ATM machines, online banking, remote depositsit seems like banks don't want their customers coming to the branches anymore.
Well, guess what? They don't.
If banks don't offer online banking, they will lose customers. If customers don't come into branches, how do you sell them more products and services? It's a Catch-22.
Any bank employee who relies on interaction with a customer has found success more difficult in recent yearsand financial advisors have been hit the hardest.
Some banks have been modifying compensation plans to account for the change, but this, too, can cause some employees to become disgruntled and seek employment elsewhere.
Foot traffic in bank branches will continue to decline as more customers become familiar with online banking. Sure, there are some old-school customers who write checks at grocery stores and go into branches to make deposits, but they will eventually jump on the technology bandwagon.
If customers do everything online then banks become a commodityand that's bad for your sales. But remember, from the bank's perspective, it's all upside. Indeed, many of them are making larger profits because they can provide the same services with fewer employees. USAA federal savings is a good example of a bank that started out without much brick and mortar. (Read more about USAA in our march issue.) They learned how to achieve success via technology and for many years have been ahead of the curve. USAA, as well as several other banks, have done a good job of identifying customers' needs without meeting them face-to-face.
They then have their frontline salespeople reach out to these customers and up-sell and cross-sell products and services. This is all done with less overheadless bank branches to pay for and far fewer employees.
Banks that wish to stay competitive in the technology age must turn their branches into mini sales centers.
It is more difficult to sell products or services to customers you don't know. This is why banks still need sales- people to build relationships and give personalized service to the customers. Personal relationship will always be important.
Financial advisors have been one of the most affected sales positions because of less branch traffic. This is because the advisor historically has depended on referrals stemming from branch foot traffic. Less foot traffic, fewer referrals.
The banks that have hired better branch salespeople have fared fine, but the ones still stuck in an old-school service model have suffered.
In either case, success as a financial advisor depends on client relationships and assertiveness in seeking them.
If customers no longer come to advisors, it is time for advisors to go to them. The big advantage to this strategy is the advisor is no longer just reacting to average-size referrals, but rather being proactive and going after bigger clients.
For this to work the bank has to allow the advisor to reach out to the customers. This is not allowed at a large number of banks. Many are guilty of watching the branch traffic diealong with their advisors. If an advisor must wait for a referral, but the referrals are dropping because of less foot traffic, how is the advisor supposed to have success?
At well-run banks an advisor can reach out to customers proactively without a referral. These banks also aggressively encourage joint calls to customers. If a mortgage originator is going out to meet with a customer, why not take the advisor and vice versa?
Some bankers become possessive of their customers and don't want to introduce other bankers or advisors. This is why banks must tie incentive plans to cross-selling, joint calling and referrals if they truly hope for higher success.
One good example is wells Fargo. They understand sales and cross- selling products and services. Although there will always be some infighting, wells Fargo does a good job at getting their salespeople to work together. This is done through encouragement and a well-structured incentive plan. It must come from the top down. If the CEO of the bank does not think like a salesperson, he or she will not manage sales from the top.
Here at the rummage group we counsel bank-based advisors on becoming more successful with their practices and careers. This all starts with working for a bank that truly understands how to be more successful in a technology age. A few years ago I helped two advisors get to a bank that was moving from a service model to a sales model. Both advisors were very strong salespeople. However, both of them failed because the bank did not keep its promise of moving to a sales model quickly.
After this happened, I decided to never send this bank any more talent. Many banks do not understand sales and my guess is that they will eventually be acquired by ones that do.
Some banks pride themselves on being service-driven instead of a "pushy" sales model. Any successful salesperson understands quality service is a big part of the sales success. Banks must start with hiring strong advisors, but they also must allow them to be proactive with customers.
Here are a few tips for advisors in a lower bank traffic environment.
Make sure you work at a bank that preps you for success. You should feel their policies help you close more business instead of making it more difficult.
Use your manager for help. He/she has more pull with banking partners.
Find every bank partner, build relationships, and earn their respect and trust. If your banking partners don't like you, they will not send you many referrals.
Start calling customers. Have your manager print a list of maturing CDs, large deposits, large balance accounts, etc. Have a daily goal for calls and hold yourself accountable.
Look for money in motion. Become friendly with tellersthey are a great source.
Call existing clients at least twice per year to provide an update. During this call, you may discover more assets or get a referral.
Ask every banking partner (including tellers) to make a list of all the clients they know with a moderate to high net worth. Make joint calls on these customers.
Give to get. Take your banking partners to lunch or dinner. Get to know them and learn what you can do to help them.
Hold a seminar and involve your banking partners. Make sure it's interesting to the customers.
Hold a client appreciation event. Invite your best clients and have them bring a friend.
Get to know as many bank executives as possiblethey have great referrals too.
If your bank does not support you in these strategies, find one that willthere are a few out there.
Rick Rummage is the founder and CEO of the Rummage Group. He can be reached at rick@therummagegroup.com
