It’s not the same business that I started in, and it’s not the same one you remember from those early days in your career either.
If you’re like most of the bank executives I talk to, you’re probably struggling a bit to find your footing in this “new normal.”
How do you get solid, consistent loan growth while, at the same time, growing net interest margin and only working with A+ quality credits so that you don’t end up in the loan cleanup yo-yo every cycle – a cycle that haunts so many banks and keeps them from being great?
Most banks have no idea how to do it…no; that’s not exactly right. Most bankers simply don’t believe it can be done.
Let down the drawbridge…because there is a mountain of evidence, it can be done. I’m going to share with you the most important change you must make to grow your loan portfolio.
This is the first of three strategies I’ll share with you that I promise will simultaneously transform the growth, quality, and profitability of your loan portfolio.
The big brick wall between you and more loans is the belief inside the minds of your lenders.
It’s not your fault (or theirs).
Here’s what must be done…
Most of your lenders don’t believe they have anything to offer that isn’t a commodity – and for many, that’s true. As a result, they really have no abilities to ask for an extreme premium price…or even a slightly higher price for that matter.
Others have “head trash” – belief systems in place that typical training cannot fix. It’s like an elephant attempting to balance on its toes and do ballet.
The real issue is that they believe that the top buying criteria of their prospects should be the rate, as it would be for them personally, so they really have no possible chance to confront that and win when that ugly little topic of “rate matching” comes up. Or perhaps their “head trash” is a need for approval, so their need to be liked exceeds their need to do business, and they won’t take the risk to ask for a higher rate. Still, others battle with the “head trash” of money issues, and they just can’t ask for the business. These issues are far beyond what typical sales training can fix.
Others have no idea how to get out there at the right time in the right way, so they are only working on deals that the prospect initiated because it is loan renewal time. Let’s face it – they’re already in a mess at that point. It’s not impossible – but nearly impossible to turn that ship and get out of the “competition rate-matching game” at that point. To be blunt – they’re just plain doing their business wrong, with the wrong people and in the wrong way.
Of course, most banks think they can fix it by bringing in a new sales trainer or a new sales executive. Of course, that BOMBS about 97% of the time and only mildly works 2% of the time – but, even then, it is not sustainable.
Why? Because managing sales is not about managing salespeople – it’s about managing a sales process.
Now, a lot of bankers I present this to resist my assertion. They say, “my staff can’t or won’t sell—but they’re good credit people.” I get that a lot from bank execs who’ve thrown money at sales training a few times. It’s like prescribing one dose of aspirin for bone cancer. It hardly impacts, and it sure doesn’t create a sustainable result.
The truth is, that if it feels like selling, you’re doing it wrong. Your people will push back on any approach to selling that makes them want to hide their heads the next time they go to church and see the customer they just “closed” last week.
I have a friend who complains every time I see him that he wished there was a bank in his town that worked with our firm. Every trip through the drive-through concludes with a “You should really meet with Bob, our branch financial advisor, about your situation. Would you like to set up an appointment?”
My buddy tries not to make eye contact now, and he’s looking for a new bank.
Now, I guarantee that little question was born out of some grand and expensive sales training. It’s been carefully scripted…
And it is repelling customers every day as they come through the drive-through.
Worse, I’ll bet dollars to doughnuts that that script is really the CLO’s last grasping attempt to get some sales and prospect from his staff…’cause he can’t get them to leave the branch!
Now, it all can be fixed, but it requires a different and integrated approach.