The entire world is changing, so too is the world of sales. Astute bank leaders and relationship managers decipher these signs and adapt. Remember, extinction is what occurs when a species is unable to adapt to environmental changes. Many banks will face extinction over the next five years, but those that adapt will continue to thrive in this new era of selling.
The following are three trends that are affecting how we will develop new business:
- Direct access to decision-makers will diminish.
If your relationship managers are having trouble getting in front of decision makers now, beware, it’s only going to get tougher. A lot tougher. CEOs and business owners alike are buried in assessing and trying stay ahead of all of the changes driven by technology, regulation, consolidation, and innovation. This means there will be less interest and time available for face-to-face meetings with bankers.
- Standardizing of the buying process.
Buyers will continue to leverage technology in every area of business to drive up efficiency and drive down costs. Gartner estimates that by 2020, customers will manage 85% of their purchase transactions without talking to a human. Going directly to the source and by-passing the traditional sales process and sales people all together is already being seeing in manufacturing, distribution and dealers. It’s only a matter of time till we’ll see it in banking.
- Decision-Makers are demanding more.
The old needs-based selling model developed by IBM and Xerox is not entirely dead. But it’s close. The consultative sales model still offers a competitive advantage in slower evolving industries such as banking. But a new era of selling is emerging which calls for salespeople to have more expertise and industry specific knowledge. As markets become more crowded and business in general becomes more complex, business owners and corporate decision- makers are looking for more insights, recommendations and strategic advice from their vendors and partners. Your relationship managers must learn how to deliver value outside of the standard promises made by every banker of responsiveness, service and pricing. The new style of selling is called “authoritative selling.” Authority selling is the approach that will help you stand head and shoulders above your competitors in a side-by-side comparison. Authorities have more than a surface level understanding of an industry. They have deep insight that becomes readily available to a prospect when relationship managers use industry specific terms and are able to refer to specific equipment used by their prospect by name. Authorities understand the industries pain points, not just the pain points of a specific company and that is a true competitive advantage. Relationship managers will be called on to bring more to the table if they hope to retain their long-time clients and remain successful in the future.
Simple Steps to Becoming an Authority and Expert
Relationship managers are typically fearful of seeing and defining themselves as authorities and experts in anything other than banking. Part of what it means to evolve means being open to redefining ourselves and our value proposition. The following are some simple steps you can take to better position yourself as more of an authority and expert.
- Leverage your existing experience: Review your entire banking career; are there a couple industries where you’ve had more clients than other industries? Are there a couple industries where you’ve done significantly more transactions than other industries? Not that this is the sole criteria for choosing to focus a percentage of your business development time on one or two industries, but it is a consideration.
- Consider the depth of the market: In rural markets, relationship managers don’t have the luxury of focusing on a particular industry. That said, for community banks in rural markets, your relationship managers still need to demonstrate industry specific knowledge and present themselves and their bank as having deep expertise in that industry. In metropolitan markets, relationship managers need to research and assess the size of various vertical niches in which they’re considering pursuing. Is the niche large enough with enough companies and businesses that match well with your banks credit appetite and product offering? As an example, in Los Angeles and Orange Counties, there are 4,228 “professional services” firms with revenues of $3M to $50M. That niche is more than large enough to focus some of your business development activities on becoming an expert at and known for working with professional services firms.
- Leverage Online Platforms: Conducting industry research has gotten very easy. Googleand other search engines represent very powerful ways to search the internet for industry specific resources. In working with hundreds of relationship managers in rural and metropolitan markets helping them to implement a segmentation approach, we have found tons of useful resources that are free. Of course there are the “tried and true” resources such as D&B and advanced data platforms from Vertical IQ, Nielsen and Resonate.
The value proposition of today’s “generalist” banker is declining. Decision makers are expecting more insights and recommendations from their relationship managers that can positively impact the business. Simply providing a commercial loan or line of credit isn’t likely to sustain banks in the near future. Developing industry expertise that helps you differentiate yourself is crucial for on-going success.
The 2018 Sales Honing Academy is a great way for Relationship Managers to move away from generalists and start building value and relationships with prospects. We’re offering two programs in 2018 allowing you to pick the best option for your team. Learn more.