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Economists are predicting loan activity to rise at a more modest pace in 2022 than we’ve seen in 2021. Blake Hastings, my colleague and former senior leader at the Federal Reserve Bank of Dallas, expects financial institutions to see the following lending patterns next year:
- Mortgage loan growth was still very positive in Q3 2021 but is showing signs of slowing from its record pace. The combination of higher interest rates and home prices is starting to affect demand and will likely continue into 2022. We should be looking at more normal home lending activity heading into 2023.
- Growth in commercial and industrial lending abated over Q3 and Q4 2021 but is expected to remain relatively healthy in 2022. We won’t see the strong growth in lending from this sector we saw in Q1 and Q2 2021.
- Now that savings from stimulus checks and other benefits are beginning to deplete, we’re going to start seeing delinquencies start to rise again. This does not mean we’ll see terrible levels of delinquency, but the level will begin to normalize from the historic lows of 2021.
The softening loan demand and tighter net interest margins expected in 2022 will create a greater need for financial institutions to rely more on fee and other forms of non-interest income.
This means financial institutions need to start 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.
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.
In this blog post, we’d like to share some tips for building a strong sales culture at your institution and motivating your employees to step up their sales games.
Tip #1: Turn Loan Officers into Product Experts
Whether a loan officer is a true salesperson or not, it’s going to be hard for them to close sales 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. 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.
Tip #2: Invest in Sales Training and Education
Educate your employees about your products, and they will educate your account holders. If employees feel like they are consulting or teaching customers about various offerings, they won’t feel like they are being stereotypical, pushy salespeople. This will require you to invest time and energy into education. Educate your staff not only about your products but also on the quality and value they have to offer.
Tip #3: Offer Incentives
Another way to get your staff excited about selling is to do it the old-fashioned way—incentivize them. Create an incentive program designed to reward those who perform, or, in this case, sell.
Nothing is a bigger motivator than getting a chance to earn a gift card or having your name prominently displayed under the title “Top Performers” on the break room wall. Offering incentives is a great way to show your top performers how much you appreciate the hard work they put in every day, and it motivates others to strive for similar recognition.
Tip #4: Align with Knowledgeable Product Partners
Ongoing support from dedicated product partners can help keep your sales culture strong while recognizing and nurturing the valuable relationships you have with your borrowers. Having a product partner who deeply understands an institution’s goals and values is essential to maintaining its integrity and maximizing ROI on product offerings.
For example, as an added benefit to our GAP, MMP, debt cancellation, and credit insurance partners, SWBC deploys our dedicated performance solutions team to host in-person and virtual training sessions for our partners’ lending teams.
Our performance consultants conduct comprehensive product knowledge training which includes techniques for overcoming the most common objections to purchasing vehicle and loan protection products. Through our impactful training course, UiMPACT Sales and Service, our clients’ lending teams are able to develop the ability, competence, and confidence to sell valuable protection products.
To learn more about how SWBC’s Total Solution can help your institution improve its risk management, payments, and income generation efforts, click the banner below!
Loraine Catlett joined SWBC in December 2009, bringing more than 20 years of training and development experience working for organizations such as Affiliated Computer Services, GE, WMC Mortgage, and Washington Mutual. As the AVP of Performance and Training for SWBC’s Financial Institution Group, Loraine leads a team of performance and training consultants who work with financial institutions across the United States. Loraine holds a bachelor of business administration degree in management from The University of Texas at El Paso. She is also a certified Corporate Trainer, a member of the American Society for Training and Development, and licensed in Life, Accident, Health, and HMO insurance.