Two issues are challenging banks to capitalize on any sales momentum and risk sales inertia. Without data and analytics, banks will struggle to scale sales methodology and grow revenue — even if they have an effective sales methodology and highly trained team in place.
Current market dynamics are creating a new set of obstacles for financial institutions to meet commercial revenue targets in the face of economic uncertainty and deteriorating industries and sub-segments. In addition, frontline sales resources at banks have become consumed by servicing and monitoring activities as institutions refocused relationship managers to portfolio management during the coronavirus pandemic
While banks might experience short-term growth, they will struggle to find long-term success given the absence of a focused, cost-effective and scalable process aimed at the ideal, targeted customer. That’s because the traditional, historical methods for selling are largely ineffective in today’s environment. Commercial banking sales have been rooted in selling through relationships and networking with “centers of influence,” such as accountants or attorneys. This is challenging approach in today’s climate because of a lack of a methodical plan to expand, repopulate, curate and filter the network on an ongoing basis to insure ample and effective referrals. The financial results prove this out with historically low win rates, sporadic cross-sale success and — in many cases — heightened levels of sales personnel attrition.
Without a standardized methodology, banks are generally unable to unlock the magnitude of their organization. Sales efforts are not repeatable and must be reinvented with each new sale, proving both costly and ineffective in business development. Without scalability, as banks grow inorganically, these challenges compounded and complicate further growth.
Banks have historically failed to leverage their disparate data sources to drive the methodology and optimize execution of sales plans. It is nearly impossible for bankers to identify and prioritize relationships in a meaningful way, given how data is typically stored in disparate data houses across multiple non-integrated systems.
The lack of coordination around data means that banks typically fail to effectively, easily and accurately align product revenue, whether interest or fee income, to an individual borrower or relationship. Executives face a challenge in planning and segmenting holistic, high-opportunity sales calls through proper segmentation and targeted sales activities without a clear understanding of the 360-degree profitability view.
Why is this important? Now more than ever, banks require a new scalable method to effectively identify, pursue, and sell to targeted existing and new prospective clients who offer new opportunities within optimal, performing industry segments.
A data-driven sales model is the key to scalability. Scalability is a sought-after state of operations, and provides the foundation for rapid, cost-effective growth. At the core of scalability is repeatability — the ease with which results can be reproduced even as bank operations change and adapt to varying conditions. Scalability is often made possible through technology enablement while leveraging automation.
Banks have explored scalability through technology and tools such as loan origination systems, base level CRM systems, and integrated third-party tools to automate the credit underwriting and scoring processes. But this alone does not create or generate scalability. Scalability is constructed by standardized, streamlined policies and procedures, and is evidenced by its repeatability and simplicity.
Scalable organizations benefit from economies of scale, processing greater volumes with fewer resources. The direct result of top line revenue growth is increased net profits and reduced operating expenses. A bank’s DNA must be central to the intersection of sales methodology and technology to drive support and insight, leading to greater scalability and accelerated growth.
In our view, banks should operate with a delivery model that leverages data and analytics, provides scalability and identifies the following: advanced customer segmentation, early-stage opportunity identification, early detection of significant cross sell opportunities and pre-defined sales targets supported by actionable and tactical workplans. With the right tool, banks also unify the sales management process and drive user adoption and experience through customized automated dashboards and reporting, accelerating success and driving sales accountability and transparency. With this approach, banks can manage relationship managers’ sales activity in ways that create scalable, sustainable sales success and ultimately achieve higher growth rates.