Case Studies

Leadership in Action

Speak Their Language

We were meeting with a small regional bank in Lubbock, Texas, to sell our product. Our bank sales were okay, but not stellar. We knew that so we were always making modifications for improvement.

The week prior, I had visited one of our small bank customers in Eugene, Oregon. The President of the bank invited me to play golf at the one of the oldest, most beautiful country clubs in existence. Over lunch, I told him it was rare for a bank executive to be so interested in our product since it was ancillary to the bank’s primary services of deposits, lending, and treasury management. He smiled and said, “I am interested because it adds to our ROA, ROE, and it lowers our cost of funds.” Then he explained why that was true.

[ROA is return on assets and ROE is return on equity—two important measures of financial success for banks.]

When we walked into the conference room of the regional bank in Texas, the CEO, CFO, COO, Sales Director, Marketing Director, and a few other team members were present. Since we were constantly making modifications to our presentation to improve sales, and I had asked the right question to learn why they were interested, we had added to our sales pitch the effects on ROA, ROE, and the cost of funds with charts and graphs, rather than words.

When we got to that portion of the presentation, the bank President stood up, pointed to our graph and said, “If they can do this, they are the team.” A week later the bank became a new client for J.P. Morgan Chase.

Three take-aways from this experience:

Translate your product or services benefits into terms that are important to the business.
Don’t tell them, show them. Put the product in their hands. Use graphs and charts. Telling prospects about your product or service should always be secondary to showing them.
Continuously look for ways to improve not only the product or service, but more importantly the messaging.

Expand an Offering

Revenue from one of our bank clients in Indiana was slightly dropping off, so I traveled to meet with Lisa, the Director of Merchant Services, to walk her through our products and services to see how we could improve. Seated across from her in a small conference room, we spoke about the bank and how well they were doing in their market. The bank was enjoying double digit growth in deposits and all was well from her view.

When we got to our products and services, we did not get very far before she leaned forward and slammed her hand on the table. In a quiet, calm voice she said, “Terry, you don’t get it. I don’t want any more business!” I was stunned. Shocked. I could not believe what I just heard. It made no sense.

As I searched for the right words, we both just sat looking at each other in silence. Finally, I asked a simple question. “Why? Why don’t you want more business?”

Lisa then pointed to a stack of papers about six inches high and said, “These are competitor statements from our customers who want to move their merchant business to us. I have not reached out to any of them. I don’t have time. As you know, I am multi-hatted with responsibility for Treasury Management, Debit Card Issuance, Lock-Box, and Merchant Services. And guess which one is on the bottom?”

I thought about it for a moment. The merchant services business has very complex pricing and small banks often struggled with it. This could be a bigger opportunity than just this one bank. I said, “Lisa, what if we went through the competitor statements and put together offers that you could then present to your clients?” She loved the idea. This quickly became a new offering with incremental revenue.

Two lessons learned:

You really need to understand your client’s world. Look at the business from their perspective. The more you do, the more likely you are to uncover other opportunities.
“Why?” is one of the most important questions you can ask. It uncovers motivation and intent.

Laser Focused Sales

We were assigned to lead Prism, a wholly owned subsidiary of J.P. Morgan Chase. Prism had just ended the year with revenues of $9 million and expenses at $13 million. Losses were mounting. The situation was desperate. We had to pivot smartly. We did, and a few years later, we were managing a book of business with $138 million in revenues with 46% margins.

One of the first things we did was fix sales. The sales team was not meeting goals. When we met with them, we found they understood the value proposition, and they had a great pipeline of prospects, but they were not signing deals. The problem was the sales team was getting pulled into customer service with existing business. Once sales signed a bank, they helped with integration, training, and resolving issues. In short, they were doing sales and client relationship management.

Also the compensation plan did not help the situation. The sales team’s salaries were high relative to commissions, and commissions were based on what the sales person projected revenue to be versus actual revenue. There was supposed to be a true up between forecasted revenue and actual but the true up was not happening.

The sales team was spread around the country so we brought them all together to explain the changes that must occur for us to be successful. That meeting was pivotal and critical for our future success. At the meeting, we covered three things that we knew were vital to our future:

The overall goal
Separating sales from service
Enhancing the sales compensation plan.

The overall goal. The overall goal was to help the team understand the big picture. We were dealing with a loss of $5 million. Our strategic goal was to turn things around and get to breakeven quickly. That may not sound very ambitious, but we were digging out of a big hole. We showed the numbers. Sales were flat so we were not outpacing attrition. Not a single sales person had made their sales goal. If people understand the big picture, it helps them accept change.

Separating sales from customer service. We explained that we had customer service teams that were ready and willing to take care of the bank once they were signed. We wanted the sales team to be able to focus solely on sales. So we brought in members of the customer service team who spoke about what they were doing for our client base. They explained how the service efforts by sales people were actually creating problems. For example, actions by sales were not logged into the customer relationship management tool so there was no record of what was done. The sales people were not always up-to-date on the latest procedures and inadvertently gave the clients wrong information.

Enhancing the sales compensation plan. The comp plan drives behavior. We cut their salaries and raised the commissions significantly. No one likes a salary cut. In fact, the initial response from sales was negative until we showed them that they could actually make 25% more under the new plan. Our strongest sales people were eager to get started under the new plan.

It worked. Once sales got focused on sales, and we were off to the races.