I get a kick out of watching Mad Men. There’s something captivating about being transported to another time like that.

Slightly less fun is the feeling I get when I see banks in the real world and the present day throwing money away on traditional advertising like it’s 1965.

You know the game. You go to an ad agency. They come up with a slogan. You run it. Nothing happens. They say, “Just wait; it takes time.” And you wait…and wait…and wait…

It’s enough to make you a mad man (or woman) in a whole new way. And it’s gonna take a lot of three-martini lunches before you forget THAT waste of time and money.

Instead of throwing good dollars at what worked in the Johnson administration, understand where your best return on investment comes from and focus your advertising dollars there. Regardless of your firm’s size or specialty, you have three main funnels for marketing leads: advertising, customer and center of influence referrals, and employee ambassadorships.

Unfortunately, most CEOs spend up to 70 percent of their marketing funds on advertising—the area with the lowest return of the three—while spending very little on their existing customers and virtually nothing on teaching their employees to be ambassadors and penetrate accounts.

To correct this disparity, start by slashing your advertising budget drastically. While many ad agencies are capable of creating flashy and beautiful ads, they have little understanding of how to boost your sales. As a result, the campaigns do a great job of stroking egos, yet little to sell financial services. If ego were the only thing that mattered, then by all means continue. However, if the bottom line is the real issue, then now is when you need to redirect those dollars.

To make matters worse, many CEOs claim that the intent of their ad campaign is to build a brand. Good intention! Unfortunately, it’s almost always horribly executed. When asked, “What is the brand for your bank?” almost every CEO will respond, “Customer service!” What they don’t understand is that customer service is NOT a brand. It’s a mandatory element. It has nothing to do with brand, as Al Ries so aptly points out in The 22 Immutable Laws of Branding.

Smart marketers clarify their story and invest marketing efforts toward existing clients and employees. The result is increased sales and referrals where the return is higher and the results are quicker.

Suddenly you’re not so mad anymore.

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Have you thought about the future leadership of your bank? With current bank executives averaging over 55 years of age, succession issues will be the biggest tsunami to hit community banks starting in just a few years.

In fact, a recent survey across all industries showed that leadership succession planning, or the lack thereof, was the most pressing area of concern among CEOs.

Almost every executive on almost every exec team I work with in the banking industry is over 55, and many of those are over 60. These are usually very capable folks doing a great job running the bank of the present. But it’s hard to argue any of them are being groomed to run the bank of the future.

That’s an enormous shoe that is destined to drop—and you need to be sure your bank isn’t under it when it does. It’s a disaster in the making.

Smart bankers understand that NOW is the time to get a succession plan in place for your younger executives. But even those banks that have a plan in place often have an inadequate one—one that focuses on the nuts and bolts of management and strategy but overlooks the real wisdom that ensures a bank’s long-term success.

Smart bankers understand that NOW is the time to get a succession plan in place for your younger executives. But even those banks that have a plan in place often have an inadequate one—one that focuses on the nuts and bolts of management and strategy but overlooks the real wisdom that ensures a bank’s long-term success.

For example, do they have the tools in their tool kits to make the strategy happen? Here’s just one skill that I witness is missing—the ability to execute to make the strategy happen.

One of the more important elements is getting your future leaders to eat, sleep, and breathe Jack Zenger’s legendary Implementation Formula:

I = M x A x V x F

or

Implementation Success= Motivation x Accountability x Visibility x Follow-Through

For every rollout of every initiative, every leader must be certain that each of these elements is present and strong—a 5 out of 5. How will you Motivate your people during the rollout? How will you ensure Accountability to the goals? How Visible is the relevant information for the initiative? And how will you Follow Through at every step to make sure it isn’t another “this too shall pass” initiative? If any of these four is weak or God forbid MISSING, it’s a problem.

Don’t believe me? Turn any one of those four variables into a zero in the equation above and see what it does to your implementation.

So as you’re building your plan for passing the torch, don’t forget to include the field-tested wisdom that will keep the flame burning for many years to come.

In your service,

Roxanne Emmerich
President and CEO

Improving the commercial loan portfolio means bringing in high-quality business customers who are in growth mode or who have some other financing needs—while minding the good loans that you already have. It’s just that simple. But, unfortunately, many banks (perhaps yours) are dead wrong with their strategy for bringing in commercial loans.

Have you ever had a day where you left exhausted, but felt like you didn’t do any of the things “on your list”? Unfortunately, some people have entire careers like that.

The problem…they don’t understand “behavioral economics.”

The point is, if you are wasting time working with 50 different prospects…

15 you can’t work with because they are not creditworthy, 25 who aren’t ready to decide and can’t be moved to decide, 8 who will only move ahead IF you match rates…that leaves only 2 who are really worth spending any time on.

Instead of having your commercial lenders playing out that scenario every month, what if you had them spending 90 percent of their prospecting time on those 2 to 5 deals every month?

Instead of tripling your workforce, you work with fewer and see them accomplishing more.

To get there, some things have to shift.

Here are the five golden keys to unlocking a profit-rich commercial loan strategy:

FIRST, learn to identify the psychographics of your next most profitable and safest A-plus credits, pinpoint who they are, and create a relationship whereby they see you as a source of wisdom and service beyond the ordinary. That reputational equity needs to be established before the first call, or you put yourself into the position of “vendor.”

SECOND, help your people learn how to quickly disqualify prospects that are not credit-worthy, unwilling to pay premium pricing, or are difficult to work with. That disqualification has to happen as close to “hello” as possible. Also imperative is learning to disqualify in a way that doesn’t decrease your reputational equity as a brand.

THIRD, lenders need to make sure they have a sales and marketing skillset whereby they know how to get clients to see the financial impact of switching—and they can build the client’s desire to take advantage of that impact quickly.

FOURTH, they have to learn how to spend every moment with the right people…prospects who are extreme quality and who are willing to pay premium pricing. There’s no time in a high performer’s day to be spending with prospects who can’t or won’t do business with you on your terms.

FIFTH, you need a commercial team with the emotional-intelligence scores of hunters. These are lenders who can balance the needs of the client and the needs of your bank—thus creating a premium-priced relationship where the client understands the economic value far beyond the premium paid.

Producing these five results requires an ironclad system that is research-based and followed with impeccability.

No doubt about it—this is work. HARD work. But it’s much easier work than cleaning up your portfolio years from now after realizing that you could have avoided today’s problem loans that weren’t A-plus credits to begin with —IF you had spent your time training your people to follow this system.

In your service,

Roxanne Emmerich
President and CEO

Let’s start with the first four:

1. Keeping Employees Who Have Quit—But Still Come to Work

A massive study by the Corporate Executive Board of 50,000 employees proves that employees who are “true believers”—who value, enjoy, and believe in what they do—displayed 57 percent more discretionary effort and were 87 percent less likely to pull up stakes. Even a number-crunching, poker-faced CFO can analyze the numbers on this one and discover that he or she needs to have a personality infusion and learn how to engage people.

With the cost of replacing an employee estimated between five and nine months of their yearly salary, low-performing organizations need to take heed that workers in the “just doing my job” mindset are four times more likely to leave.

Low-performing banks give lip service to their misinformed beliefs on what creates higher employee performance—higher pay or benefits. High-performing companies, who incidentally attract nine times more “true believers,” know that employee engagement comes from letting employees feel they are valued and necessary, and that the bank has a “cause” and purpose—far beyond profits.

Do you have a vision that inspires people to greatness and a system to constantly upgrade the culture of your organization?

2. Clueless “Sales Culture” Approach—Worse Yet…
They Don’t Know It Is

How do you keep from chuckling when you hear yet another banker say some outrageously misinformed statement like, “Sure, we have a sales culture. We set goals and have incentives.” What separates the men from the boys is whether the “sales culture” effort goes way beyond goals and incentives to optimal use of sales funnels, measurement of frequencies and competencies that are predictive of future revenues, understanding of what are the optimal high-impact activities to do in a sales meeting, and at least 20 other key items.

Facts be known, goals and incentives are minimally significant efforts in creating profit-rich sales growth in comparison to having an integrated approach of systems and skill sets.

Are you content with less than five products per household—or will you be sideswiped by a competitor who isn’t?

3. Giving Away the Farm…One Commercial Loan at a Time

There aren’t many commercial lenders who think they need help with their sales skills, yet the vast majority of them consistently price their loans to cut bank margins, accept minimal fee income, and negotiate to match other banks—even after they already have a deal—because they didn’t know how to keep the customer from taking that step after a deal has been agreed upon.

Lenders think they are good sales people because they compare themselves to retail bankers who don’t make calls. Yes, in comparison, they probably are better sales people. That said, what other industry has sales people who know so little about the proper approaches to optimize sales at higher margins?

You’ll be hard pressed to find an industry that rivals banking for the complete absence of sales skill.

Do your lenders have a “rollover” approach to pricing?

4. Dysfunction in the Ranks

A Band-Aid applied to an infected wound does precisely zilch. The same is true of “sales training,” new software, and other strategic attempts to improve an organization if they are applied on top of the dysfunctional behaviors allowed within the organization.

The solution for breakthrough to a higher level of performance ALWAYS lies solidly in changing the mindsets and skill sets of those on the leadership team—how they work together and what they allow and disallow from their people.

Whether it’s the passive-aggressive personality who doesn’t take a stand for what he or she believes but goes on to sabotage the commitment of the department, to people talking behind others’ backs, to “whiners”—your leadership team MUST develop the skills to disallow dysfunctional behaviors. Then engage people to apply new and better habits, mindsets, and behaviors to replace all the freed time that becomes available when dysfunctional behaviors are not allowed.

Do you allow ANY dysfunctional behaviors, or have you identified them and enforce their elimination impeccably?

5. Wrong People on the Bus—and Too Many in the Wrong Seat

NOTHING is more predictive of job performance than emotional intelligence—not past job performance, not personality, not even IQ.

Most low-performing banks do not undertake emotional intelligence testing prior to hiring or with their current teams. If they do any testing at all, they do “personality testing” or “self-evaluation” testing that either have a low correlation to future job performance or can be manipulated by employees with an IQ over 12 to give the answers they think you want to hear.

If you’re tired of the “school of hard knocks” hiring approach, consider an emotional intelligence assessment tool we’ve discovered that takes only 10 minutes on the Internet and and investment of less than an hour or two of payroll time if you choose to hire the person. This tool has been benchmarked to show that those who are identified as “low risk” have a 90 percent probability of being with your firm one year after hiring while those identified as “high risk” have a 10 percent chance of being with you one year out.

A Texas bank that benchmarked all employees using this tool found it reduced employee count by 30 percent within one year while increasing performance and growth of the bank. By getting the right people on the bus and moving their seats so their emotional intelligence matches the benchmark of the position they fill, you can reduce the highest expense on your P&L—payroll—while dramatically increasing each person’s performance. Intrigued? Drop us a note and we’ll tell you more!

6. Wasteful Use of Resources—’Cuz We’ve Always Done It That Way

Just because it has always been done that way doesn’t make it worth doing anymore.

Advertising is a perfect example. Low-performing banks spend their marketing budgets on advertising. Worse still, they spend it on the worst possible types of advertising—image and rates.

High-performing banks know that advertising hits too wide a swath and that they really need to market to the niches and to the current customers who will bring the most opportunity to the institution. Most high-performing banks spend less than 10 percent of their marketing budget on media “advertising” and instead reallocate those resources to high-impact, low-cost marketing approaches such as training and incenting their employees and marketing to current customers, high-profit prospects, and high-potential customers.

Have you reallocated your marketing dollars away from advertising to profit-rich marketing strategies that cost little?

7. Fluffy Thinking—Not Understanding ROI and How to Get There

You can be sure that there isn’t a board member alive who would encourage a bank employee or manager to miss a high ROI opportunity because the investment monies weren’t in the budget. Yet that excuse is given every day as leaders pass over high ROI opportunities—leveraging your people by sending them to an educational event that pays for itself in one month or less, gifts to your top 100 client list that will make those clients want to do more business, and many others.

“It’s not in the budget” is the thinking of low performers. High performers always ask, “How long will it take to get our return on this investment?”

“Critical-thinking skills” is the other area of breaking through fluffy thinking. High-performing banks are exacting in their diagnosis and process to resolve their issues.

Low-performing bank leadership teams say fluffy things like, “We have a problem with communication.” High-performers say, “We need to improve the way we disseminate our strategic initiatives and keep people apprised of the process by setting up both a weekly posting to our Intranet and an occasional game quiz with prizes to make sure people are reading the information and remembering it.”

Specific linear thinking always wins out over “fluff” and “not-in-the budget” thinking.

Most banks, if truly honest, know that they have at least some symptoms of these seven dysfunctions. Recognition is the first crucial step in learning and breakthrough. Action to rectify is the second!

Sit down now, put on your total honesty hat, and think hard about whether ANY of these four performance killers are happening in your bank.

In your service,
Roxanne Emmerich

P.S. Our Profit Growth Banking™ event is right around the corner… will I see you there?

Date: May 22-23, 2012

Location: Dallas, Texas

Profit-Growth Banking Summit™ is a hands-on marketing, culture and sales management “boot camp”dedicated to giving you REAL strategies that are immediately actionable and eminently productive. It gets you focused on growing profits, performance and high-margin sales. And it’s tailored to deliver exactly what smart banks need to do to achieve record years during challenging times.

Click here for details on the Profit-Growth Banking Summit or call our office at (952) 820-0360.

Redding Bank Of Commerce celebrating their success

Try this as a 30-Day Turnaround:

Why is it that a $450 million bank with nine years of flat organic growth suddenly had an annualized growth rate of 35 percent within 30 days of one culture intervention?

Why is it that a $920 million bank consistently ranked in the fourth quartile—a fact which they blamed on their low-income, shrinking market—eventually moved into the first quartile after experiencing over 20 percent growth, seeing significant quality improvement, and tripling ROE… all within three years with no improvement to their market?

Previously, both of these banks had done sales training for years with virtually NO impact on growth or profits.

Then, they got it.

“It” is the understanding of what makes a sales culture work. But what didn’t they “get” before these extraordinary results in growth and performance?

1. Marketing is not a department

Marketing is a mindset, and everyone must understand it. But most banks think marketing is advertising, so they waste resources buying cutesy slogan ads that have minimal ROI. They do “marketing studies” that tell them little about the psychographics of their most profitable customers. They do “brand advertising”—the biggest waste of resources of all. Marketing is NOT advertising. It’s a mindset to be owned by all.

Every person at your bank should know your target markets, know how to communicate to target prospects in those markets why your bank is perfect for them, and clearly understand the unique selling proposition for each market that positions you for premium pricing.

If you don’t instill this mindset in your people, sales training is a waste, and you will always be dragged down to the pricing of your most desperate competitor.

2. Employee buy-in is the cornerstone

Until you engage employees’ hearts, you have no chance of a powerful or sustainable breakthrough. Research by the Corporate Executive Board shows that those employees who are “true believers” —who value, enjoy, and believe in what they do—displayed 57 percent more discretionary effort and were 87 percent less likely to leave a job.

Until your people are called to a higher purpose, nothing great will happen. And making a higher ROA is NOT a higher purpose.

A vision of extraordinary impact enrolls hearts and minds. Your people must believe they are called to be “on a mission.” When an employee feels like what they do matters and that you’re noticing the progress they’re making toward that vision, turnaround is rapid and profound.

3. Make small steps with extreme focus, sense of urgency, “no-wiggle” accountability and wild celebration

Bankers have to learn the basics of organizational development. They must understand that all initiatives must be broken down to the point where people learn to crawl with impeccable grace before they walk, and only begin to run when the walking is perfect. Sales is the running. Service is the crawling and walking. Service must be broken down and perfected.

Simply stated, it is a waste of resources to do sales training until you have shored up all the leaks in your customer-service execution. Managers don’t know how to build the confidence of their people and help them understand that they CAN do anything. That base of success makes it much easier for them to learn.

4. Change your bank’s order-taking culture by establishing a breakthrough system

All banks have a system for balancing drawers. They also have a system for processing loans. However, these same banks—who have been talking about sales culture for years—still have virtually no sales system. Yet they can’t understand why their cross-sales ratios are at 1.2 or why 80 percent of their rate inquiries go on to do business with a competitor.

Do you really think your drawers would balance if you hadn’t created and followed a system? Unless your bank has a sales system based on proven practices that work, you really have no hope of improving sales results. Without a step-by-step system for each department within the bank on how to handle inquiries and referrals, even your best intentions can’t move you beyond order taking.

5. Ban dysfunctional behavior

If you build a house on a foundation with cracks, it’s a problem. Think of dysfunctional behaviors as cracks in your foundation. Unfortunately, the level of dysfunctional behavior is huge in many companies, and those behaviors are accepted as the norm.

They only exist because you allow them.

People start operating at their peak when they’re in a safe work environment. Help create that by getting everyone to agree that, as an organization, you won’t tolerate behavior such as whining, victimhood, excuses and stories, gossip, and other chaotic behaviors that undermine—and destroy—the safety of the workplace. Train employees so they know what to do when they see those behaviors, no matter the position of the violator.

When a “problem” employee is identified and coached on improving their behavior, it is imperative that you expect resolution or departure. Eighty-seven percent of employees say that working with a low-performer has decreased their productivity, hampered their development, and made them want to, at some point, leave that job. Ninety-six percent of employees say they would be thrilled if their company more aggressively managed low-performers.

Protect the psyche of your people; high performers leave when dysfunctional behavior is allowed.

In your service,

Roxanne Emmerich
President and CEO

Let’s face facts. You know it is true. Banks stink at sales culture.

Most say they’re working on it…but most have been “working on it” for three decades now and they still stink at it. Why? Because you are repeating the mistakes of the past. Here are 5 biggest mistakes that are common to every failed bank sales culture. (That would be around 99 percent of them.)

Myth number 1: Officer call programs are the answer

Not only are they not the answer, they are often the problem.

Think about it. You have lenders rushing up and down the street, not knowing who to call on, not knowing what to say to control the sales process to get the relationship at get premium pricing.

Then they bring the deals (most of which you should never touch) into the credit committee, and you have the “we can do the deal if we match the rate” conversation.

It gets worse. Then they’re so busy cleaning up the bad loans they talked you into that you have to hire more people to hit the streets, repeating that same exact pattern. Soon your efficiency ratio is slammed and your bad loans are keeping you up at night. Now they are begging for more “help,” which ultimately means there will be more people creating this pattern of craziness.

Before long, you’re in the bottom half of your peer group in profitability, and you’re flooded in bad loans. And you’re scapegoating it all with an excuse of “the economy.”

Pardon my abruptness, but it’s NOT the economy. If it was, why are hundreds of your competitors having record profitability and decreased delinquency?

You don’t need a calling program. You need a targeted calling integrated system focused on the 100 to 200 safest and most profitable next prospects assuring you get all of them and all of their business — and you get it at premium pricing.

Myth number 2: Measure number of calls made per officer

Again, you get what you measure. When you measure numbers of calls, you get activity but not the RIGHT activities — and certainly not the right results.

What if instead you measured the number of aces received on top 100 prospects, the cross sales to existing top 100 customers, the aces received on top 1000 prospects…to mention a few? NOW we’re talking!

Myth number 3: Cold calling is good

The minute a banker cold calls, they immediately lose reputational equity. They are now positioned as a vendor and are treated as such. Canceled appointments. Negotiations to match the rates of your competitors. Asking you to put together a package for them where you bring your creativity and do all the work, then they have the incumbent bank match it so THEY get paid for YOUR work. You know the scene.

What that means is that if you have the best rates, you can have the deal. Perfect. A guarantee of failure no matter the result. That dog don’t hunt.

The name of the game is reputational equity. Building a relationship of being a sought-out expert is what you want. Establishing credibility to justify premium pricing and an expectation of valuing your time is mandatory if you don’t want to ruin your chances of gaining the entire relationship at premium pricing. Now wouldn’t that be better than being the ‘kickin’ boy?

Myth number 4: A sales culture means setting goals, getting training, and building an incentive program

Actually, that worn out threesome is a guarantee it won’t work. That’s right. It will make things worse.

Goals aren’t too bad, except that you don’t have great mechanisms to track them and you’re not looking at critical drivers, so by the time you are looking at results, you’re too late.

Training is never the answer. Education is. Especially when you are educating them on how to hold the respect in the process and to get the prospect to tell you the substantial money they save or earn with your clearly-defined Unique Selling Proposition.

In 23 years, I’ve asked thousands of bank executives if they could name one organization that did “sales training” and had any meaningful and sustainable result.

Still haven’t of a one.

It’s all about culture, systems, marketing, strategy and execution. Without a holistic system, the result is never pretty. Now your people feel like losers because they were trained and they STILL aren’t effective.

And incentive programs…well, that deserves its own piece. Let’s just say that most banks are at least 90 percent wrong with the structure of their incentive plans, and as a result they get the wrong behaviors and the wrong results — and they breed greed and an “it’s all about me” mentality into the culture.

Myth 5: All we need is someone to be in charge of this

In fact, that is the best way of all to guarantee failure. This is NOT a one person job. It is an integrated system. Tied to strategy. Tied to culture. With focused measurements and celebrations and recognitions tied to them, team contents, incessant coaching and teaching, learning plans, and integration with marketing. Many people have to be in charge and know their “hat” to know how to deliver on what they are to do so that the entire “system” can flow.

In your service,
Roxanne Emmerich President and CEO

photo credit: Roebot

Even though it was 20 years ago, I remember it like it was yesterday. One of the attendees at a bank CEO conference came up after my speech and began to lecture me. “There’s one distinction you’re missing, Roxanne. We bankers, we’re like sheep. The first one marches up to the ledge and falls off, and the rest march in step screaming Baaaaaahhhhh! as they fall one by one over the ledge. You have to stop believing bankers actually think for themselves!”

Since then, I’ve watched that scenario play out too often. “Geez, let’s all get a bank into a grocery store before somebody else does. No time to do a profitability analysis. Let’s mortgage homes at 105 percent… that will be fun. Hey, anybody for a behemoth amount of brokered deposits? That’ll be easier than teaching our people to not be order takers, eh?”

What’s the next crazy thing that will have the wolves at the bottom of the canyon salivating?

My prediction: it’s buying distressed banks. It’s the lazy man’s way to grow a bank. And along with it comes a capital drain, asset problems to tie up your ability to prosper for years, us-and-them wars between the merged teams stifling your ability to move forward for two years, to say nothing of the lowered safety rating just when customers are all becoming experts on bank safety!

So how do you grow in a time when loan demand has shriveled up?

It’s time to get wise. A recent new client of ours made capturing more low-cost deposits their top initiative. They had been at 120 percent loan-to-deposit. Ouch. Within four months, the CEO called and said, “Hey, that really worked. Now show us how to do this to get loans to keep up with our deposits!” If they can do it, so can you. How?

Follow these five steps:

1. First, take your culture up 20 notches. If customers aren’t raving, that’s right, RAVING about you, nothing else will work. Your employees’ passion to be extraordinary must visibly show. Until this is remarkable, don’t move on to step two.
2. Identify the 100 ideal prospects that you will become unstoppable at attracting. Create a lesser approach for your top 1000 list. Start your “give” campaign.
3. Bring up the skill sets of your selling team. I guarantee you that no matter how good they are, they’re not even one third of the way there. If they EVER say they can do the deal as long as they can match the rates, you have a lack of competencies that must be addressed aggressively.
4. Get massive. You have a limited time when there is bad news about a competitor in the area to easily sweep up all their best customers and employees, so you’d better have your culture and skill set ready to go BEFORE that happens.
5. There will be more opportunities as other banks go over that cliff. Sad for them, great opportunity for you. As you watch sheep dropping from the sky, simply repeat the five steps!

Good points, you say. This makes sense. But dang, your people don’t really know how to capitalize on this. Why isn’t it working? Because there are five whoppin’ hurdles that make it feel like that dream where you are being chased but your legs won’t move.

photo credit: steffofsd

 “It’s Hollywood!” my grandfather said as he watched the first man land on the moon. “That’s not really happening.”

From the viewpoint of my grandfather—who still owned the horses on his farm till the day he died because he did not trust that tractors were really the wave of the future—a person on the moon was beyond his scope of understanding.

That situation is not very dissimilar from the current state of banking. Most banks are experiencing acceptable spreads, so they are holding onto their horses while financial services companies are moving on to four-wheel drive, turbo-charged tractors.

The problem is that what creates profits for banks today will probably not create profits in the future. The new trends are so complicated and threatening that it is much easier to ignore them, hoping they will just go away. Smart leaders are analyzing the trends, deciding which will create the best opportunities, and building the foundation for upcoming crazy times.

Here are some suggestions for you to focus on in creating your future.

1. Resist temptation to acquire.

Yes, it sounds sexy and easy. Weak banks are throwing the keys at stronger banks right now and it sounds a little easier than organic growth…but think again.

When you acquire, you get the bad loans, the people who made them, AND the mindsets and skillsets of the executives who caused that bank to get into the shape it’s in. And that’s the good part.

The real challenge is that you also get a culture of “us-versus-them” game-playing that typically takes two years to clean up. Now that’s costly.

Since culture is the leading predictor of future growth and profitability, it isn’t just the impact of having to transform the culture of the new bank that’s costly. There’s the even more costly impact on your own bank’s culture—which is already results-driven, upbeat, possibility-oriented and downright rocking. Plus, of course, there’s always the risk that changing the culture of the acquired bank won’t work because they refuse to dance to your tune.

Although smarter minds than mine are predicting that acquisitions may be available for 10 cents on the dollar come 2013, you’ll always want to consider organic growth first and get good at it. Then, and only then, should you consider picking up one of those banks in 2013 at bargain pricing.

In order to acquire, you have to have your own house in order—from systems of culture to hiring, marketing, sales processes…you name it—you want systems in place that work before you risk blowing up what has taken hard work to create.

2. Create an identity.

Position your bank by either a niche market that you serve, by a style of doing business such as speed or customer service or financial planning, or by unusual products. History has proven that niched businesses are more profitable than generic businesses, and location, which was the niche for most banks in the past, will be closer to inconsequential in the future as Generation “Y” does banking on their terms. Identifying 3-5 target markets and building programs around those targets is key.

3. Change your focus from customer satisfaction to customer success.

Traditional marketing has been a tremendous ROI disappointment in almost every bank and company for the last decade. It just doesn’t work too well any more.

Legendary marketing mind Seth Godin finds it hard to believe that people are still doing it.

What works now is magnetic marketing—being so good at what you do that people would crawl naked over broken glass to get to you.

That means that you have to create “wow” experiences that create a talkable “sneezing” opportunity. The goal? That every customer becomes an evangelist. And it doesn’t just end there. Beyond talkable experiences, the focus must, must, must be on customer success. IF you make people successful, they’ll pay you a huge premium, send all their friends, and stay for life. NOW you have a bank.

4. OWN the relationship.

If your people are still order-taking, there are risks that may quickly become insurmountable. The problem is that somebody who represents another bank or brokerage where your customer does business will likely figure out a sales process that pulls in your customer’s total combined business. If you’re not first…well, you can figure that part out.

5.  Teach your people how to “be”

Training is a word used for animals. You don’t want to “train” your people. You want to educate your people on how to be.

When people get how to “be” responsive, caring, aware, committed, passionate about making a difference, results-focused, clear-thinking, practical and more, that trumps a few sales tricks any day.

To do that, your people need to learn how to learn.

Research from the American Society for Training and Development found the highest return on investment that companies received was from dollars invested in educating their people. Technology was second. So, why are banks investing in buildings—the least profitable investment?

It isn’t enough to learn for the sake of learning. It is what your people are learning that matters. In the past, people simply had to learn what to do. Now we have to teach them how to think. Intuition comes from having a wide base of knowledge from focused learning.

As important as learning…is unlearning. Bank personnel are traditionally miserable at this. More than any industry, bankers are married to the old ways of doing things.

Turn your organization—instead—into a learning organization. As we shift from the industrial era to the knowledge economy, the winners will be those organizations who have invested in learning.

If you are still using the old models of business like the old models of strategic planning, managing by objectives, and the other “be-all-end-all-answers” of business schools of the past, you will find that the employee of today is far too sophisticated to be managed by control-freak techniques. Instead of managing by fear, we need to unleash people by creating a powerful vision that allows them to think outside the box of the archaic job-description model and to create extraordinary results by creatively finding ways to align with the vision of the organization.

6. Create a powerful direction.

Are your people passionate about your vision? Is it embroidered on their underwear? If not, you’re missing the most significant component of a high-performance organization.

A mission statement doesn’t cut it. Let me repeat that. A mission statement never impacts passion. A vision of extraordinary results that gets everyone salivating is a much more powerful transformational component for improving results.

Additionally, being extremely clear about what niche markets you’ll pursue, the psychographics of those niche markets, the critical drivers you’ll measure and celebrate weekly, the key initiatives and the key results that will enable you to meet your most important objectives….well, if those aren’t clear, direction and passion just ain’t gonna happen.

While I hate to share the obvious, it may be a very important wake-up call. The game of leadership has stepped up—and you need to step up your game… fast. This starts with clarity and aligning everyone.

7. Burn the budget.

Don’t get me wrong…you still need a budget. You just have to get more sophisticated in your modeling and be able to change it based on scenarios that play out. If you don’t think that you need to shake it up when three banks in your area are all struggling and their customers are sitting there ripe to be picked off, you’ve lost touch with reality.

And yet it happens all time. Those opportunities present themselves and the bean counters chime in…”well, it’s not in our budget.” That dog don’t hunt.

8. Learn the new model of sales.

There are entirely too many banks sitting with below 70 percent loan-to-deposit who are accepting it as the new reality. Unfortunately, it’s only reality for them because their people never caught on to the fact that they now have to be hunters…targeting their competitors’ most desirable customers and capturing every one of them while attracting premium pricing.

Of course, this new model of sales doesn’t work so well with a team that’s missing the skills or the mindset to do that. It’s your job as a leader to improve those skills and change that mindset.

9.  Hide from glum bankers.

Emotional Intelligence experts say that depression is a bit contagious. If you hang around depressed people…well, it’s hard to not pick up on their gloomy ways of thinking, their victim mentality, and their dismal that’s-just-how-it-is mindset.

So, my best advice is hang around movers and shakers who are salivating about the opportunities out there and “high-fiving” the massive results they’re getting by seizing those opportunities.

It’s exciting to see the tremendous amount of bankers who are “getting it” right now. But the majority…well, Eeyore could be their pet.

Sure, bad things still happen to good people. But while a typical response would be, “That stinks. I guess we stink and I guess that’s how it’s going to stay,” a much healthier response is, “Hmm, what can I do to overcome the impact of that?”

The ultimate message here is: Stay away from the highly depressed. They do not make good companions when times are tough.

photo credit: Travelling_Artist

(If you haven’t downloaded our free 2012 Opportunity Preparedness Guide, click here to get it now.)

With industry experts predicting further consolidation in 2012, there’s a tremendous opportunity for your bank to grow its profits–as weaker community banks are acquired or closed…and stronger, better prepared banks in these same market areas pro-actively recruit (or simply inherit) the best and most profitable customers in town.

Will you be one of the banks that pulls ahead–attracting the best customers of your challenged competitors?

To insure that it is, I’d like to invite you a unique event that will prepare your top executives and key staff to implement a different kind of strategic plan–one that my own top-performing clients have already used to improve their loan quality, ROE, net interest margin, customer service scores, sales ability and more.

Some clients have added as much as 43 basis points to their net interest margin in just nine months using this information… others who were 3rd- and 4th-quartile performing banks moved up. (95 percentile in profitability and net-interest margin in their state in under two years.) 

All the while decreasing delinquencies and increasing their asset quality!

You may have heard me present many of these unique strategies at last year’s ABA Convention, or one of the many regional and state banking conventions I’ve keynoted in 49 states over the last few decades. I know what it takes to run a successful bank because I’ve been guided more than half the top 15% of America’s highest-performing institutions–specializing in growing community banks with assets from $500,000 to $2 billion.

Every year, I host my own banking event–the Profit-Growth Banking Summit™–designed to move banks ahead rapidly…with better ratios, more profitable commercial loans, easier premium pricing, better committee approval rates, more loan completions, better customer service and a system of attracting the best and most profitable customers from the local community.

It’s a hands-on marketing, culture and sales management “boot camp” dedicated to giving you REAL strategies that are immediately actionable and eminently productive. It gets you focused on growing profits, performance and high-margin sales. And it’s tailored to deliver exactly what smart banks need to do to achieve record years during challenging times.

What do other bankers say about their RESULTS after attending the Profit-Growth Banking Summit?

“Our loan growth was up $100 million in less than five months during the heart of a recession while we improved loan quality. Return on equity increased from 7.18% to 10.44% in a year. Net interest margin increased from 3.63% to 3.95% in a year. ”
–J. Marcuccilli, CEO,
STAR Financial

“I’ve attended THREE times, sent ALL my managers, and in the last year, we’ve experienced more growth than in the previous ten years combined! The growth of deposits and loans can be described as a miracle and profits are up 44%.”
–P. Steele, President /CEO,
First Volunteer Bank

Join Us For The Next Profit-Growth Banking Summit™

This is a must-attend event for CEOs, presidents, executives, vice presidents, and top producers who want to learn the new “norms” used by top performing banks–with in-depth detail that gets your staff excited about implementing these strategies right away. (In fact, most banks send two to three key people in order to effect rapid change once they return home.)

Get everyone aligned to your new strategic plan for 2012. (We even make it easy to bring a large group, with group rates for five or more attendees.)

Click here for more details, or call us at (952) 820-0360.

Branding is a hot trend…but almost everyone has it wrong. A truckload of dough is wasted every year by missing out on what brand really means.

Let’s make it simple.

Holiday gifts are filled with one of my favorite things: CHOCOLATE. It’s right up there with the meaning of life.

But here’s an observation I’ve made over the last few holiday seasons:

If someone delivers a box of cheap chocolates to our office, they last for weeks. If, on the other hand, the chocolates are exquisite melt-in-your-mouth types, they’re gone in a few blinks. Everyone knows who sent them, and everybody loooooves the person who sent them.

So if you were a chocolate, would your clients call you a Hershey or a Godiva? The answer has a greater influence on your future profitability than almost anything else.

Why?

A Hershey will match prices. A Godiva never goes on sale and never demeans its brand by having coupons or sales.

A Hershey is perceived as a commodity. If something better comes along, people will drop their Hersheys in a New York minute. A Godiva merits a special trip, because the best is worth the effort.

A Hershey is undifferentiated, it’s okay…it’s nothing to write home about. A Godiva is a talkable experience. People will rave.

Positioning yourself as a Godiva brand, and living like it, is one of the best things you can do to prepare to kick off the New Year–it assures more profitable relationships, higher-quality relationships, and a brand that is insisted upon.

But that brand has little to do with traditional “branding” offered by marketing firms. It has everything to do with the client experience–the feel and culture of an organization.

So this year, instead of thinking like a two-pound box of cheap chocolates, savor the taste of greatness. Let that feeling stimulate your thinking every day as you live out being a Godiva.