3 or 4 relationships
 Has effective Market and
Relationship Strategies
 Effectively uses Business Partners
to build relationships
Methods:
 Actively building a referral
network and effectively using it
 Actively working the best clients
and prospects
 Actively building niches
 Consistently uses Business
Acumen as a Value Proposition
 Highly effective at adjusting lead
sources and building a brand
Characteristics:
 Infrequent calling, little planning
or structure to calling effort
 Works “whatever is in front of me”
focus
 Focuses on credit/product
strategy first then “sales” strategy
 Value proposition centers around
price/structure or “customer
service”
Characteristics:
 Meets target level of calls, but
little focus or preparation
 “I’ll take whatever I can get”
orientation
 Selling 1 product category at a
time, leads “scorecard” product
 Identification of opportunities
limited to 1-year time frame
 inconsistent results and
“cycling” pipeline
Characteristics:
 Stays focused on targeted lists
 Persistent, never gives up
 A focus on depth of relationship
 Completely comfortable with
Business Operations and Financial
Operations Conversations
 Consistently identifies opportunities
(short-term, mid-term, long-term)
 Consistently generates results
Characteristics:
 Always aware of new
opportunities
 Always thinking one year ahead
 An articulated plan for
consistently developing new
opportunities
 Long-term, expertise-based
relationships
Direction: Build the Activity
Guidance: Build the Quality
Support: Remove the Barriers
Coaching the Stages. . . Bi-Weekly
64
MZ BIERLY CONSULTING
The “End State” of Stage 1 is learning to Connect with the Business Owner.
The Banker is ready for Stage 2 Coaching when she consistently demonstrates
these skills:
 Comfortable on the Business Owner’s “turf”.
 Confident talking about business operations [not just products] with the
Business Owner.
 Convinced he has “something of value” [beyond just products].
 Assertive enough to “lead” the meeting with the Business Owner.
These skills typically require 75 to 125 calls to learn—for more insights go to:
http://www.mzbierlyconsulting.com/small-business-strategy-coaching-branch-
managers
Coaching Stage 1 (to Stage 2)
65
MZ BIERLY CONSULTING
 Keep the Banker Targeted. Build and “Vet” a list of 35 to 50 Businesses
(the Targeted Business List). Use these lists to build the Targeted Business
List: the Banker’s current Retention, Expansion and Other Lists.
 Begin to “encourage” planning. Ask the Banker to build a Client Folder
for each Relationship before contacting the Business Owner [they probably
won’t, it’s OK for now].
 Ask the Banker to review the Client Folder and to use one of the Quick
Reference Guides for each call [they probably won’t, it’s OK for now].
Coaching Stage 1 (to Stage 2)
66
MZ BIERLY CONSULTING
In each bi-weekly coaching session, debrief 2 or 3 meetings the Banker had in
the last 2 weeks. Debrief the meetings by asking all of these questions, in this
sequence:
 “How did the meeting go?”
 “Did you find any opportunities during the meeting?”
 “What did you learn about the industry that this business operates in?”
 “What did you learn about the Business Owner’s business objectives today,
over the next year, over the next 3 years?”
 “What did you learn about the day-to-day business operations of this
business?”
 “What did you learn about the Business Owner and what he/she “values”?
 “How did the Business Owner describe the value proposition he uses in his
business?”
Coaching Stage 1 (to Stage 2)
67
MZ BIERLY CONSULTING
 Re-Establish the “Priorities” every Monday Morning.
 Use Monday Morning Sales Meetings to continually re-establish the priority
of “meeting with” and “learning about” the targeted businesses.
 A conference call is OK.
 The Small Business segment of your sales meeting should not exceed 30
minutes.
 The “accountability” topics for Stage 1 Team Members are these. Ask each
Stage 1 Team Member 2 of these 3 questions (ask the Stage 2 Team
Members their questions, not these):
• “What targeted businesses are you calling on this week?”
• “Pick 1 targeted business you met with last week, what did you learn
about the business and its operations?”
• “Are you finding any opportunities in your meetings with the businesses
on your targeted lists?”
Coaching Stage 1 (to Stage 2)
68
MZ BIERLY CONSULTING
Questions?
69
MZ BIERLY CONSULTING
“When all is said and done, more is said than done.”
Lou Holtz
70
MZ BIERLY CONSULTING
Visit Our Website
71
After the conference take a few minutes to
explore our website. . .
And register for our email newsletters and blog.
Each month you’ll get suggestions, tips, and
how-to’s to fine-tune your sales and sales
leadership processes.
Find out about our archived webinars on sales
and sales leadership topics.
To find out more about our resources for small
business banking teams go to
www.mzbierlyconsulting.com or call Ned Miller
at (610) 296-4772 or email him at
nmiller@mzbierlyconsulting.com
Bonus offer: Article on “How to Improve the
ROI on Training Branch Managers” at
http://www.mzbierlyconsulting.com/a-winning-
strategy/

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Building Momentum with Small Businesses

  • 1. MZ BIERLY CONSULTING Building Momentum with Small Businesses Strategies for Acquiring and Retaining Business Clients Ned Miller MZ BIERLY CONSULTING, INC. 610-296-4772 nmiller@mzbierlyconsulting.com www.mzbierlyconsulting.com
  • 2. MZ BIERLY CONSULTING Notice This publication is protected by copyright. It is licensed for a single user. It is licensed for internal use only. Copyright © 2008 – 2013 MZ BIERLY CONSULTING, INC. ALL RIGHTS RESERVED 2
  • 3. MZ BIERLY CONSULTING  It’s a changing environment – and it’s the right time to focus on the Small Business Market.  Recent Research on what Small Business Owners want from their Small Business Bankers.  4 Key Initiatives for Banks Interested in building sustainable results in the Small Business Market.  Resources/tools to help.  Q&A (as time permits). Our Discussion Today 3
  • 4. MZ BIERLY CONSULTING  The “trust issue” that was part of the recession has many small business owners “looking around” for a “relationship” they can trust.  Business owners are pessimistic about future operating environment.  Everybody is trying to get in the small business lending game.  Approval rates are inching up.  Larger banks are hiring small business bankers; banks of all sizes are pushing branch managers out of the branch trying to get more feet on the street. The Big Picture 4
  • 5. MZ BIERLY CONSULTING Primary Bank Satisfaction Declined at Medium Banks 5 © 2013 All Rights Reserved. 74% 69% 71% 73% 73% 75% 72% 73% 58% 61% 65% 64% 67% 65% 67% 64% 50% 48% 49% 51% 50% 49% 44% 46% 40% 45% 50% 55% 60% 65% 70% 75% 80% 2005 2006 2007 2008 2009 2010 2011 2012 Note: Bank trending data is representative of bank organization in 4Q2012. %Very Satisfied Small Banks (Assets <$1B) Medium Banks (Assets $1B- $50B) Large Banks (Assets >$50B) Medium banks had a decline in delight from the prior year and are now at 64%. Small Business Trailing 4 Quarter Data $100K-<$10MM Q: Overall, how satisfied are you with your company’s primary bank?
  • 6. MZ BIERLY CONSULTING Prospecting Model: The Satisfaction Curve 6 All Relationships go through periods of Satisfaction and Dissatisfaction.
  • 7. MZ BIERLY CONSULTING Prospecting Model: The Satisfaction Curve 7 “RQS” Shoppers make changes in banking relationships at the bottom of the curve. RQS = Relationship, Quality or Service Shoppers
  • 8. MZ BIERLY CONSULTING Large Banks Score 11% or More Below Medium Banks 8 40%41% 29% 22% 29% 24% 0% 10% 20% 30% 40% %Agree Strongly The gap between large and small banks is widest on the attitudes: will stand by us in tough times, effectively meets our credit needs and has competitively priced service charges. $100K-<$10MM 90% Q: Please indicate how strongly you agree or disagree with each statement. My primary bank… 79% 74% 65% 76% 73% 78% 62% 57% 62% 52% 70% 66% 64% 65% 44% 44% 50%53% 51% 47% 54% 50% 60% 70% 80% Small Banks (Assets <$1B) Medium Banks (Assets $1B- $50B) Large Banks (Assets >$50B) +4% +5% +3% 1Q2012-4Q2012 Small Business Rolling 4 Quarter Data = arrows denote change since previous year -6% +6% +5% +5% +5% +9% -5% Is responsive Is easy to do Appreciates Gets things Is financially Effectively Will stand by Has Has to requests or business with our business right the first stable meets credit us in tough competitively competitive questions time needs times priced service charges rates and fees on loans
  • 10. MZ BIERLY CONSULTING  Who is your toughest competition today in the small business market? Why? Quick Question 10
  • 11. MZ BIERLY CONSULTING Big Banks? 11 “We are competing on price. It’s a function of the market. If there is a client we want, we will be competitive on price.” Ergetu Merete, Business Banking Division Manager for Philadelphia Area Business Journal, September 2012
  • 13. MZ BIERLY CONSULTING • Teaneck, N.J.'s Cross River Bank, which holds $199 million in assets, is responding to pressure to gain business customers by going door-to-door, pitching 0 percent loans to dry cleaners, spas, and medical offices in the city. Cross River Bank Chairman and interim CEO Gilles Gade says the program, which has about $1 million to lend initially, is primarily meant to shore up goodwill in the community and net more long-term business customers. The bank has so far written about 20 one-year loans for amounts ranging from $5,000 to $20,000, Gade says. From "N.J. Bank Hits the Streets With Door-to-Door Lending Campaign" American Banker (08/09/12) Idiot or Genius? 13
  • 14. MZ BIERLY CONSULTING Each banker has a Default Value Proposition 1. Low-Price/Low-Structure Provider  “Tell me what you have at your current bank . . . we’ll beat it.” 2. Service  “We’ll be accessible and responsive. You’ll think you’re my only client.” 3. Business Acumen (Business Experience and Expertise)  “I’ll understand your business, help you anticipate your needs, and help you navigate through increasingly complex financial choices. . . better than any other banker.” Values and Value Propositions 14
  • 15. MZ BIERLY CONSULTING This study correlates skills with “Customer Satisfaction” and with the likelihood a Business Owner would refer you to other Business Owners. Data from the Enterprise Council on Small Business Business Owners and Business Acumen 15
  • 16. MZ BIERLY CONSULTING The Key Skills from the Study. Data from the Enterprise Council on Small Business Business Owners and Business Acumen 16
  • 17. MZ BIERLY CONSULTING The Questions that drive results and satisfaction. Data from the Enterprise Council on Small Business Business Owners and Business Acumen 17
  • 18. MZ BIERLY CONSULTING The Key Questions that drive satisfaction. Data from the Enterprise Council on Small Business Business Owners and Business Acumen 18
  • 19. MZ BIERLY CONSULTING Data Courtesy of the Enterprise Council on Small Business Relationship Development Strategies that drive satisfaction. Business Owners and Business Acumen 19
  • 20. MZ BIERLY CONSULTING Level of Relationship is Based on Value Drivers 20  Not all Decision Makers want the same level of relationship with an RM.  Adding Value is based on matching the value driver of a Decision Maker. Value Drivers. . . What the Decision Maker is looking for 5 1 2 3 4
  • 21. MZ BIERLY CONSULTING What Does it Take: Building Relationship Management Skills 21 Reacting to Opportunities Developing New Opportunities Stage 1 Stage 2 Stage 3 Stage 4 Stance:  Waiting for opportunities Stance:  Proactively seeking opportunities part of the time Stance:  Seeking qualified opportunities regularly Stance:  Actively building market share, wallet share and developing opportunities Methods:  Walk-ins  Irregular lead generation  Referrals from a few long-time clients or “well-worn” referral sources  Lead generation is largely reactive  Product-focused client discussions Methods:  Some referrals from clients  Generating leads from any and all businesses  Identifying and building new referral sources  Focuses at Controller or VP Finance Level  Focuses on “financial issues”  Sees role as sole “executor” of relationship Methods:  Focused and proactive lead generation  Effective use of testimonial referral sources  Focuses at “C-Suite” level, builds strategic relationships  Sees role as “strategist”  Effectively uses Bank’s Senior Management to build relationships Methods:  Actively cultivating referral network and systematically using it  Actively working the best clients and prospects  Always seeking new “niche” opportunities  Consistently uses Experience and Expertise as a Value Proposition  Highly effective at adjusting lead sources and a building brand Characteristics:  Infrequent calling  Little planning or structure to relationship management process  Works “whatever is in front of me”  Focuses on credit/product strategy first then “sales” strategy  Value proposition centers around price/structure or “client service” Characteristics:  Meets target level of calls, but little focus or preparation  “I’ll take whatever I can get” orientation  Selling 1 product category at a time, leads with loans  Identification of opportunities often limited to 1-year time frame  Inconsistent results and “cycling” pipeline Characteristics:  Stays focused on targeted lists  Persistent, never gives up  Comfortable at all levels of the C- Suite  A focus on depth of relationship  Consistently identifies opportunities (short-term, mid- term, long-term, explicit and implied)  Consistently generates results Characteristics:  Always aware of new opportunities  Always thinking one year ahead  An articulated plan for consistently developing new opportunities  Long-term, expertise-based relationships Characterized by Product Acumen and Strategizing Transactions
  • 22. MZ BIERLY CONSULTING What Does it Take: Building Relationship Management Skills 22 Reacting to Opportunities Developing New Opportunities Stage 1 Stage 2 Stage 3 Stage 4 Stance:  Waiting for opportunities Stance:  Proactively seeking opportunities part of the time Stance:  Seeking qualified opportunities regularly Stance:  Actively building market share, wallet share and developing opportunities Methods:  Walk-ins  Irregular lead generation  Referrals from a few long-time clients or “well-worn” referral sources  Lead generation is largely reactive  Product-focused client discussions Methods:  Some referrals from clients  Generating leads from any and all businesses  Identifying and building new referral sources  Focuses at Controller or VP Finance Level  Focuses on “financial issues”  Sees role as sole “executor” of relationship Methods:  Focused and proactive lead generation  Effective use of testimonial referral sources  Focuses at “C-Suite” level, builds strategic relationships  Sees role as “strategist”  Effectively uses Bank’s Senior Management to build relationships Methods:  Actively cultivating referral network and systematically using it  Actively working the best clients and prospects  Always seeking new “niche” opportunities  Consistently uses Experience and Expertise as a Value Proposition  Highly effective at adjusting lead sources and a building brand Characteristics:  Infrequent calling  Little planning or structure to relationship management process  Works “whatever is in front of me”  Focuses on credit/product strategy first then “sales” strategy  Value proposition centers around price/structure or “client service” Characteristics:  Meets target level of calls, but little focus or preparation  “I’ll take whatever I can get” orientation  Selling 1 product category at a time, leads with loans  Identification of opportunities often limited to 1-year time frame  Inconsistent results and “cycling” pipeline Characteristics:  Stays focused on targeted lists  Persistent, never gives up  Comfortable at all levels of the C- Suite  A focus on depth of relationship  Consistently identifies opportunities (short-term, mid- term, long-term, explicit and implied)  Consistently generates results Characteristics:  Always aware of new opportunities  Always thinking one year ahead  An articulated plan for consistently developing new opportunities  Long-term, expertise-based relationships Characterized by Business Acumen and Strategizing Relationships
  • 23. MZ BIERLY CONSULTING  What percentage of your Small Business Lenders are in each stage?  What percentage of your Branch Managers are in each stage?  Do your Sales Managers have the coaching skills, tools and techniques to get their teams to the next level? Quick Reality Check 23
  • 24. MZ BIERLY CONSULTING Managing Market and Relationship Strategies 24
  • 25. MZ BIERLY CONSULTING Managing Market and Relationship Strategies 25 Three Sources of Business. . . Three Steps: Identify, Plan, Execute Market Management Process Relationship Building Process Face-to-Face Meeting Process
  • 26. MZ BIERLY CONSULTING Are You Taking Care of Your Customers? 26
  • 27. MZ BIERLY CONSULTING Adding Value Adds Revenue and Adds Loyalty 27 Company Decision Makers DDA/Treasury Management Personal DDA/Private Banking Working Capital, Acquisition Financing Investments Equipment Loans/Leases Jumbo Mortgage Commercial Mortgage HELOC Employee Banking Life Insurance Investments Retirement Planning/Retirement Plan 401(k) Estate Planning Liability Insurance Key Man Insurance, Buy/Sell Agreement Total: 9 Total: 7 Business Services: 20-years, $3,500,000 in sales
  • 28. MZ BIERLY CONSULTING 1Q2011-4Q2011 Total Primary Bank Size Large Banks (Assets >$50B) Medium Banks (Assets $1B- $50B) Small Banks (Assets <$1B) Product Usage at Any Institution Total Products Used 7.2 7.2 6.9 7.3 Cash Management and Deposit Services 4.8 4.7 4.6 4.8 Credit Services 1.2 1.0 1.3 1.6 Other Services 1.2 1.4 1.1 0.9 Penetration Ratio Total Products Used 79% 77% 76% 84% Cash Management and Deposit Services 83% 83% 81% 90% Credit Services 76% 70% 69% 80% Other Services 64% 67% 57% 60% Small Business Rolling 4 Quarter Data Q: Please indicate which of the following products and services your company currently uses at your primary bank and which are used at another bank. 7-3 $100K-<$10MM Primary Bank has over 75% of Products Used 28
  • 29. MZ BIERLY CONSULTING The Market Management Model: It Starts with Leads 29 Lead Generation Qualifying Proposal Internal Sale External Sale Closed Transaction Build Long- Term Relationship Closed Business Out Opportunities In
  • 30. MZ BIERLY CONSULTING The Market Management Model 30 Lead Generation Qualifying Proposal Internal Sale External Sale Closed Transaction Build Long- Term Relationship Comes out the bottom. What went in the top… To change the quantity or quality of what comes out the bottom. . . Change what goes in the top.
  • 31. MZ BIERLY CONSULTING 1. A Relationship Development Meeting is a face-to-face meeting that focuses on two things:  Identifying and developing the Business Owner’s tangible needs and intangible needs.  Matching your solutions to the developed and agreed-upon needs. 2. A Marketing Call (or Marketing Touch) is an interaction that keeps the bank or banker “top-of-mind” with the client/prospect.  An “overview” of Business Owner’s possible needs.  An overview of “what we do”.  “If we can help. . . Let me know.” Relationship Development Meetings vs. Marketing Calls 31
  • 32. MZ BIERLY CONSULTING  What percentage of your team’s calls are Marketing Calls?  What do you have to do to increase the percentage of Relationship Development Calls? Reality Check 32
  • 33. MZ BIERLY CONSULTING Demonstrating Business Acumen doesn’t happen in 1 or even 2 Meetings. Building these Relationships require a series of Relationship Management Meetings that build momentum. . . and loyalty. And, requires the interpersonal and communication skills to “connect the dots” during the business conversation. . . the connected dots that build clearly defined next steps in advancing relationship. Changing the Conversation to “Business Acumen” 33 Each Relationship Management Meeting is a Structured Communication Process
  • 34. MZ BIERLY CONSULTING Changing the Conversation to “Business Acumen” 34 Step 2 is the most important step for aligning with the Key Decision Maker’s Business Strategy, Business Plan, Business Objectives, Business Operations and Business Management Processes. 2
  • 35. MZ BIERLY CONSULTING Changing the Conversation to “Business Acumen” 35 1. Where are you banking? 2. What products are you using? 3. How are they priced and structured? 4. What 2 things do you wish your bank was doing but they’re not? 5. Can I have a copy of your statements to put together an offer of how we would handle your relationship? Where are the Business Issues here? These questions focus on products; comparing your products with a competitor’s. These questions demonstrate product acumen!! Look at these Questions. . . 2
  • 36. MZ BIERLY CONSULTING Changing the Conversation to “Business Acumen” 36 These questions align with a Key Decision Maker’s Business Plan, Business Strategy, Business Objectives, Business Operations and Business Management Processes. These questions demonstrate Business Acumen!! Use this Question Set to Demonstrate Business Acumen and Build Relationship Momentum 2
  • 37. MZ BIERLY CONSULTING 1. Keys to success affect current and future decisions. 3. Industry trends, business changes in next 3 years. 2. Industry trends affecting the business today. 4. Current and future changes force changes in current and future business operations. 5. Current and future changes in business operations force changes in current and future financial operations. 6. Changing financial operations create changes in the financial needs and then an evaluation of the solutions currently in place. “Think Like the Business Owner” 37
  • 38. MZ BIERLY CONSULTING BUILD A TARGET PROFILE Key Initiative #1 38
  • 39. MZ BIERLY CONSULTING High Appeal Industries Limited Appeal Industries  Manufacturers  Real Estate Investment  Wholesalers  Low-End Retail  Distributors  Restaurants  Architect, Engineering and Business Service Firms  Mini-Warehouses/Carwashes  Law Practices  Landscaping  Accounting Firms  Service or Gas Stations  Insurance Brokers or Firms  Used Car Dealerships  Large General Contractors  Medical, Dental and Health Practices Define Your Core Relationship Profile 39
  • 40. MZ BIERLY CONSULTING Business Characteristics  In business over 3 years  Sales revenue between $500,000 and $2,500,000  Employing more than 5 people  Location within footprint  Privately held with experienced management team  Borrowing needs under $500,000  Profitable (Net Profit After Tax) for the last year  Leverage (Debt-to-Worth) less than 3 to 1  Deposit balances average more than $25,000  Using or needing 5 or more business banking/consumer banking product categories Define Your Core Relationship Profile 40
  • 41. MZ BIERLY CONSULTING Retention Relationships are clients who meet these criteria:  Have good credit quality, and are  In top 10% of aggregate loans and deposit balances,  Your Bank has >60% of the loans and deposits of the business. Expansion Relationships are clients who meet these criteria:  Have good credit quality and match the Core Relationship Profile, and are  Your Bank has less than <60% of the loans and deposits of the business, and have  Significant cross-sell/up-sell opportunities in next 18 months. Segment Your Business Customer Relationships 41
  • 42. MZ BIERLY CONSULTING  Define the annual activity for Retention, Expansion and Prospect Relationships.  Target 5 calls per week [60% of the calls to be proactive].  Target the right mix of pre-scheduled appointments: • % with Retention, Expansion and Acquisition Relationships • % of joint calls • % of calls with referral sources or others in network Be Clear About Call Activity/Call Mix 42
  • 43. MZ BIERLY CONSULTING STRENGTHEN EXPANSION RELATIONSHIPS Key Initiative #2 43
  • 44. MZ BIERLY CONSULTING Relationship Expansion Process Initiatives 44 These are the 7 Elements in that drive a Relationship Expansion Process. These are the process elements that drive Banker Success in the building a Brand. . . and is the result of consistent execution.
  • 45. MZ BIERLY CONSULTING Expansion Relationships 45 Determine possible opportunities. Use a Relationship Profiling Model to Identify and Follow-up on opportunities to strengthen Expansion Relationships.
  • 46. MZ BIERLY CONSULTING  Build a Client Folder with: • Industry Trends and Data (VerticaIQ/First Research/eMentor/IBISWorld) • Trade association data on the industry • The company’s web site • News articles on the Business and Business Owner • Bank-specific information about the industry (e.g. Sample call plan templates, case studies, product brochures, etc.) Identify the Opportunities for Expansion 46
  • 47. MZ BIERLY CONSULTING ACQUIRE NEW RELATIONSHIPS Key Initiative #3 47
  • 48. MZ BIERLY CONSULTING  Overemphasizing prospecting. . . “Don’t forget your Key and High Potential Clients.”  Not providing direction on which prospects to target. . . “Build a list of the prospects you want to do business with.”  Not coaching bankers on how to leverage their network (and that includes senior management, directors, etc.). . . “Use client referrals and testimonials to get appointments.”  Not having a process for generating leads. . . “Coach the top of the funnel.”  The Super-Rep Syndrome. . . “Teach them all to fish.”  Not understanding your bankers’ default value propositions . . . “Coach to the value proposition that you believe in.”  Defining success too narrowly. . . “Celebrate the small victories.” 7 Mistakes Sales Leaders Make 48
  • 49. MZ BIERLY CONSULTING  Not having a “Vetted” Prospect List. . . “Build a list of the Businesses you want to do business with.”  Not using their network. . . “Using client referrals and testimonials to get appointments.”  Not having a defined strategy. . . “Building relationships based on Value Added.”  Planning one meeting at a time. . . “Always plan 2 calls at a time, gin up the interest in the next meeting before you leave their office.”  Not preparing “cognitively”. . . “Being prepared is a huge differentiator and adds value.”  Using the wrong question set. . . “Use questions that add value.”  Selling to the first need. . . “It takes multiple needs to build enough momentum to overcome inertia.” 7 Mistakes Bankers Make in Prospecting 49
  • 50. MZ BIERLY CONSULTING 6 Steps for Building New Relationships 50 1. Build a Vetted Prospect List 2. Select the first 5 Prospects you want to focus on 3. Build a Relationship Strategy, Plan the first 3 Meetings for the selected Prospects 4. Use a Testimonial Referral to Get the 1st Appointment 5. Debrief the 1st Meeting, adjust the Plan for the 2nd and 3rd Meeting. Keep a focus on what is changing (not “optimized”) 6. Deliver 1 or more “Optimized Solutions” in the 3rd Meeting
  • 51. MZ BIERLY CONSULTING  “It's Marketing's job to provide us leads.”  “Get me a better list.” • A list of businesses that want to change banks now! • “The list isn’t perfect. . . there are dead people on here!”  Focus on former customers from “my old bank”.  Each Banker builds his own prospect list. • Not sharing it with other team members for feedback.  Rely on a single source for prospect names.  “I have an amazing mind, I can keep it all in my head.” Bad “Best Practices” for Building Prospect Lists 51
  • 52. MZ BIERLY CONSULTING What is a “Vetted” Prospect List? 52
  • 53. MZ BIERLY CONSULTING  D&B Strategic Marketing Database or Zapdata.com (Hoovers Lead Builder)  ReferenceUSA  Local Industrial Development Authority (electronic version)  UCC Filings (there are compilation services)  Local Business Publication directories (not always a good choice, too visible)  Guidestar.org (a great source for 501C3s)  Trade Association Memberships or Websites (a few examples) • American Society of Association Executives (www.asaenet.org/find/) • American Dental Association directory (www.ada.org) • American Institute of Architects directory (www.AIA.org) • State and local trade association listings Use Multiple Sources for Your Prospect List 53
  • 54. MZ BIERLY CONSULTING Recent studies in the banking industry show that Business Owners are more than willing to help you. . .  66% of Business Owners are willing to provide referrals to Bankers. But to get the referral you will have to ask; most Bankers don’t ask.  Only 22% of small-to-medium-size Business Owners have been asked for a referral in the past 24 months.  Only 37% of Middle Market Decision Makers have been asked for a referral in the past 24 months. Is a Consistent Flow of Referrals a Possibility? 54
  • 55. MZ BIERLY CONSULTING Small Banks’ Ratings on Willingness to Refer Have Improved, While Medium Bank’s Ratings Declined 55 67% 66% 68% 72% 71%71% 63% 70% 47% 60% 56% 59% 64% 61% 63% 57% 43% 40% 41% 41% 41% 40% 35% 36% 75% 70% 65% 60% 55% 50% 45% 40% 35% 30% 2005 2006 2007 2008 2009 2010 2011 2012 Note: Bank trending data is representative of bank organization in 4Q2012. Small Business Trailing 4 Quarter Data %Agree Strongly Small Banks (Assets <$1B) Medium Banks (Assets $1B- $50B) Large Banks (Assets >$50B) Small banks have improved on willingness to refer and are currently at 70% agree strongly, while medium banks dropped to 57%. $100K-<$10MM Q: Please indicate how strongly you agree or disagree with each statement. I would refer a company with similar needs to my primary bank.
  • 56. MZ BIERLY CONSULTING Why do Business Owners provide referrals?  They may like to help other business people.  They may want to be “heroes” to their friends and business partners.  They understand that it’s the best way to grow business for them and for you.  They may see referrals as a way to “pay you back”. The Whys of Referrals 56
  • 57. MZ BIERLY CONSULTING Why don’t Bankers ask for referrals?  The quality of referrals isn’t always the best.  They don’t want to “harass” good clients.  They’re not sure whom to ask; they’re not sure when to ask.  They don’t have a process for asking! The Whys of Referrals 57
  • 58. MZ BIERLY CONSULTING Why don’t Bankers ask for referrals?  The quality of referrals isn’t always the best.  They don’t want to “harass” good clients.  They’re not sure whom to ask; they’re not sure when to ask.  They don’t have a process for asking! http://www.mzbierlyconsulting.com/how-to-ask-customers-for-quality- referrals The Whys of Referrals 58
  • 59. MZ BIERLY CONSULTING 1. Wait and See: “If I continually provide outstanding service. . . when they hear of an opportunity they’ll give me a call.” 2. Let them know I’d like a referral: “Jack, if you think of anyone who would be a good a match for me and the Bank I’d love to talk with them. Let me know if you think of anyone.” 3. Proactively ask for an Introduction: “Jack, there are a several people in the area I’m trying to meet. I was hoping I could run their names by you. . .” Asking for Referrals There are multiple ways to build a Network Referral Process. . . but one works better than the others. Here are the three most prevalent: 59
  • 60. MZ BIERLY CONSULTING  Industry information  Financial information  Website  Call planning templates  Simplified relationship plans  Cash cycle maps  LinkedIn Use tools that make you look good 60
  • 61. MZ BIERLY CONSULTING These are your Meeting Objectives for the Business Operations Meeting: 1. Demonstrate your knowledge and understanding of some of the key issues in the industry sector of the business. 2. Understand the keys to success used to build the business. 3. Understand the current [1-year] business objectives of the business. 4. Understand the future [3-year] business objectives. 5. Understand the day-to-day business operations of the business. 6. Understand how his business objectives and business operations will change over the next year, the next 3 years. 7. Identify three needs, short-term, mid-term or long-term; summarize and then prioritize the needs; use the top prioritized need to get the next appointment. 8. As a part of the next meeting, frame a Financial Operations Discussion (with key parties) to review the current cash-cycle and potentially to offer ideas for optimizing collections, disbursements and working capital management. First Call Objectives — Use a Template 61
  • 62. MZ BIERLY CONSULTING Call Plan Templates 62
  • 63. MZ BIERLY CONSULTING COACHING THE SMALL BUSINESS INITIATIVE Key Initiative #4 63
  • 64. MZ BIERLY CONSULTING Reacting to Opportunities Developing New Opportunities Stage 1 Stage 2 Stage 3 Stage 4 Stance:  Waiting for opportunities to come in Stance:  Proactively seeking opportunities part of the time Stance:  Seeking qualified opportunities regularly Stance:  Actively building market share, wallet share and developing opportunities Methods:  Walk-ins  Irregular lead generation  Referrals from a few long-time customers or “well-worn” referral sources  Lead generation is largely reactive  Product-focused client discussions Methods:  Some referrals from customers  Generating leads from any and all businesses  Identifying and building new referral sources  Focuses at the Business/Office Manager Level  Focuses primarily on product issues Methods:  Focused and proactive lead generation  Effective use of testimonial referral sources  Focuses at Business Owner level, builds Level 3 or 4 relationships  Has effective Market and Relationship Strategies  Effectively uses Business Partners to build relationships Methods:  Actively building a referral network and effectively using it  Actively working the best clients and prospects  Actively building niches  Consistently uses Business Acumen as a Value Proposition  Highly effective at adjusting lead sources and building a brand Characteristics:  Infrequent calling, little planning or structure to calling effort  Works “whatever is in front of me” focus  Focuses on credit/product strategy first then “sales” strategy  Value proposition centers around price/structure or “customer service” Characteristics:  Meets target level of calls, but little focus or preparation  “I’ll take whatever I can get” orientation  Selling 1 product category at a time, leads “scorecard” product  Identification of opportunities limited to 1-year time frame  inconsistent results and “cycling” pipeline Characteristics:  Stays focused on targeted lists  Persistent, never gives up  A focus on depth of relationship  Completely comfortable with Business Operations and Financial Operations Conversations  Consistently identifies opportunities (short-term, mid-term, long-term)  Consistently generates results Characteristics:  Always aware of new opportunities  Always thinking one year ahead  An articulated plan for consistently developing new opportunities  Long-term, expertise-based relationships Direction: Build the Activity Guidance: Build the Quality Support: Remove the Barriers Coaching the Stages. . . Bi-Weekly 64
  • 65. MZ BIERLY CONSULTING The “End State” of Stage 1 is learning to Connect with the Business Owner. The Banker is ready for Stage 2 Coaching when she consistently demonstrates these skills:  Comfortable on the Business Owner’s “turf”.  Confident talking about business operations [not just products] with the Business Owner.  Convinced he has “something of value” [beyond just products].  Assertive enough to “lead” the meeting with the Business Owner. These skills typically require 75 to 125 calls to learn—for more insights go to: http://www.mzbierlyconsulting.com/small-business-strategy-coaching-branch- managers Coaching Stage 1 (to Stage 2) 65
  • 66. MZ BIERLY CONSULTING  Keep the Banker Targeted. Build and “Vet” a list of 35 to 50 Businesses (the Targeted Business List). Use these lists to build the Targeted Business List: the Banker’s current Retention, Expansion and Other Lists.  Begin to “encourage” planning. Ask the Banker to build a Client Folder for each Relationship before contacting the Business Owner [they probably won’t, it’s OK for now].  Ask the Banker to review the Client Folder and to use one of the Quick Reference Guides for each call [they probably won’t, it’s OK for now]. Coaching Stage 1 (to Stage 2) 66
  • 67. MZ BIERLY CONSULTING In each bi-weekly coaching session, debrief 2 or 3 meetings the Banker had in the last 2 weeks. Debrief the meetings by asking all of these questions, in this sequence:  “How did the meeting go?”  “Did you find any opportunities during the meeting?”  “What did you learn about the industry that this business operates in?”  “What did you learn about the Business Owner’s business objectives today, over the next year, over the next 3 years?”  “What did you learn about the day-to-day business operations of this business?”  “What did you learn about the Business Owner and what he/she “values”?  “How did the Business Owner describe the value proposition he uses in his business?” Coaching Stage 1 (to Stage 2) 67
  • 68. MZ BIERLY CONSULTING  Re-Establish the “Priorities” every Monday Morning.  Use Monday Morning Sales Meetings to continually re-establish the priority of “meeting with” and “learning about” the targeted businesses.  A conference call is OK.  The Small Business segment of your sales meeting should not exceed 30 minutes.  The “accountability” topics for Stage 1 Team Members are these. Ask each Stage 1 Team Member 2 of these 3 questions (ask the Stage 2 Team Members their questions, not these): • “What targeted businesses are you calling on this week?” • “Pick 1 targeted business you met with last week, what did you learn about the business and its operations?” • “Are you finding any opportunities in your meetings with the businesses on your targeted lists?” Coaching Stage 1 (to Stage 2) 68
  • 70. MZ BIERLY CONSULTING “When all is said and done, more is said than done.” Lou Holtz 70
  • 71. MZ BIERLY CONSULTING Visit Our Website 71 After the conference take a few minutes to explore our website. . . And register for our email newsletters and blog. Each month you’ll get suggestions, tips, and how-to’s to fine-tune your sales and sales leadership processes. Find out about our archived webinars on sales and sales leadership topics. To find out more about our resources for small business banking teams go to www.mzbierlyconsulting.com or call Ned Miller at (610) 296-4772 or email him at nmiller@mzbierlyconsulting.com Bonus offer: Article on “How to Improve the ROI on Training Branch Managers” at http://www.mzbierlyconsulting.com/a-winning- strategy/