Enhancing Banking Sales Strategies For Future Growth
Banking sales strategies are being redefined: Here’s how to pivot your customer relationships.
While every industry grapples with the volatility of the economic environment and market conditions, banking and financial services organizations are dealing with specific challenges emerging from multiple disruptive forces:
These challenges include:
- Maintaining an acceptable margin in a volatile yield curve market. The predicted ups and downs in the yield curve can affect your bank’s overall profitability.
- Significant uncertainty in managing interest rate risk, impacting both deposit rates and loan pricing. Despite higher interest rates on loans, many banks’ margins are compressed due to the corresponding increase in funding costs.
What Opportunities do These Challenges Create for Banks?
Considering the cyclical nature of the banking industry, the good news is that these challenges offer a distinct opportunity for those financial institutions that take a proactive, strategic approach. The banks that will thrive through market challenges and gain a strong competitive foothold regardless of external factors will be those that pivot towards offering more holistic services and fostering deeper relationships with clients.
The key to this proactive, strategic approach to banking sales strategies will be a committed, skilled team of banking professionals focused on creating higher levels of value for their customers at every step. Let’s take a closer look at what banks need to do to successfully make this shift.
The Future of Holistic Banking Relationships
When you have more of the customer’s wallet share, they will be more loyal and more profitable with less risk of fraud. And by achieving a better balance between fee-based services and interest income, you can keep your margins more consistent.
To address the challenges the interest rate environment poses, banks must pivot away from single-product offerings and towards fostering deeper, broader relationships with customers. This is particularly true for commercial and business banking, where a deep understanding of the customer’s business needs is paramount. With a more holistic, consultative approach to their banking sales strategies, banking professionals will be better able to uncover opportunities to gather additional deposits, cross-sell products like cash management, fraud prevention services, wealth management, and private banking and provide value-added services beyond just lending.
Banking relationships that are based on a mutual exchange of value are the true definition of a win-win relationship. They tend to be more profitable, less transactional and built on trust. For instance, if a banker simply helps a customer with a loan, the relationship likely ends after the loan is secured. If, instead, the banker spends time learning about the customer and uncovering strategic goals and the desired future state of the business, the banker then opens the door to a trusted partner relationship — they have the opportunity to service not just a loan but also deposit needs, treasury, savings, business loans and investment needs, as well as the potential to provide services for the customer’s employees.
Your Bankers Will Be More Engaged
This type of trusted partnership with customers not only opens up a much deeper and broader pool of prospects, it also provides bankers with a much more compelling and meaningful purpose for doing what they do.
When bankers are serving as customer-centered partners to their clients, they’re not just selling a product to meet a quota or completing a single transactional need; they’re getting to know their customers and their unique circumstances, finding out what matters to them and uncovering additional challenges and opportunities the customer has. And as a result of these more holistic conversations, the banking professional makes a substantial, tangible difference for the customer.
This is a much more fulfilling role to play than simply taking orders. You will see measurable improvements in employee engagement scores, retention and individual productivity. What’s more, it shows the client that the banker — and the bank — has their best interests in mind.
“Value” is Being Redefined in Two Ways
There are two distinct ways that customers will receive value from your bank. First, clients value the ease and efficiency of transactional service. In today’s environment, this need is being met most notably by online banking. In these circumstances, customer “value” is about processing their transactions quickly and efficiently.
Yet there are many banking clients — and sometimes it’s the same client in different circumstances — who want a relationship with their bank and value a human experience. That personal connection can be a bank’s competitive advantage, but it requires more than just a friendly face. The ultimate selling points are those qualities that humans bring to the equation: trust, empathy, curiosity, listening, thoughtful questions and customized, targeted advice. For the foreseeable future, those qualities can’t be replaced by a website or technology.
Bankers need to step up and meet this need. Even though these human-centered elements are increasingly in demand, this is an area many banks continue to struggle with. While racing to remain competitive with technology, most banks haven’t placed enough emphasis on developing the skillset and mindset of their banking professionals to deliver on the promise of their “customer-focused” claims and create meaningful value from the customer’s perspective.
Technology certainly plays a crucial role in attracting and retaining both customers and employees. However, banks must strike a balance between leveraging digital capabilities for efficiency and developing a more effective human touch through skilled banking professionals. Over the past five years, the pendulum has swung too far towards technology to the detriment of the valued partner relationships that many customers are expecting.
Investing in Employee Development and Technology
Bankers who can deliver personalized advice, build trust and meet clients’ diverse financial needs are critical. Capitalizing on this will require shoring up talent, hiring integrity-driven professionals and developing competencies in consultative relationship banking.
The current market has seen intense competition for talent. How do you attract great people in this kind of environment?
An increasingly tight talent market means retention strategies are just as crucial as hiring strategies, if not more so. Banks must invest in training and development programs to enhance their employees’ skills in consultative selling, relationship management and identifying a customer’s unmet needs.
However, developing enhanced skills is only part of the equation. For many bankers, turning friendly relationships into profitable banking business will require a change in mindset about what their role and purpose is. To be effective, training must address and align internal beliefs about what it means to sell and how value is defined.
When bankers are driven by a personal desire to create meaningful value from the customer’s point of view, they’ll be more motivated to truly listen to understand their needs thoroughly before offering solutions. Bankers with this mindset inevitably build stronger, longer lasting and more profitable relationships with their customers. And they inevitably find more satisfaction and fulfillment in their job. They view “selling” not as talking about banking products but rather partnering in the customer’s personal and business economy.
There’s one final component that’s essential for maximizing employee engagement and retention. Whether tenured or rookie talent, great banking professionals a driven by a desire to win and to continually get better. These employees want and expect ongoing development to enhance their skillset and mindset. As such, they crave regular feedback, support and reinforcement from their managers and are counting on continuous development from their employer.
To meet this need, banks need to make sure managers have the skillset and mindset to recognize the full potential of each of their employees and also ensure that managers are equipped, motivated and committed to coaching their team members to achieve it.
Four Strategies for Future-Proofing Your Bank
Here are actions to help your bank win in the current and emerging economic climate:
- Foster deeper, holistic relationships with clients to provide additional value that includes both interest-bearing banking products and fee-based services. This is essential to maintaining acceptable margins in a volatile yield curve market.
- The human touch is your differentiator. Strike a balance between leveraging digital capabilities for efficiency and maintaining a personal connection through client-centered, value-focused frontline bankers and relationship managers. Ensure they have both the skillset and mindset to create higher levels of value for your clients.
- Invest in training and development programs that build a value-focused mindset and enhance employees’ skills in consultative selling, relationship management and identifying and addressing client needs.
- Ensure that your leaders and frontline managers have the motivation, commitment and skills required to coach your bankers. This has consistently shown to result in higher levels of engagement, retention and results.
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