The second installment in Vertical IQ’s free fall webinar series was last week—a presentation entitled A Winning Game Plan: Playing Offense and Defense to Prepare for the Future by Mary Beth Sullivan, managing partner at Capital Performance Group.

Mary Beth’s presentation discussed the context around most financial institutions’ strategic priorities, given the pressures building in the external environment. She highlighted the critical need to transition away from the old “commercial lender” approach to doing business and adopt the “trusted advisor” concept that most small- to mid-sized businesses (SMBs) desire.

Creating a trusted advisor business

We are at a unique confluence of economic uncertainty, fierce competition, and heightened customer expectations. Mary Beth spoke about some key strategic imperatives that are taking shape in the financial industry going into 2020 as a result of this environment.

  • Relationships matter more than ever.
    Acquiring a new customer is anywhere from five to 25 times more expensive than retaining an existing one. Increasing customer retention rates by just 5 percent increases profits by 25 to 95 percent. When a SMB customer has multiple accounts and services, they produce more revenue and tend to be more loyal customers. Plus, if they view their bank and RM as knowledgeable, responsive, and easy to do business with, they are more likely to refer you to a colleague.
  • The banker’s role is evolving toward trusted advisor/problem-solver status.
    Mary Beth discusses how companies like Mercury are disrupting the banking industry, focusing on offering business advice to their startup customers in addition to financial services. This is a bellwether that bankers must learn to provide trusted guidance, not just sell product. And it is also evidence that finding an industry niche can benefit both the banker and their customer, as customers are willing to pay more for that expertise. (Note: Vertical IQ can help you find and develop your knowledge about a particular focus industry.)
  • Broadening the relationship takes patience and partners.
    The most successful bankers have fewer, but deeper, relationships (making retention higher and boosting profitability), and utilize their internal and external partners for their customers’ benefit. When a customer is asking you for advice on topics that don’t involve banking, you know you are approaching trusted advisor status with them.
  • Sustaining relationships and remaining engaged requires new communication techniques.
    People today are online more than ever and are often overloaded, so you need to meet them where they are when it comes to your marketing and sales approach. You have to break through the literal and virtual clutter. Vertical IQ is a great strategic tool to leverage for proactively providing clients with industry-specific insights and content via a number of channels (email, texts, mailers, in-person leave-behinds, etc.).
  • Be relentless; trust takes time and discipline around outreach efforts.
    Building an institutional mechanism that allows bankers to become trusted advisors to their clients takes hard work. You need dedicated channels like trained RMs, contact centers, and mobile solutions, etc. Your sales and marketing teams need to devise a game plan to deliver that relevant content that customers crave. And you must have a solid network of internal and external business experts to whom you can refer your SMB clients when needed. Mary Beth emphasizes the importance of staying in the customer’s sights even (and especially) when there is no immediate banking need.

What’s your 2020 game plan?

The next year is shaping up to be increasingly volatile, both financially and politically. Successful banks and RMs need to figure out a strategy that will prove to SMB clients that they can offer solutions that extend beyond just selling them bank products.

By working toward the five strategic imperatives that Mary Beth shared, including learning about the customer’s industry and sharing key insights with them, bankers can not only attain trusted advisor status with their clients, they can be better positioned to weather the economic unknowns that are on the horizon.

To see a full replay of this webinar, please email us.