COURTING SMALL BUSINESS BANKING PROSPECTS IS LIKE DATING!

BankersHub.com January 2015 Newsletter Page - 1 COURTING SMALL BUSINESS BANKING PROSPECTS IS LIKE DATING! By Julie Dunn Story Newsletter Article January, 2015 ABOUT THE AUTHOR Julie Dunn Story brings years of frontline experience in financial services to her role as Director of Product Management and Development at Pinnacle Financial Strategies. As Director, Julie oversees new product design and launch, along with serving as the Lead Business Banking Consultant. Prior to joining Pinnacle, Julie held a variety of executive positions including President of Business Banking Sales at BankAtlantic, SVP and Branch Administrator for Riverside National Bank, and President of Brevard County for SunTrust. She is a frequent speaker on how banks can be more competitive in the small business market. email: Julie.Story@pinnstrat.com ABOUT BankersHub BankersHub was founded in 2012 by Michael Beird and Erin Handel, 2 Financial Services professionals dedicated to educating and informing banks, credit unions, solution providers and consultants in the U.S. and worldwide. BankersHub delivers best practices, research insights, opinions, economic trends and consumer views through online web education, virtual events and conferences, live streaming activities, custom training and content development. Once again, small business banking is taking the stage and standing in the spotlight as a key area of focus for many community banks and credit unions. As senior executives look at current performance, loss of fee income and industry challenges, they are setting strategies for the months ahead. A key strategic focus is small business banking. Now, this is not a new target or direction, rather it is an area that many have targeted before, yet few are successful. Why is this? Small businesses are good targets. Average balances and service fees paid are higher than those generated by consumers, so why wouldn t you target them? They offer diversification for most portfolios bridging the gap between large commercial clients and retail customers. Why Small Businesses Fail to Respond Why have many who did target them not succeeded? In a nutshell, success has been elusive for several reasons: 1) Small businesses do not respond to traditional consumer sales or marketing approaches 2) Financial Institution employees with solid business development and calling skills want to go after the big opportunities not the small business prospects (who often cannot qualify for or don t need a business loan) 3) When most branch personnel try to go after small businesses, they try to sell a product rather than identify and meet the business needs of the owner 4) Financial institutions desire for a quick win and immediate results make it difficult or impossible to build a high performing small business program. When dealing with small business, it s important to remember several things: Theirs is a BIG business in their eyes They are busy and are juggling many things They don t care about you or your financial institution and your products all they care about is what s in it for me WII FM Small business owners want respect, understanding and appreciation They want you to share your knowledge to help them They want simplicity, more things done their way so don t waste their time!

BankersHub.com January 2015 Newsletter Page - 2 Connecting with Small Businesses So how do you reach small businesses and earn their business? You reach small business owners one at a time. Small business owners want a banker to help them. These business owners can be fiercely loyal to the person who is there for their business. Now the next question has to do with the definition of a small business. For mega banks, small business is often defined as those with sales between $3-5 Million. For Community Banks and Credit Unions this is an opportunity for you to reach business owners who are often neglected by the larger banks, while also reaching great targets for retail products and services. Consider defining small business as businesses with sales less than $5 Million more specifically those with sales less than $1 Million all the way down to start ups. What about small business products? Understanding what size and types of industry you want to target is an important first step, and then examine your products and services to make sure you are able to meet the needs of the businesses you intend to target. Most small businesses, as defined above, will need a competitive business checking account, debit card, online banking and bill pay. In addition, other product considerations should include: Payroll services, direct deposit for small business payroll, business credit cards, small business loans/lines (<$100K) and overdraft protection options. When considering your products and services, ask yourself why a business owner should bank with your institution over other available banking choices. Do you have an edge over the competition? While having the right products to meet the needs of small business is important, the products and pricing don t matter without the ability to reach prospects and build the relationship. And, building a relationship doesn t happen overnight. It is like dating! Think back to a time when you wanted to meet a special person! What was the situation? How did you make contact? Did you get an opportunity to meet with them right away? Did you ask for a date the first time you met or did it take time? Relationship selling is no different. We have to identify our prospects, do homework on the business, and find a way to get in front of the business owner, build rapport, understand the business needs and then recommend solutions. Just like dating this doesn t happen overnight. If we want to sell products to small businesses without taking time to get to know them we are merely pushing products or taking orders. While this approach may net quicker results, those results are rarely for the long term. Do you want to build long-term relationships with local businesses or are you okay with churn and burn? For the long-term, invest in building the relationship... a business courtship of sorts! So how is business banking sales similar to dating? What are the comparisons? Let s take a look!

BankersHub.com January 2015 Newsletter Page - 3 Getting Noticed: Meet someone; are introduced to someone; fixed up with someone (blind date); see someone across the room, in a public place, etc.; hear about someone that you want to meet OR Tell others the type of person you would like to meet and ask for helping finding that person; OR Set up a profile using an online service to identify people with similar interests and values. Identifying the prospect: Research local businesses; buy prospect lists; create a prospect list by driving your market or exploring your existing customer base; meet owners by visiting their business or attending events in the community; Ask for referrals; Use Mapquest to map and identify certain industries in your area; Enlist the help of your team to identify good business prospects. (Know who you want to go after and why. Also, know who you don t want to go after as well.) Do your homework: Learn more about the person you want to meet. What commonality exists between you (friends, interests, etc.)? Do your homework: Learn about the business, visit their website, look them up on the Secretary of State website, Google the business and the owners, and ask people you know about the businesses. The Competition: The Competition: Is this person already dating someone? Are they happy? What does your competitor offer in the relationship? How do you compare? What can you bring to the relationship that is different or better? Know your competition and understand their products and services so you can assess your strengths and weaknesses in comparison. Know Who You re Up Against: Is there an opportunity to earn the right to establish a relationship? Or, might you have to begin by just being friends? Know Your Products and Services: Know your own products and services inside and out. This will ensure that you can appropriately match those services with their needs when the timing is right. What Do You Have to Offer? What can you do, give or offer to add value to this person? Can you help them with their favorite charity? Do they have a need that you can fill (e.g. you heard they are having issues with their car and you re a mechanic willing to take a look). What s Your Value Proposition: Become the expert and be in a position to give value to prospects above and beyond banking. Share your value with prospects first. Don t just try to tell them about your financial institution and your products. (They don t care about either at this point!) Share information, or items that will benefit them.

BankersHub.com January 2015 Newsletter Page - 4 Getting a First Date: Obtain Appointment or Gain Permission to Meet: Utilize available resources to find and connect with the person you want to date; Ask a friend to set up a double date or blind date; make a plan to be where you know he/she will be; make contact with the person and ask for the date. Utilize available resources to connect with the business owners you want to meet. Do business in their store (if possible); find common ground (people who know both of you); ask for referrals; drop by their business to make an introduction; call on the telephone to request an appointment to meet. Remember: You need a compelling reason for this person to meet with you. Why should they accept your invitation? What s in it for them? If they don t see what s in it for them it is not likely they will accept your invitation. In this case, more time is needed for you to be exposed to this person in ways that will help them see potential value in spending time with you. Remember: You need a compelling reason for this business owner to meet with you. Why should they take time out of their day for you to stop by? What s in it for them? If they don t see what s in it for them it is not likely they will agree to meet. In this case, more time is needed for you to be exposed to this person in ways that will help them see potential value meeting with you. The Pick Up Line: Build Rapport: In order to get that first date, you may have to build rapport over time. It may take several encounters before you get the nerve to even think about asking for a date! And then there is the timing thing, if you ask too soon will they just say no? Then what? If you wait too long, will you miss the chance? Wow, this dating thing is challenging, un-nerving and scary. If they say no, rejection hurts! Before a business owner is willing to take time to talk with you or sit down and meet, you make have to work very hard to find common ground and build rapport. You may need to find ways to get in front of a business owner multiple times before he/she will give you the time of day. Playing Hard to Get: If you get a no, it rarely means no never ever, it typically means no not now (timing isn t good) or I don t know you well enough to say yes. (I don t see why I should accept your invitation.) If you do get the date, rapport is still a critical step needed for the relationship to grow. No Doesn t Mean Never : If you get a no response, remember no rarely means never ever! It typically means no not now, or I don t know enough to say yes! (I don t see value ( what s in it for me ) in taking time from my busy schedule to talk with or meet with you.) Are you serious about earning their business? If yes, don t give up!

BankersHub.com January 2015 Newsletter Page - 5 The Fine Line Between Persistence and Stalking: The Fine Line Between Persistence and Harassment: Knowing when to call or stay in touch with that special someone is an art. You want to be persistent, but you don t want to come across as a stalker! Finding that balance is important. Using a combination of telephone calls, visits, emails, texts, sending cards,candyor flowers can help you stay in touch without being over bearing, and at the same time gently chipping away at their heart! Sales is an art, not a science and managing contact or touches with a prospect is key. Balancing the fine line between persistence and harassment is critical. Some ask, what s the difference between the two? My thought is the difference is time. If someone says no today and I call again tomorrow, that might be considered harassment! If you get a no via telephone a next step might be to drop by, then mail something that is relevant or valuable to the business (e.g. trade publication article or newspaper clipping about the business or their family), etc. Bring value, build rapport and earn trust while listening to what the prospect is saying. This is the foundation for relationship sales. What Matters to Them: Identify the Need (pain / dream): If you make conversation and listen carefully you can pick up on clues that provide insight as to what is important to this special person. Understanding this will help you do a better job of identifying and meeting their needs. The more you are able to match what s important to them and blend it with what is important to you, the better you are able to build a mutually rewarding relationship. Where is the common ground? Do you have similar values? Do you enjoy the same sports or activities? Do you have mutual friends? Relationships that are mutually beneficial have a higher propensity to be a lasting and fulfilling relationship. If the relationship is only good for one party it is almost certain to fail or never really begin. Small businesses owners will consider doing business with you if it is good for them! Many bankers are comfortable talking about their products and services or handing out flyers/brochures that describe products or specials. Business owners, for the most part, don t care about products or services they care about what those products and services do to help them and their business. A key step in the sales process is the identification of a pain or dream. Understanding what a business owner deals with that he/she doesn t like or what they wish they had will help you position your products or services from their perspective, not yours. If you can help a business owner solve a problem or achieve a dream, they will likely want to buy! Being able to help a person see what s in it for them is the key to making the sale and building a solid working relationship.

BankersHub.com January 2015 Newsletter Page - 6 The Date (What, when and why): Determine / Recommend Solution(s): Understanding your areas of common ground can make getting a date that much easier. If you are offering something that you will both enjoy, there is a greater likelihood that you will get a yes! Once you think you understand what the business/owner wants or needs, then you can present the solution. This is your product presented as a benefit to them/their business, based on what they told you. The Response / Now What? Obtain Buy-in and/or Overcome Objections: If you don t get a yes (this is a natural part of the dating process!) you may need to clarify what is important to the special person. Understand more about why this person cannot or chooses not to accept your request for a date. Once you recommend a product or service that will reduce or eliminate a pain, or achieve a dream, the next step is to obtain buy-in from the business owner. This confirms that they agree your solution is good for them. It may be that they are not comfortable with you yet. More time needs to be spent building rapport and earning trust. It may simply be timing. They have another legitimate conflict. Maybe they are playing hard to get? It will take more time, effort and follow-up to earn the right to ask for another date. What is the timing? It depends. There are no rules, just process. Keep testing the waters. Oh, by the way objections can and will happen throughout the dating process and throughout life. They can show up in many forms. In all cases, remember to acknowledge objections. Clarify to ensure you understand the objection and explain where appropriate to ensure clear communication. Objections often mean that the other person doesn t have enough information. While objections can and will occur throughout the sales process, they often come up when solutions are presented. This typically means either the value of the solution isn t present, the pain or dream you thought you identified isn t on target or you have not provided enough information to allow the business owner to see what s in it for them. Handling and responding to objections is a critical skill needed to be successful in sales. At a minimum, acknowledgement of the objection is essential. Then, seek to understand the objection and clarify what is important to the business. Then, provide additional information or insight to better explain what s in it for them. Depending on the situation you may be able to overcome the objection and continue the process or you might have to build more rapport, listen and understand more about the business. Then, when the timing is right, make another win-win recommendation.

BankersHub.com January 2015 Newsletter Page - 7 Ask Them! This seems so basic, yet it is a step that is often missed in dating and in sales! Don t beat around the bush! If you want to ask someone out on a date ask them! Too often people mention an event or fun thing to do and don t followup with the question, would you like to go with me to the football game? Or Will you join me for dinner Friday night? Ask for the date! If you get an objection (yes, no thanks is an objection!), seek to overcome it! Yes, you may have to take a few steps back and build more rapport and do a better job of identifying what s important to this person before you get the date! Close the Sale! Asking for the business is a step often missed in the sales process. While it seems understood in many cases, it is not. Some say that 50% of customers will not buy unless asked! There are several ways to ask for the business including: just ask, assume the sale, provide a choice of two positive options or give a deadline for the offer to create a sense of urgency. No matter how you do it, be sure to ask for the business. Don t be afraid! If they say no, work to understand and overcome the objection. And, as needed, take a step back and make sure you are building a win-win relationship. Keep in Touch: Just because you got the date, doesn t mean you can stop calling. If you don t stay in touch that special someone will come up with their own reasons why you are not calling and the reasons will likely not match yours! If you really want this relationship to grow and last, staying in touch on a consistent basis is essential. Good communication can make a big difference in getting one date or building a foundation for the long term. Follow-up after the sale: Some people think the sales process is done once the sale is made. I completely disagree! The relationship is just beginning once the sale is made. Now, follow-up is critical to ensure that you retain and grow the relationship you worked so hard to obtain. What you do from this point forward will determine whether or not you receive referrals, references and cross-sales to the new customer! Just as follow-up is often neglected in the sales process, it goes by the wayside after the sale too. If you want to continue to be different and you want selling to get easier rather than harder, put forth a plan to ensure regular and meaningful follow up with customers. Try to identify problems before the customer does and bring solutions to them before they ask! Follow-up, follow-up, follow-up! It is the life blood of any relationship! Business development and dating have never been easy. It takes time effort and energy to identify the right target, then make contact, build rapport and set a foundation to earn trust. However, the results are worth the effort. What would you prefer? Take the business opportunities that walk in the door? Or go after the businesses that you want as customers? Do your homework, identify your target prospects and begin the process! It s just like dating!