How to Get A+ Quality Loan Growth at Premium Pricing.
While 80% of bank executives are listening to the hue and cry of their lenders—wringing their hands over the claim that loan demand has dried up—the top 20%, frankly, just aren’t buyin’ it.
These aggressive and enlightened 20% understand that they’ve never had more capacity for loan growth at premium pricing in their entire lives.
Why? Because not only is the possibility out there for tremendous loan growth, they also haven’t bought into the no-loan-demand story.
Here are seven mistakes that will really constipate your loan growth—now and in the future—and keep you from securing A+ quality loans at premium pricing. For many banks across America, A+ loans are the norm, not the exception. If you want to join them, avoid these blunders:
Mistake Number One: Expecting people with no sales capacity to be able to sell.
You can’t coach to improve height. People are the height they are. Likewise, some people are naturally inclined from an emotional-intelligence standpoint to want to call on prospects and bring in their business. It’s in their blood. It gets them juiced, it gets them jazzed, and they’re good at it. This characteristic is innate.
Of course this doesn’t mean that skillsets don’t matter and that learning to refine sales skills can’t drastically help someone who is already naturally inclined to sell. But it does mean that it’s really difficult to take a 4-foot-11- inch guy and improve his sales skills by screaming at him, “Why aren’t you 7 feet tall!” A different result just ain’t gonna happen.
That’s why the selection process of hiring into your sales team matters tremendously. And very few banks have done any of their homework in understanding that there exist emotional-intelligence tools which can help them hire the right people.
Mistake Number Two: Calling everyone. Dissipating energy is a huge problem for most banks.
Their lenders feel that as long as they are working, that’s all that really matters. But working smart is actually what really matters. The key is to convince your lenders that, instead of calling 3,000 business owners, there are really only 30 or so at a time that they should call and bring in as customers. And they should bring in ALL their business, not just part of it. This distinction is a very different mindset, and it’s backed by a very different set of behaviors, different discipline, and almost certainly, a different system than the one you have now. Just getting people into the right activity will help you enjoy a breakthrough in loan growth.
Mistake Number Three: Cold-calling.
Yes, we’ve all heard it that every good salesperson should be a cold-caller. But think about it: Do you really want your bankers to look like just another schlocky vendor—showing their wares and leaving their brochures? Is that really going to land you premium pricing plus all of that prospect’s business?
YOU wouldn’t buy that way, would you? So why should your prospects?
Instead, select the right prospects and warm them up though warming campaigns that give, give, give so much value that the prospect’s incumbent bank starts to look sick. You want these campaigns to solidify in the prospect’s mind that you’ve far exceeded the value their incumbent bank has delivered.
Only at that point can your lenders pursue the sales process.
Mistake Number Four: Sending people out with a commodity mindset.
One of the biggest challenges in banking right now is that salespeople are calling on folks, yet failing to bring in the business—because everything they’re offering can be found someplace else. They’re “selling” commodity-type products and services. It’s no surprise at this point that the only way salespeople can get business is by matching somebody else’s rate—an even worse scenario than not getting the business at all.
What can you do instead? Create a plethora of unique selling propositions…superior customer benefits. Then, build a sales process around each one—such that every customer or prospect can calculate the money saved or earned from each benefit. It should be so apparent that these benefits, savings and earnings far exceed—by multiples—the premium pricing that you’ll charge them, that “selling” at that point becomes a no-brainer.
Mistake Number Five: Buying into excuses.
The scariest thing I hear is a CEO giving excuses for why their people aren’t performing. I can’t help thinking, “That’s exactly WHY your people aren’t performing.” Only when I respond, “Thank you for sharing”—then press the CEO to tell me how they can get things done—does their bank begin to change.
When you realize a lot of the banking population is claiming that loan demand has dried up, you can begin to take advantage of the fact that other bankers are sitting around waiting for somebody to walk in the door. While they’re making excuses, thinking loan demand is not going to recover for a while—you can be out there hustling and bringing in all of their best customers while they are sleeping through that whole thing. Loan growth is all about mindset—and helping your people understand that you won’t buy into excuses.
The opposite side of excuses is results.
Mistake Number Six: Measuring results only.
You’ve heard it. You look at the total volume of loans closed and that’s the one result that is being discussed, when in fact that is a historic data point. You need data points that are actually input data points to make sure that your next history looks far better.
By not measuring the inputs, most banks end up having really bad outputs. That’s why everybody needs to understand the critical drivers, the number of aces achieved with your Top 100 prospects, the number of aces with your Top 1000 prospects, the dollars in the weighted funnel, the number of calls made to Top 100 prospects, and the cross-sales to current clients that are in the Top 100 best prospects. Those are the kind of measurements that move needles like net interest margin and closed business with A+ credits—and move them quickly.
Mistake Number Seven: Hoping.
Hope is not a strategy. Measuring, coaching and celebrating as a pattern and a way of being is the only way to get to a positive end result.
While most banks think sales training is their answer, nothing could be further from the truth.
In fact, in 23 years of working with high-performing banks (and even transforming banks from near closure to the #1 or #2 performer in their state), I’ve seen repeatedly that those executive teams who do achieve substantial differences understand that their job is to measure, coach, and celebrate…measure, coach, and celebrate…measure, coach, and
celebrate. They understand that management is an activity and a process that ties together culture, strategy, marketing, critical drivers, coaching, leadership development and management development.
And whenever bankers fail to focus on those activities—thinking that sales training alone will do the trick—they find out in short order that results from sales training have never happened and sales training has never worked…not even once.
Hope is not a strategy. Having an actual strategy is. And a system to support the strategy is the only way to create a huge, profound, and sustainable turnaround.