egyii blog

The following is an article from the Singapore Business Times, January 13, 2010, written by the Managing Director and Head of Private Banking Southeast Asia and Australasia for Credit Suisse, Dr. Francois Monnett.

He gets it, but do they really “walk the talk?”

Retaining clients, rebuilding trust

The sustainability of the private banking business model comes under scrutiny in the wake of the massive industry shake-up. In the aftermath of the massive industry shake-up which has taken place over the last 18 months, we are confronted with a very different operating landscape in private banking. Together with a significant loss of trust and confidence in the markets and industry, clients are also expecting higher standards of service and advice, as well as greater transparency and disclosure over products and services. There is also a shift towards safer, simpler and more liquid investment solutions.

One major implication is the critical question of the sustainability of the private banking business model. During the boom period, many institutions built their private banking model primarily based on the assumption of continued growth and perhaps a certain belief in its immunity to economic cyclicality. The infrastructure that many private banks have put in place to deliver value to clients and the fact that much growth has been built through expensive acquisition of bankers have also resulted in a costly model.

Revenue generation in private banking, particularly in the Asia-Pacific, has been very much volume-driven with a heavy reliance on a sales culture. With slowing revenue generation and increasing cost-income ratios in the past 18 months, the sustainability of this business model has been seriously tested. Much of the pressure is also coming from outside, namely from regulators and clients, that will propel the industry towards more radical and dramatic changes to the business model.

In the rapidly changing regulatory environment, investment suitability is here to stay and investor protection will become an even more important dimension in this business. There is also a lot of discussion on offshore banking, capital requirement and bankers’ compensation.

But the most important driver for change is the disillusioned clients. There has been a significant loss of investors’ trust and confidence in the markets, in regulators, in the financial institutions as well as their advisers. We have also observed among clients a flight to safety and quality, a shift from risk aversion to loss aversion, and a back-to-basic type of appeal for more direct and liquid investment vehicles.

Very importantly, there is a much greater need for transparency and disclosure. This is not just about the products, but also the service levels that clients pay for, fee structures, performance of their investments, as well as transparency regarding business partners and counterparty risk.

Client segmentation

For private banks to reclaim and reaffirm their critical status as trusted advisers, we need to enhance our value proposition on a few levels. First and foremost, we need to focus on client segmentation and differentiation to significantly lift service levels.

To put the client at the centre of a segmentation strategy is the only way to avoid the ‘one size fits all’ approach, which doesn’t work to lift service levels. This requires a disciplined, systematic and structured approach to defining client segmentation that goes well beyond assets under management. It has to consider the source of the client’s wealth – is it inherited or built? It has to consider the investor’s behaviour – is he or she a delegator, a participator or self-directed?

We also need to understand better the investor’s knowledge, experience, sophistication as well as domicile. Once these dimensions are clearly mapped out, the resulting value proposition has to deliver a tiered service offering in a disciplined and consistent way that will define different access to product specialist or management as well as the depth and breadth of the service offering.

Eventually, we will be measured as well in terms of the level of transparency and interaction we achieve with our clients. Risk management has to be an integral part of the advisory process and an investment suitability framework is the ultimate transparent guide to portfolio construction.

This involves the profiling of clients – the detailed and structured assessment of their knowledge and experience vis-Ã -vis the complexity of the portfolio solution, and their risk and loss tolerance. This profile is used to build a portfolio which is simulated in terms of asset allocation and is fully disclosed to the client.

Consistent client experience

The private banking business is all about execution. We need to deliver on the promise of being a trusted adviser in a consistent way. A major pre-requisite for a consistent client experience lies in the bank’s IT-based processes. From the relationship manager (RM) accessing an open architecture platform with thousands of solutions for the client, implementing a common advisory process, to utilising portfolio construction tools that build asset allocation against the client’s profile and analyses of risk scenarios – this level of consistency can only be achieved through a control process.

The re-engineering of processes is critical not so much for productivity gains, but has enormous impact on how much time the RM is able to spend with clients and the quality of the client experience. A recent study shows that RMs spend as much of their time marketing services to new clients as solving and dealing with administrative matters. If we are not able to free RMs from the loss in valuable client-interacting time, we will not live up to the promise of being a trusted adviser.

From a client perspective, there is also a constant request for better, more consolidated and comprehensive client reporting. They also want more direct access to almost real time data through client portals.

As private banking continues to grow in the Asia-Pacific, automation, IT systems and the re-engineering of processes will increasingly become the backbone of the business. How good a bank’s infrastructure is will be the cornerstone in delivering quality client experience. It will optimise relationship management time with clients and ensure a culture of consistency throughout the firm.

Re-skilling of RMs

If we want to differentiate ourselves in terms of providing an advice-centric operating model to clients, we will also have to consider the extent to which we need to re-skill our RMs. The permanent education of RMs is of paramount importance. Particularly in Asia-Pacific where the industry is still young and fast-growing, there is an immediate need to make sure that the culture of a firm is being consistently instilled into the new joiners that all bankers interact with their clients through a consistent and structured advisory process.

Eventually, as front organisations continue to expand, we also need to enable RMs to grow in their roles over time, from a junior level adviser, to an expert RM or a manager and leader. This requires a long-term, modular and state-of-the-art training curriculum and development model that captures the career cycle of each RM. It is also important to align reward systems with the clients’ satisfaction. When we measure performance, we need to focus not only on ‘What financial performance did you achieve?’ but also the ‘How did you achieve it?’ metric. This softer side of performance measurement has to be benchmarked against the values of the bank and how it wants its RMs to run the business, and against the client’s satisfaction. This will involve tracking the degree of adherence to the sales and advisory process, risk management tools and control standards, as well as client satisfaction surveys.

This greater alignment is a condition for regaining and earning more trust with our clients in the new landscape, acknowledging the new landscape, refining and sharpening the value position and eventually delivering on a bank’s brand promise.

Trip Allen, Team Egyii, Singapore

It’s not about you.
It’s all about them.
Your clients, that is.

Building personal relationships (which enhance your business relaionships) requires a dialogue, and a dialogue requires great questions.

The dialogue then needs to be  focused on the client, not you.

Great relationship building questions are better when they are not formulated for an immediate business result. You don’t need to “close” all the time with questions. You do  need to be honest, open, straightforward and trustworthy in your approach.

Many people have formulated numerous questions to create dialogues; here are the ones that have worked best for me.

Examples of Questions

How are you measured and what are your KPIs?

Tell me something about you and what you have done in business or your personal life that will surprise me.

What book(s) are you currently reading?

What do you do outside of work? What are your hobbies and interests?

How did you come about getting to your current role?

What frustrates you the most in your business today?

Tell me something about your company that I probably don’t already know (assuming you have already your research on the Internet)

There are many more questions that you can formulate on your own- work with whatever you are comfortable with.

Tip 1: Ask questions in areas where you may have similarities with your prospect/client (such as the area you grew up in or schools you attended) to build a common ground-this  is a lot more powerful.

Tip 2: It never hurts to preface a question with ‘Do you mind if I ask you…?” This gives you permission to ask and makes the prospect/client more comfortable.

The timing needs to be perfect on your questions to ensure sensitivity. You may not want to ask some of these questions on your first meeting- do it when you are comfortable. Keep in mind that you are trying to connect emotionally- so many business questions are based on logic, and so many business decisions are based on emotion.

Why are these great questions? They are not too personal and not overly business like. They bridge the gap between the two and can open up further conversations and build a stronger relationship.

Where to use these questions? You can use them to start off the conversation when you first meet and greet, or on the second or third meeting - whatever you are most comfortable with.

I also recommend you use them to set the tone for a lead into something like, or similar to, Trusted Advisor Associates’ ELFEC or whatever your sales process (Huthwaite SPIN, Value Selling, etc) suggests. They set a good tone.

Great questions, when done sensitively and when focused on the client, work wonders.

If you have any you want to share that you have been successful with, please do so by commenting.

 Trip Allen (Happy New Year!), Team Egyii, Singapore

 (A true story)

Successful.

Uneducated.

Wealthy.

Four priority bank accounts.

Four banks.

Four different Relationship Managers.

There is a fifth bank that also wants his business.

The fifth bank will get his business- if they do it right.

Why and how?

This particular “prospect” is an acquainance of one of the bank executives. The prospect is open with the executive, shares his personal life, discusses business matters and financial matters, socializes regularly with him, talks sports and even shares aspects of  his social life. He respects the bank executive for his knowledge and there appears to be no threat. He is comfortable with the relationship. They are friends. 

Interestingly enough, the bank executive is not a relationship manager- he is not in sales.

How does the bank executive do what is best for the bank, and “convert” this into a sale? That is the dilemma.

Clearly the “prospect” is an unsettled man. He has new-found wealth and is somewhat leery of the people around him. This is probably why he spreads his wealth between four banks and four relationship managers.

How many times have you come across this or a similar situation to this?  A situation where there is a bond or relationship between a client or prospect and a non-sales related executive? From my experience in my days of technology sales, quite often the relationship was between the client and the sales engineer. Is that because there was no “threat” from the sales engineer? Was he providing more value? Was he not chasing the sales for the close?  Most probably.

So why is this happening and why does it happen? And how do we turn the banking scenario around and turn it into a “sale?” I will let you figure that out on your own.

For related articles (and for a clue to why this may happen) see:

Two Simple Keys to Success in Sales

Want to Add Value in Your Sales “Process?” Try Adding Trust

The Agile Mind of a Salesperson: Motivation

Trip Allen, Team Egyii, Singapore

Tough times require resiliency, especially in a cut-throat business like insurance. Your company’s branding, name and reputation, products won’t do it. It’s all about your people.

With pressure from the economic downturn, a large Singapore based insurance company needed their financial planners to deliver every time.  However, the financial planners were not getting the right support they needed from their direct management. Read how Egyii’s Andrew Sidwell helped turn the situation around. Coaching for sales performance

Andrew Sidwell, Team Egyii, Singapore

No longer can global or major accounts programmes rely on decisions being made in mother countries. Decisions now need to be made on a local, Asia Pacific level, whether it is in Sydney, Singapore, Hong Kong, Mumbai, Shanghai or Tokyo.

And no longer can account teams rely on relationships alone. They must also add value.

Adding value means understanding what is on the mind of the client and giving them the tools to meet their personal and business goals. It’s not all about bits and bytes, bandwidth or speed or bells and whistles. To meet the goals, it’s all about understanding their problems and where they are in the decision making cycle…and being sensitive to that.

Neil Rackham, of Huthwaite and SPIN, was not a salesperson, but a behavioural psychologist. He studied how buyers bought and did not focus on how sellers should sell. He built a simple yet powerful tool to understand the buying cycle, or decision making process. He added sensitivity to the buying cycle.

In the buying cycle, there are multiple stages..changes over time, recognition of needs, evaluation of options, resolution of concerns, decision, implementation. No matter where you enter the buying cycle, you need to work (by continually adding value) with your client until he enters the “recognition of needs” area. This is the crucial time to be side by side, collaborating with your client to build the solution. (Rackham  also recognises that all of this takes time, so focus on medium-long term, not short term).

Once you are at the recognition of needs phase, you should understand how the client makes the decision.

What motivates him to buy?

The client (or buyer) typically has four levels of questions when it comes to the question of motivation when buying:

1) The product and its characteristics/features

2) A solution to the problem

3) A good business partner

4) Someone we can trust

Buyers state that they want want the first or second and ocassionally the third. Most sales programmes/processes focus on levels two and three- focusing on identifying the buyers’ needs through consultative selling.

Levels one through three are rational and impersonal. The fourth level, a person we can trust, is far more powerful.

If you understand the buying cycle and ultimately what motivates your client when buying, you are one step ahead of your competitors.

There is a lot more to it than that for global/major accounts selling but understanding the crucial aspects of buying are vital.

*Derived from Trust-based Selling by Charles H. Green.

Trip Allen, Team Egyii, Singapore

(The author ran the Anixter Asia Pacific Global Accounts programme in the earlier part of this century. There are certainly a few things he did well but there are a lot of things he could have done better. He wishes he had known all of this then.)

How do front-line sales professionals (Relationship Managers, face to face sales, client managers, Etc) effectively connect through high impact conversations?

Challenges to achieveing great sales conversations

There is no doubt that achieving sales targets, regardless of how they are achieved, has become the principle means of measuring success in many companies around the globe, regardless of what they all say they do for their customers.

That then becomes the root of the problem.

From that, we have observed that many conversations with customers are often driven by the sales person’s self interests on the basis of a product promotion, the profitability of a product, the amount of commission or incentive the sales person will receive or urgency to hit a specific target, a business need to increase market share etc. regardless of whether or not that is the right solution for the customer. 

Essentially there is rarely anybody taking a look at the overall picture for the customer, or even conversational guidelines to ensure that sales staff work together in the customer’s best interests.

So how do we  connect effectively and maxmise performance?

There are many well established approaches to selling; relationship selling, customer value selling, needs based selling etc. to suit different business needs and the current economic environment. Terms may change, tough times come and go, but the best practices of having a quality conversation that focuses on the clients best interests versus the sellers to maximize sales performance is still regarded as critical to success.

This would apply to anyone who manages a portfolio of customers on a relationship basis rather than a transactional one and seeks to enhance their ability, knowledge and behaviour to deliver a meaningful sales conversation that engages the client and deepens relationships with both new and existing prospects.

What will make this work?

In order to make programme that changes the focus from “us” to “them” successful, frontline sales professionals people need to be able to:

Assess their own communication strengths and weaknesses and the impact they have on others

Adapt and respond to the communication style, drivers of emotional needs and life stage of their clients

Develop compelling value positioning statements for opening conversations with prospects and existing clients over the telephone and in person

Ask for and gather information using bridging statements and reflective listening techniques to identify opportunities to create value for clients

Summarise and align solutions to the customers’ true needs to establish greater rapport with the client

Keep the client engaged in the conversation when handling client uncertainty or resistance to opportunity

Demonstrate conversational closing statements to confidently ask for the business

For related materials please see:

Maximising sales performance and skills.

Building and rebuilding trust.

Andrew Sidwell, Team Egyii, Singapore

“We need to constantly be adding value to our client base,”  a comment said recently by a business leader in the South Asia territory for a major US medical company.

Yes I agree wholeheartedly. But how do salespeople and support teams add value?

Value add can be defined in numerous ways, for example…

Offering the best solutions to a clients’ problems

Support throughout the whole sales cycle- pre, implementation, post.

Overall by positioning the product, the comapny and the salesperson himself

…and more

Value add as defined  by Tom Reilly, who wrote the book Value Added Selling ….”the only differentiation that may exist in this competitive comparison could rest with the salesperson.  Two Fortune-100 companies surveyed their customers to determine how much value their salespeople contributed to the sale; they discovered that 35-37% of the value that customers receive comes from the salespeople with whom they deal. Value added salespeople don’t make sales calls; they go on job interviews with customers. They ask customers to hire them to be their personal representative with the supplier’s company.”

So Tom’s definition of value add  is the salesperson as the company differentiator. I agree.

But, building trust through trustworthiness is also a value add. How? By putting the client first.

When you put the client first, the client sees that you care about him and his interests and not just about pushing a product or service.

And, as Charlie Green says in Trust-based Selling “It is possible for selling to be a genuinely value adding, beneficial process for the buyer AND seller alike.”

You just have to align trust properly. And if you align trust properly, it will be your value add and the differentiator.

Trip Allen, Team Egyii, Singapore

The Connectors: How the World’s Most Successful Businesspeople Build Relationships and Win Clients for Life

 I was encouraged to read “The Connectors” as this fits hand in hand with our philosophy: It is all about the relationship. It also fits well into and has many parallels with trust and The Trusted Advisor programmes.

Maribeth’s reinforces her book and beliefs with loads of timely tips, exercises and stories to back it all up.

Deeper inside, The Connectors presents a five-step methodology that helps you build the kind of high-quality relationships that lead to lifelong clients, repeat customers, more business and endless referrals. The five step methodology is a follows:

Develop a “What’s in it for them” mentality

Listen

Important questions to ask that attract connections

Get the sale to close itself- soft sell tactics

Create a memorable experience

Inside, you’ll learn how to:

Stop networking and start truly connecting

Create loads of referrals and an army of happy customers

Become a “connector,” even if you’ve never been a “people person”

Find your social IQ—and improve it

Put relationship-building principles to work daily

Focus on others and reap the rewards yourself

Ask the right questions—and sell without selling

Differentiate yourself through the impact you have on others

Use speaking skills to develop relationships

In addition, The Connectors includes a wealth of valuable relationship-building technology tools, including tips on using software, the Internet and social media; smart strategies for keeping in touch; speaking tactics that really work; and self-coaching exercises that will change the way you develop relationships.

I contacted Maribeth and asked her why she wrote The Connectors. Here is her response:

“I wrote this book because I have the great fortune in my business to see some incredibly successful professionals use and cultivate relationships in their careers. In fact, in most cases, their ability to connect with others was the key determinent to success. I didn’t want to prove the business relationships were important, I knew that, I wanted to find out how they do it. I interviewed hundreds of CEO’s, entreprenuers and professionals for the book to find out the how to’s so we can all learn how to have even better and more powerful business relationships.”

Connectors is a very timely contribution to today’s tough time in business and relationships. I highly suggest it, whether you are old or new to the wonderful world of building important relationships through “connecting.”

To purchase, contact Amazon.com.

Trip Allen, Team Egyii, Singapore

Dealing with Damage Control

Salespeople often feel at a loss when faced with disappointed, upset or angry clients. As an example, a relationship manager in banking dealing with a client whose investments have “soured” in the current economic climate.

What happens?

As a result of these situations, salespeople in general tend to stiffen and panic either on the phone or face to face. This state effectively shuts down the thinking processes and they find themselves lost for words. Just when the client is looking for calm understanding and reassurance, salespeople send signals of discomfort.

Suggestions

You want to enable your salespeople to feel confident about dealing with disappointed clients so that their demeanour is appropriate for the situation.

You want to equip your salespeople with the skills to respond to challenging situations so that clients feel confident about continuing to do business with your company.

Both of these aims work together: by knowing how to respond appropriately to clients, your salespeople will feel more confident and present a calmer, more professional demeanour; and by feeling more confident, they will automatically send the right signals to clients thus reassuring them about your company.

How to Implement the Suggestions

In order to build the confidence, the salespeople need to:

Build confidence in themselves by managing beliefs about:

Themselves (the salespeople) – how they see themselves is critical in achieving confidence.

Their clients – how the RM’s perceive their clients, especially during a downturn when clients are feeling negative towards their suppliers or advisors, also affects their level of confidence.

How salspeople’s clients perceive them – the salespeople’s beliefs about how their clients perceive themselves determines how confident the salespeople feel.

Deal effectively with disappointed clients by:

Responding to negative emotions in a client through pacing and leading. Pacing is done by showing your client that you accept and validate their emotion by mirroring them. Leading is the practice of gradually changing one’s energy level and behaviour such as slowing speech, speaking more softly and changing posture and body language.

Listening for understanding followed by listening to decide if you want to do anything about what you’ve heard. If action is required, a series of questions will be necessary.

Taking responsibility and moving ahead to solve the client’s problem(s). This includes the necessary empowerment and confidence to make the client feel comfortable.

Overall Results

The results below will occur if you take the above actions.

Clients will experience being handled professionally and appropriately during challenging times

Clients will feel sincerely listened to, understood and their emotions and disappointments acknowledged and taken seriously by your company and the salespeople

Salespeople will have a greater sense of empowerment and will therefore gain satisfaction from increasing their capabilities in challenging situations

Your company or financial institution will retain more clients and will receive positive word-of-mouth

Your company or financial institution will stand out in the marketplace for having salespeople who are highly professional

For more information see building and fostering client relationships.

For more blogs on a similar subject matter see relationship management.

James Irvine, Team Egyii, Singapore

(I am have just come back from United States as we speak so this write up is timely. These are general comments on business and society in the United States, which certainly afffects the whole world,  as I see it today. )

Values drive beliefs and beliefs drive actions. Most of us are aware of this.

The Allen/Coolidge family (my relatives) followed three (amongst many) important personal, work values and beliefs:

The “Protestant work ethic.” The Protestant work ethic is “based upon the notion that the Calvinist emphasis on the necessity for hard work is proponent of a person’s calling and worldly success is a sign of personal salvation.” (Wikipedia) Max Weber, a German economist and sociologist, penned a book called The Protestant Ethic and the Spirit of Capitalism. He believed that the Protestant work ethic (under Calvinism) was the driving force for capitalism. Capitalism (whether you like it or not) has clearly brought America its success, wealth and abundance today.  An interesting article to read on thsi matter is Whatever Happened to the Work Ethic?by Steven Malanga of City Journal.

Honesty. “Honesty is speaking truth and creating trust in minds of others.” (Wikipedia) Speak the truth. Never lie. Honesty is so vital to my family values and beliefs, that, my Grandfather, as a state Congressman, quit politics due to his belief in the lack of honesty in government.

Loyalty. The definition of loyalty is “feeling of duty: a feeling of devotion, duty, or attachment to somebody or something.” (Encarta) Loyalty was and is used across the board for our personal/family and business matters. Unfortunately, the term “loyalty,” from a business perspective, has been diluted with loyalty programmes for repeat buyers. This is not loyalty- this is convenience  for the buyer. Real loyalty, like trust, is personal.

With these values and beliefs, all we Americans prospered and continue to prosper. We need to continue to lead in such manner.

OK maybe I am a little old fashioned. But a lot of these and other important values and beliefs have been diluted or lost over a short period of time (sometimes I even tend to sway off track).

Many influences around us have affected these values and beliefs including:

Our immediate surrounding personal and business environments

The need for instant gratification and results (short term Vs. medium to long term thinking)

Greed

Transactional based scenarios

Think of “me” vs thinking of “you” 

…and more.

I believe that working hard (and of course smart), honesty, and loyalty are important in our personal and business relationships. Let’s go back to basics. It certainly is a lot easier.

Trip Allen, Team Egyii, Singapore