Asset Based Lending
Chief Investment Officer
Commercial Loan Automation
BirdsEye Viewdust off your old bank-at-work program
The quest for deposits is in full swing, and community banks are not getting their fair share. Universal banks are leverage digitization and ubiquity to generate more than a SIFI bank’s worth of deposits quarterly. It’s time for community banks to dust off their bank-at-work program, leveraging localness and strong client relationships, and start adding more value to their commercial customers.
There are many names for this program, but the idea is the same: offer a banking relationship bundle, largely comprised of existing bank products, and sell it to commercial customers and small businesses to, in turn, offer it to their employees.
The benefits to the corporate decision maker, typically the HR executive, are many. Most HR directors of small and medium-size businesses find it difficult to compete with the benefits large hiring entities offer, from a cafeteria to a medical team on premises. Banks can help by creating a value-add package that will be perceived as a unique benefit to target employees.
Many banks have tried this concept and failed. They are reluctant to revisit it. Below are some thoughts on how to make the program successful through a mutually beneficial program to both client and bank.
All too often we task someone with the job of offering a product without specifying expectations. We assume that the branch network and others will spontaneously adopt this excellent product and sell it actively to customers and prospects. In reality, a clear goal creates motivation and focus around any product or program introduction. There must be a drive behind it, a corporate expectation and definition of success. Bank-at-work was typically introduced as something everyone should sell because of the obvious benefits it offers. Without the rigor and discipline of sales and pipeline management, these programs were doomed from the start.
You need at least one person whose future career depends on the program’s success. It is a necessary but not sufficient condition for any program success. Asking every regional manager to allocate 15% of their time to make this initiative succeed is fine, but it will not succeed without at least one champion and an executive sponsor.
Designing the product package isn’t difficult; it should simply bear in mind the main benefits employees and employers look for: simplicity and fairness. We often over-complicate the offering by adding bells and whistles which are valued by a small percentage of the target market. Bank-at-work product managers should bear that in mind. Offer real value and a fair value exchange between the bank and the customer, and it will sell if the sales process and the champion are aligned.
• HR is the buyer not the CFO
CFOs care about employee-oriented programs largely if they translate into dollars and cents for their company, something which can be done (see a later point). Successful hires are non in their job description, even if they benefit the enterprise. The HR Director, on the other hand, needs as many arrows in their quiver to compete with other hiring entities in their markets. Bank-at-work programs can improve their competitive hiring position as well as their book-keeping and MIS.
• Define minimum requirements for targets.
Not all companies are good targets for this program. Think through variables such as:
o Number of employees
o Blue vs. white collar percentages
o Employee turnover
o Worker seasonality
Develop your own set of criteria to create a hierarchy of prospects and then start calling.
• Get the CFO on your side through rebates based upon average deposit volumes.
While CFOs are not the buyers, their judgment carries a lot of weight in most organizations. You can create financial incentives to get the CEO on your side without sacrificing too much value for the bank. Offer rebates based upon deposit volumes to align your interests with those of the target company and CFO. It’s always better when you win together and lose together.
• Deliver through the branches but have a discrete sales force.
Leveraging the branch network is front and center on most bankers’ minds. While most branches have capacity, we ask too much of them when it comes to being the salesforce of most bank products. Their job is complex, our technology generally inferior, and our frequently-shifting priorities make it difficult to mobilize the branch network to achieve results.
With that in mind, asking the branches to sell Bank-at-work makes great sense, but not without a champion as mentioned above, and with the support of a few sales people who can assist in the sales calls and closes. It’s someone else’s job to focus the branch attention on this opportunity, which requires outside calling and professional presentations, often beyond the staff’s comfort zone.
Establish specific monthly employer and account goals to continue to grab the branches’ attention. Further, success should count against the branch’s own goals (yes, I’m advocating double-counting here) to enhance alignment and avoid channel conflict.
• Embed your program in the client’s employee onboarding.
Your best chance of success is when the client is hiring. Become a part of their employee onboarding and orientation process and integrate yourself into the company’s practices.
This is easier said than done when our own account opening process is so cumbersome. Simplify and streamline that as much as possible to facilitate acceptance and enhance process integration. Consider finding a way to separate overtime payments from direct deposit of base salary to deflect privacy objections on the part of some employees who prefer to keep their overtime payment and not add it to the household budget.
• Be present at larger employers at least annually, bringing fun and food with you.
I’ve heard of BBQ vans, ice-cream trucks and lots more splendid ideas to maintain the relationships and remind both employer and employees of your commitment to their enterprise. Doing fun things together always helps, and being on site with a delicious lunch during the short 45 minute lunch break is strongly welcomed.
• Customize page on employer’s website to link to the bank and “skin” using their logo.
Another tactic to enhance customer engagement is building a direct link within the employer’s website to the bank’s site. The link should mirror the employer’s colors and logo to show your commitment to their brand and enhance your identity as “their” bank. Plus, a link facilitates transactions, searches and overall engagement.
• “Lunch and learns” for overall financial education as well as specific savings targets.
Another engagement tactic is financial education “lunch-and-learns” that go beyond the usual curriculum. Help the employees to budget and plan for wedding, vacation, car, etc. It’s more fun to think through all the items you must buy for a skiing vacation, for the beach and even for a wedding. Incorporate the financial aspects with the social ones, down to the caterer and the wedding dress, to bring your point home.
• Add as a component to the RMs xsell goals.
Some banks set cross-sell goals for their commercial RMs. Add significant points, kudos and recognition to bank-at-work referrals to, again, align your interests and also give the RMs additional recognition for their contribution.
Much more can be said about the nuances of Bank-at-work. My point is, it’s an idea whose time has come, gone and come again. Revive the program, modernize it, and share with me your great ideas, products, tactics and marketing plans for this great deposit gathering tool.