After spending more than twenty years as a banker and finding various ways in which to exceed annual portfolio management goals, it became clear there are five critical steps involved. An overview of key components follow and are the basis of a five-step program for bankers guaranteed to deepen customer relationships and increase loan requests, deposits, and the cross-sale of bank products.
1. Time – Time is at a premium for decision makers of a business, CEO, CFO, Entrepreneur, and Owner. Respectfully, they are in positions of significant responsibility and their point of view must be considered. They are pressed to allocate their time according to what gives them the most return. In this regard, time can be used as an ally in obtaining their business. There are two things they want including a demonstration that their banker has taken the time to learn about their business and that a response to their request will be given in a timely manner. Those that responded first, to a client’s request, have a significantly higher conversion rate than late responders. Their time will be rewarded with a high yield return through a rapid response.
2. Tour – Another effective use of time is the plant tour where executives and owners get to talk about their business. This is where one evidences the learned knowledge of the client’s business. A list of prepared questions relevant to the business is essential. Have in mind the need to return to the client a Term Sheet and use it along with the Loan Analysis Document and a review of the relationship history as guideposts for questions. Additionally, the bank officer should be prepared to discuss the historic relationship and be forward looking in how the bank can partner with the business to deepen the relationship.
3. Translation – Having gathered all of the information from the plant tour, it then becomes time to translate the information to maximize the opportunity to seize the relationship. The data collected should point a relationship banker to the way in which the bank can partner with the client to obtain the financial goals sought. Formulation of a proposal with attendant products such as an equipment loan, line of credit, deposit service, investment services etc., demonstrates a framework under which the bank could proceed in assisting the client.
4. Term-sheet: The use of the term sheet provides a distinctive tool in demonstrating a timely response, an understanding of the clients’ needs, and a proposal to work together. Since the term sheet was a guidepost in asking questions on the tour, it should be readily completed, with appropriate disclaimers and soft approvals, not more than 48 hours from the time of the plant tour. The term sheet articulates the clients needs and reinforces the understanding of the financial goals. Lastly, the term sheet proposes how the bank can work with the client and provides satisfaction that the time spent was not wasted.
5. Transition: For some, this is a cultural transition requiring a shift in resources in order to supply the front line personnel with tools necessary to quickly make available resources, with its requisite processes and soft approvals, to meet the needs of the customer. When services not in the front line personnel’s department are needed the supporting departments should be readily available to make the process smooth for the customer.
When “T to the fifth power” is executed bank wide there will be exponential growth both organically and externally as the word of timely service makes the rounds in your community.
Larry Friis is the Principal at High-touch Leadership, an advisory services firm for the financial services industry. He has served on the Board of Directors of two financial institutions and is a Professional speaker, a Doctoral Candidate, and an Adjunct Professor. He was a banker for more than 20 years. Larry can be reached at firstname.lastname@example.org