in a buyer’s market, where there are almost as many banks anxious to provide them with funds and services as there are accounts to be serviced. As a result these large accounts with a high credit standing can command the finest rates for lending and other services.
As a consequence many banks have turned their attention to the ‘middle market’. Here too, however, the bank which provides nothing better than an average service will find that competition is intense and profits difficult to achieve. It is important to remember that for banks operating abroad or outside their normal territory most business must be won from indigenous competition by finer rates, superior service or some combination of these two factors. Banks that rely on price alone, however, to win business are unlikely to hold it in the long term unless they can maintain a superior cost of funds position, which will be extremely difficult.
Within each market proposed for expansion as part of the overall bank strategy endeavor to establish an attack order for your accounts for preliminary prospecting. This can usually be achieved by ranking the potential prospects in three or four dimensions drawn from the basic account data such as size, growth rate, capital intensity and competitor lead banks.
Having ranked potential prospects, assign these to the available account officers.
account development will be for account officers to identify the structure of the potential client’s treasury and recommend an appropriate calling prog¬
ram, making use of tiered calling involving senior bank management as appropriate.
Because of the high cost of account officer time, and despite the initial screening process undertaken, it is still better to try to improve your chances of successful account development by using warm lead contact techniques rather than cold calling. Accounts which do not respond to warm lead techniques can be approached completely cold if it is felt essential, but a failure to respond to such techniques usually indicates the account should be recycled back to the screening data base. Such warm lead techniques include:
1. Referrals Generated from a wide variety of sources including bank customers, other banks, bank suppliers, etc.
Many such referrals are random and come without solicitation. Such referrals should be checked first of all by a telephone call to see whether a personal call would be welcome and worthwhile.
Referrals can be actively solicited from all sources. Internal bank cross-sell¬
ing can be one of the most rewarding business development areas. Most banks study contact lists for other subsidiaries/branches, etc., but carefully designed cross-selling programs are unfortunately rare.
2. Corporate advertising Financial service advertising to the corporate market has been growing rapidly.
Most such advertising seems poorly planned and conceived, badly aimed, lacking impact, and unsure about what it is supposed to do.
Advertising, even to the corporate market can be useful as a means of lead generation for:
— general image and awareness generation;
— attacking specific segments, e.g. small business, vehicle fleet oper¬
ators, etc.;
— promoting particular products or services.
Advertising lead generation should be carefully monitored and checked to assess its value:
— check how many responses;
— check changing awareness level;
— check enquiry/conversion ratios;
— check media variation.
3. Mail shots Mail shots skim the market and although response levels are low they can be used to identify likely warm prospects.
Many mail shots are seen as ‘junk mail’ and never reach the person intended.
They should therefore appear personalized, not as a bulk production.
Always try to address an individual by name; never just refer to the company.
Mail shots can be very selective in terms of product, customer group, time, geography, etc.
They can be used to spread news quickly.
They can be used to cover market prospects for which the business development executive doesn’t have time and as a foil to competitors.
Mail shots should contain news. However, brochures should be used carefully, because if you put too much information in the prospective customer’s hands he may decide it’s not worth meeting you.
Covering letters should cover no more than one side of paper. Ideally, such a letter should consist of four paragraphs:
i) State its objective: ‘I am writing to invite you to a special meeting of exporters to Eastern Europe at the Grand Hotel on March 8 at 11.30 am with lunch to follow.’
ii) Show why the topic is relevant: ‘This meeting will give details for the first time of our new acceptance credit facilities for Eastern bloc trade and our new money transfer service which speeds money flows from Eastern Europe.’
iii) Show why the topic is especially interesting to the letter recipient: ‘We feel that with your growing trade to Eastern bloc countries these services can help increase your exports and speed up your cash flow from these countries.’
iv) Restate the objective: ‘I hope therefore you will be able to join us at the Grand Hotel on March 8, and I shall telephone you next Thursday to confirm your place at the meeting.’
The mail shot should indicate the action you intend to take. Only in exceptional circumstances or when you know you will get the answer you want should you leave the recipient to take action and reply.
Mail shots should be sent out at a rate at which the necessary follow-up can be handled.
4. Seminars and demonstrations All products and services really need to be demonstrated to gain conviction and acceptance — the more difficult the product or service is to demonstrate, the more important it is that a successful demonstration is made.
In banking services, to generate leads, new products and services can usefully be introduced by seminars and demonstrations. Those attending clearly have an interest and a successful demonstration provides prospective customers with a very high probability of conversion.
Relative to the cost of personal calling, seminars and demonstrations are very cheap. If your expertise is really credible they can even become profitable in their own right. Indeed, look actively at charging for seminars in specific subjects: a free seminar will often bring the wrong person whereas a paid-for seminar in a pleasant location may be an excellent opportunity to attract senior treasury managers. The use of existing customers employing the bank’s service as speakers at such seminars is particularly useful provided such accounts are themselves appropriate and/or prestigious.
Seminars and demonstrations require considerable effort to set up and professional presentations are important.
Demonstrations at existing customers’ premises also add credibility.
Prospective customers can see how the product or service works in operational conditions and can talk to your customer about problems and advantages.
5. Telephone calling The telephone can be used for many purposes. It is far cheaper than a personal call, enables you to cover substantial numbers of customers quickly, and can be used to substantially improve your probability of business development success. The telephone can be used for:
— setting up appointments for new, follow-up and user calls;
— extending invitations to seminars, demonstrations and social events;
— confirming dates and times of meetings;
— seeking information;
— keeping in touch with existing customers and potential problems.
The telephone is by far the best way of seeking an initial appointment unless the appointment is overseas. If your contact won’t talk to you on the ’phone the probability of success is so low that you should either try another contact at a higher level in the company or try another company.
Always retain the initiative on the telephone. If your contact is not in, make sure you telephone back at a time you know he will be in. If he is in but asks you to call back, try to set a provisional appointment with him which it is his responsibility to break.
Don’t give away too much information on the telephone — it offers the customer the opportunity of saying there is no need for you to call.
Make sure you speak to the person you want. Do not be sidetracked by secretaries or telephonists.
The objective of a first telephone call is to arrange a meeting. Offer a benefit, sound interesting and commit him to action.
Keep the initiative in arranging the meeting. If your initial contact is not the decision-maker or key decision influencer get him to give you an introduction and arrange a meeting with the decision-maker.