Over the past several months, I've had the opportunity to speak with several leaders in the consumer credit and collections industry. In addition, I've scoured the 2021 TransUnion Consumer Credit Fore...
There is no doubt that financial institutions are feeling the economic fallout from the COVID-19 pandemic. According to a report published by CFO in Q3 2020, “For the 5,066 commercial banks and savings institutions insured by the FDIC, aggregate net income totaled $18.8 billion, down $43.7 billion (70%) from a year ago. Slightly less than half of all banks reported annual declines in net income, and the share of unprofitable institutions increased to 5.4%.”
This means financial institutions are currently facing the task of creating revenue streams that go beyond lending. However, one of the challenges—particularly for service-focused organizations like credit unions—is converting to a product-driven sales culture.
Making the transition from a 100% service focus to a culture that values the importance of product penetration and overall sales requires top-down buy-in and a new perspective on how offering account holders valuable products can truly be seen as a service. In this blog post, we’ll give you tips for fostering a product-driven sales culture that will help improve sales and increase revenue for your financial institution.
The Value of Creating a Product-Driven Sales Culture
When loan officers offer products and services to every account holder, the potential for non-interest income is increased—especially when sales and service are engrained in the institution’s culture and are not an afterthought.
Financial institutions are often reluctant to incorporate non-interest income products into their portfolios out of fear that becoming sales-oriented will drive borrowers away. However, when a sales and service culture becomes a top-down part of an institution’s DNA, offering additional products becomes part of that institution’s commitment to delivering exceptional service.
Instead of viewing product offerings as one-size-fits-all solutions aimed at increasing revenue, financial institutions can tailor their offerings to the individual, which leads to improved relationships and increased revenue opportunities. In a true sales culture, offering products is the norm, not an anomaly—and neither the loan officers nor the account holders are surprised by the open conversation about what products would benefit the borrower.
Identify Sales Potential in Your Employees
Evaluating your current sales staff will give you a good idea of which people in your institution have the aptitude to thrive in a sales culture. People who typically thrive in a sales role are great at active listening, communicating, and problem solving. Some other key skills salespeople tend to have are that they are persuasive, confident, and able to hear the word “no” without taking it personally or getting emotional.
Don’t Only Include Salespeople
Creating a product-driven sales culture involves more than just training salespeople. Traditional product-offering programs only focus on making salespeople out of the front-line lenders, but partners that believe in a sales and service culture expand that scope to everybody who has direct or indirect contact with consumers—managers, lenders, tellers—to ensure they’re all on the same page.
A sales culture is not made overnight or in isolation. It’s a continuous learning and coaching effort that becomes engrained throughout the entire financial institution over time and with strong examples from the top-down.
Turning Salespeople into Product Experts
Whether a loan officer is a true salesperson or not, it’s nearly impossible for them to close business if they don’t understand what a product is or how your account holders can benefit from using it. Knowing your products inside out will not only build a loan officer’s confidence but will also help increase the number of products they sell per household.
Being a product expert gives salespeople a sense of authority that they display through their body language, and account holders pick up on it quickly. It’s an age-old aspect of consumer behavior that will more than likely never change—we buy products (whether we need them or not) if someone we see as an authoritative expert tells us we need to. Plus, if your loan officers are knowledgeable about each of your products and their benefits, they will more than likely be able to see opportunities for cross-selling, thus, increasing the number of products sold per person.
Align with Knowledgeable Product Partners
Financial institutions can establish a product-driven sales culture by demonstrating consistent executive buy-in and educating all employees. Ongoing support from dedicated product partners keeps the culture strong while recognizing and nurturing the valuable relationships financial institutions have with their consumers. Having a product partner that deeply understands an institution’s goals and values is essential to maintaining its integrity and maximizing ROI on product offerings.
Douglas Kendall is a VP for Business Development in the FI space. Doug is primarily responsible for client relations, engagement, and sales surrounding SWBC's Financial Institution Group—a suite of risk and account management services designed for financial institutions that want to more effectively manage the way they interact with consumers.