There is a crisis of trust between small companies and their Bank. 74% of small businesses don’t believe that their Bank understands their business and, worse, even cares about them.
[pullquote]Does a whole generation of relationship managers simply not care?[/pullquote]
And the gap in understanding isn’t getting any narrower; in a recent survey of corporate CEOS 80% confidently believed their companies offered excellent service. Only 8% of their customers agreed.
[pullquote]Those who seek a sustainable relationship with fast-paced small businesses need to demonstrate that they understand their business and care about it[/pullquote]
This is a crisis. The small business market represents the key area for growth globally. There are 5.2 million ‘SMEs’ in the UK alone. Banks who want to retain their share of that market need to act fast to transform how they approach the market.
“We made a decision to invest in the people, not the product,” says the head of a UK Challenger Bank. “In recruiting relationship managers we looked for people who were good listeners and were patient, who were willing to understand the needs of the business. We attribute our 700% growth to the relationship approach not the products or the price”.
Yet most UK Banks don’t seem to have really got the message. In interviewing mid market CEOs, positive stories of banking relationships are rare. As one CEO explained “we recently acquired a business and needed new banking facilities. We interviewed a few Banks. I was shocked. Only one stood out; they came at it from a different angle. They weren’t interested in where we were now. They were interested in where are you going? What’s our next move?”
In other words, they took the trouble to understand the business and demonstrated that they cared.
Another CEO was blunt in his exasperation“Here’s what I don’t understand…. The first thing I would do with MY client is to actually understand their business!”
So, what’s the problem? Does a whole generation of relationship managers simply not care? It hardly seems likely. Instead, in our experience, it’s simply down to how corporates train and reward their people. To turn this around requires a radical rethink of how their people understand small companies. The alternative is to watch as ‘challenger’ businesses that understand this steal this lucrative market for good.
Put simply, those who seek a sustainable relationship with fast-paced small businesses need to demonstrate that they understand their business and care about it. And that requires two distinct, and currently generally poorly developed, skill sets.
[pullquote]CEOs of fast-paced businesses crave thought-provoking conversations, perspective and real challenge.[/pullquote]
The first is a range of human intelligence, listening and coaching skills. Rapport is not good enough. To be effective, client-facing teams must have the skills and emotional intelligence to step into the client’s shoes. As one CEO said “The best relationships are when the advisors are solely looking at things through my eyes.”
Secondly, the relationship manager needs a much more holistic and strategic set of business intelligence skills. Without those he or she offers little value and will probably default to a product conversation. CEOs “hate dealing with companies who are trying to sell a product”.
In fast-paced businesses, CEOs don’t care about products and propositions and are not much impressed with ‘rapport’. What they crave are thought-provoking conversations, perspective and real challenge. That is what creates the greatest value. As one CEO put it “good relationships challenge my thinking. You’re never going to get anywhere if you don’t challenge your client”.
And that takes the kind of broad business knowledge and confidence totally lacking in most relationship managers.
So, what’s the answer? Recruit MBA students? Send all of your people back to college? Not really. Quite apart from the cost, most MBA and business programmes don’t address the reality and experience of running a real private business. What is needed is a business education programme designed by entrepreneurs and delivered by entrepreneurs; a programme that teaches corporate relationship managers how to engage with business owners emotionally and how to offer real business challenge and perspective.
Frustrated by their experience of relationship management, a group of entrepreneurs set out to design and deliver just such a programme. And the results have been remarkable. In research on 600 global banking relationship managers who had experienced just a two day programme (with on-line learning support), 95% had won business from new customers and, remarkably, 93% had uncovered significant new business from existing customers simply by learning to asking the right questions.
These results have been replicated again and again around the world. The impact on the relationship between Bank and client is profound. One banker reports clients asking ‘have you just been on an MBA?’ as a result of his new skills. Another reports on the impact on his relationships ‘I would describe in one word the effect of the programme as ‘MAGICAL’.
And this success is almost universal with relationship managers commonly reporting clients emailing them to say ‘that was the single best meeting I have ever had with a Bank’ or ‘this is first time I’ve ever experienced a meeting like this with a Bank.’
And the impact on the confidence and enthusiasm of the RM is just as profound. Managers are left enthused by the programmes which, because they are delivered by entrepreneurs, regularly score an NPS of 100. As one banker said ‘this is the best programme I have been on in my working career’ and another ‘this has been mind-opening, game-changing, I have so much confidence in myself’.
In an age when barriers to entry have never been lower and challenger businesses are rampant, 74% of customers feeling their Bank doesn’t understand or care about them is unsustainable. We’d love to show you how some simple human intelligence and business education can turn this around for your business and transform the effectiveness of your relationship management teams in the SME market. Do please get in touch.