Tired of Sacrificing Net Interest Margin at the Altar of Loan Growth?
Discover how to get fast, consistent growth AND fatter margins while reducing risk.
You’ve got a problem…
Your sales staff was lulled to sleep during the boom and those that are left, now a decade later, well, they don’t have the skills or the confidence to go snap up quality accounts and get them at a rate you can dance about.
They sit in the office trapped, as if in a box of their own making, believing that it’s not possible to rapidly grow their portfolio with quality credits at premium pricing…that it’s not possible to win an account without matching rates…that the competition and YOU, your bank, are an interchangeable commodity.
It’s not their fault—they’ve all had their teeth kicked in too many times by prospects who halt everything as you’re going to the closing table because they got a better rate from the bank across the street…and now the prospect is insisting YOU match it.
But you can’t let all of those things keep you from growing your portfolio fast, with less risk and MUCH greater profits.
In this article, I’m going to show how good banks, and even some struggling banks, transformed their loan growth, growing faster than they ever had before. Doing it by only targeting A+ quality credits and winning those deals at premium prices.
The Secret to Winning More Deals with A+ Quality Credits at Premium Prices
If you want to win more deals, you must be more valuable to a prospect (even at a higher rate) than another bank. And you’ve got to have a way to communicate your value to that prospect. You need Unique Selling Propositions (USP).
Rosser Reeves, creator of the USP concept, in his book Reality in Advertising, laments that the USP is widely misunderstood and defines it in three parts:
- Each advertisement must make a proposition to the consumer—not just words, product puffery, or show-window advertising. Each advertisement must say to each reader: “Buy this product, for this specific benefit.”
- The proposition must be one the competition cannot or does not offer. It must be unique.
- The proposition must be strong enough to move the masses, i.e., attract new customers as well as potential customers.
Let’s break that down and apply it to your bank.
Reaves says, ``Each advertisement must say to each reader: Buy this product, for this specific benefit``
Where Reeves says advertisement, think broadly. It means every place you promote a product or service to a customer or prospect—website, email, social media, signs and more traditional ads on TV, radio, print and direct mail, and most importantly, in the sales process.
The proposition must be one that your competition cannot or does not offer
In other words, it has to be unique. If not, there’s no advantage in using it.
The proposition must be strong enough to move the masses
It’s not enough to talk about benefits—even unique benefits—if the benefits are weak and unimportant to your prospects. Those benefits must be listed as explicit or overt benefits in order for the prospect to believe.
How a Brand-New Delivery Company Beat a Monopolistic, Government-Sponsored Behemoth with a Single, Strong USP
You think you have a tough competitive environment…When Fred Smith founded FedEx in 1971, he had one major competitor—The United States Postal Service, a government monopoly in the package delivery service.
Yet, FedEx’s familiar USP turned the mail industry upside down:
“When it absolutely, positively has to be there overnight.”
FedEx hit right at the heart of its competitor’s weakness—slow, unreliable delivery.
For the FedEx customer—business people shipping important packages and documents—this was music to their ears. Now, let me connect the dots for you…it currently costs 49 cents to send a First Class letter. Using the Postal Service’s Priority Overnight mail, you’ll pay $19.99.
To ship FedEx Priority Overnight, the current rate is $58.20.
The FedEx USP is worth 118 times more than the First Class service and almost 3 times more than similar overnight delivery from the Postal Service.
Strong USPs unlock customers and deals. They attract the best customers, those looking for added value and willing to pay premium pricing.
And you don’t need one—you need many—one for every product, target market, and way of doing business so you can match the needs of each customer.