selling financial services teb kosovo 2012
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Selling financial services
TEB Kosovo
2012
Helping you through the learning curve
R.J.Claessens&Partners 1
The purpose of the seminar
Provide you with a selling technique
and product knowledge 2
Roger Jean Claessens is an International lecturer &
consultant for the financial services industry.
• Professor at UBI (United Business Institutes), Brussels
• Expert lecturer for FEBELFIN (Federation of banks & insurance in Belgium)
• Expert lecturer for the EIB in Luxembourg
• Expert lecturer for BGL BNPPARIBAS amongst others
Author of :
• “Corporate culture in Banking”, 2011, Serbian Bank Association (SBA) & AuthorHouse, UK
• “What is a bank?”, 2009, Promoculture & AuthorHouse, UK
• “A brief introduction to accounting”, 2008, Unibook, Belgium
• “Marketing in financial services”, 2007, SBA
• “Branch Management”, with P. Wiertz,2006, Promoculture & SBA
• “Ethics, corporate values and prevention of money laundering”, 2006, SBA
From: www.rogerclaessens.eu
3
4
Effective Selling
Practice is the best way to learn
Content Day 1
1.Branding requirements
2.A “brief introduction” to the balance sheet
3.The impact of interest rates on the bank
4.Basic selling skills
Day 2
5.Case studies
6.Mastering delicate situations
7.Conclusions and review of what can be improved
8.Tips and tricks of the trade
5
Selling financial services
Module 1
Branding requirements
A. Why would someone purchase your
product?
B. Brand associations, expectations
and differentiation
C. Goals to be reached to be better
than competition 6
7
WHICH is WHICH ?
The origin of the word
« BRANDING »
8
A BRAND
But is the
cowboy A PRO?
9
A BRAND
WIND
10
11
CORPORATE CULTURE
=
VISIBLE LEVEL
(BRANDING)
& SHARED VALUES
Substance
12
WHAT DOES A BRAND MEAN ?
A BRAND HAS AN IDENTITY
13
A BRAND EQUALS A PROMISE
14
What is the PROMISE in
this case?
First name Name
Date
That car was born in a marketing
department…What was the
THINKING behind it? 16
A BRAND IS THE RESULT OF MARKET RESEARCH
A BRAND SHOULD MATCH EXPECTATIONS
17
A BRAND SHOULD BE AUTHENTIC
Authenticity is vital
as it increases your
LEVERAGE
18
19
A BRAND SHOULD BE RECOGNISEABLE
A BRAND IS NOT ONLY ADVERTISING
20
21
A BRAND IS RELATED TO A DEFINED MARKET
22
A BRAND EXPLOITS SYMBOLISM
Branding in the time of crisis
The premises of
the brand
remain
unchanged BUT
the accents
change
BRANDING IN THE TIME OF CRISIS
23
BRANDING IN THE TIME OF CRISIS
Appeal to core values 24
A SIGNIFICANT PERCENTAGE OF THE ANNUAL
PROFIT IS SPENT ON ADVERTISING
25
A BRAND OFTEN REQUIRES A SUBSTANTIAL
BUDGET
“ All great stories start with a white page ”
Source: AUDI
26
A BRAND IS A STORY
What makes a great story? 27
A BRAND IS A STORY
What makes a great story?
• Unexpected ending
• Structure
• Your hope is fulfilled
• Meaning
• Fills gaps
• Participative
• Connective
• Empathy
• Can be told over and over again
28
A BRAND IS A STORY
“Good storytelling
last for decades”
Steve Jobs
1. Start a conversation with stakeholders
2. Look around (research, insight, emotion,
rationalisation)
3. Define your direction
4. Put the message together
5. Choose the media
6. Follow up with the stakeholders and adjust
over time
The classical steps of BRANDING
29
A BRAND IS A STORY
eBrands
“The winners on the Web are the companies fiercely
dedicated to making themselves known names in the
markets they serve”
“It has transformed customers into disciples, avid
supporters who have spread the word about iVillage to
friends and colleagues”
(Source: Phil Carpenter, HB School press) 30
A BRAND IS A STORY
A brand is linked to Corporate culture
• What is corporate
culture? • How do you create
it? • How do you evaluate
it?
A BRAND IS LINKED TO CULTURE
31
32
CORPORATE CULTURE = SHARED VALUES & GROUP BEHAVIOUR
NORMS
Corporate culture
Is a matter of:
people, believes, motivation values attitude
A BRAND IS LINKED TO CULTURE
33
A BRAND
« Values are best demonstrated as opposed to talk
about it! » (R. Hytner, Saatchi & Saatchi)
34
CULTURE requires
a TEAM SPIRIT
which in turn leads to
a REPUTATION
35
A BRAND REFLECTS A CULTURE
BRANDING requires an ENGAGED MANAGEMENT
36
A BRAND REFLECTS A CULTURE
Remember:
If BRANDING is not a concern at
ALL LEVELS OF THE ORGANISATION
it will be side-lined to the benefit of other short term objectives
37
Selling financial services
Module 1
Branding requirements
A. Why would someone purchase your
product?
B. Brand associations, expectations
and differentiation
C. Goals to be reached to be better
than competition 38
CUSTOMER KNOWLEDGE
=
AWARENESS ATTITUDES
&
USAGE
39
40
What it your
TOP OF THE
MIND BRAND &
WHY?
The top of the mind
brand has a
DISTINCT
COMPETITIVE
ADVANTAGE
in brand space, as it
has the first chance of
evaluation for
purchases!
41
Attitudes are the
opinions associated
with the brands,
products, services….
The attitudes towards
the brands can help
determine the brands’
weaknesses and
appealing
factors.
• Usage patterns, which are subject of the
demographic profile, help reveal the how the
respondents are interacting with the brand,
product or service! 42
Selling financial services
Module 1
Branding requirements
A. Why would someone purchase your
product?
B. Brand associations, expectations
and differentiation
C. Goals to be reached to be better
than competition 43
A culture of motivation
The objectives to be reached are:
44
The objectives to be reached are:
NIKE SHOES
What would you be thinking, when
jogging?
“NO GAMES, JUST SPORT”
A culture of listening 45
For instance, this PC
is the result of a
constant search for
excellence:
FASTER
CHEAPER
SMALLER
SIMPLER
BETTER
The objectives to be reached are:
46
A culture of excellence
Self-efficiency
A culture of self-efficiency 47
48
A culture of follow-up
Selling financial services
Module 2
A “brief introduction” to the Bank’s
balance sheet
A. The structure of a bank’s balance sheet
B. Risk elements
C. Assets
D. Liabilities
E. Off balance sheet products
The concept of a balance sheet
What I HAVE What I OWE
What I HAVE What I OWE
House
Car
Furniture
Equipment
Savings
“Petty” Cash
Mortgage
Car loan
Equipment loan
Invoices
Overdraft
The concept of a balance sheet
What I HAVE What I OWE
House 100
Car 10
Furniture 30
Equipment 20
Savings 10
Petty Cash 5
Adding up 175
Mortgage 65
Car loan 5
Equipment loan 10
Invoices 5
Overdraft 10
Adding up 95
The concept of a balance sheet
What I HAVE What I OWE
House 100
Car 10
Furniture 30
Equipment 20
Savings 10
Petty Cash 5
Total 175
Net worth 80
Mortgage 65
Car loan 5
Equipment loan 10
Invoices 5
Overdraft 10
Total 175
The concept of a balance sheet
What I HAVE What I OWE
All this does not tell us much about our income or
expenses during a given period of time
This would be shown in other reports, i.e.
• The Profit and Loss report or Income statement &
• The Cash flow report
The concept of a balance sheet
The balance sheet of a bank
ASSETS LIABILITIES
What the bank HAS What the bank OWES
The balance sheet of a bank
What the bank HAS What the bank OWES
• Fixed assets & other assets
• Participating interest &
shares in affiliates
• Variable yield securities
• Fixed income securities • Loans & advances to credit
institutions
• Loans & advances to
customers
• Shareholder equity
• Profit of the year
• Debts evidenced by
certificates • Various debt
• Amounts owed to credit
institutions
• Amounts owed to
customers
Assets Liabilities
57
Sum of asset
products
Sum of
liability
products
Net worth
Assets-Liabilities
to third parties
58
The mission and product range of a bank
The mission and product range of a bank will be reflected in
the balance sheet, its main elements, in the profit and loss
statement as well as its cash flow statement
Looking at balance sheet items as a sum of products sold
• A car financing loan = a product
• A 2 year deposit = a product
59
Why is it important to look at it this way?
•A product has a cost, a contribution to the profit margin…
and a « risk profile »
•A product needs to be accounted for
•A product requires branding
60
What is a product?
A product has a cost price, a potential revenue and a «risk profile »
High price
No demand
Low price
No profit
Product cost
Competition
Perceived value
Risk profile
61
What is a product?
• One can state that factors, such as attitudes to risk, to debt,
to the need for security will affect customers’ perception.
• Therefore, a segmentation of the customer base on revenues
and socio-demographic data is one of the best tools to
optimise product distribution and development
• Furthermore, a good segmentation allows to determine to
which extend customers could be approached in an automated
way - distribution strategy.
62
Shares
Cost > 10%
Bonds
Cost > 5%
Deposits
Cost > 3%
Current
account
Cost >0 %
Assets
A bank is a sum of assets financed by liabilities
63
If banking is about selling products, why do so
many banks fail?
Risk elements
Discussion
64
Banks mainly fail for two reasons:
1. Their customers go bankrupt
2. The bank’s management has proven unprofessional or reckless
Admittedly some elements are beyond management control, mainly:
§ The economic cycles
§ The political elements
§ The sociological developments
§ The technological developments
Risk elements
65
1_ Credit risk
2_ Liquidity risk
3_ Interest rate risk and FX risk
4_ Capital risk
5_ Profit risk
Key Risks
66
Bankers have Three Responsibilities with Respect to Credit
Risk
–Risk assessment (skill)
–Risk taking (management decision)
–Credit review and administration
1_ Credit risk
67
–Character - the willingness of the borrower to repay =
Know your customer
–Capacity - the ability to repay the debt from cash flow =
Determine his income and borrowing capacity
–Collateral - the security backing the loan =Collateral acts
as a guarantee
–Capital - the strength of the borrower’s balance-sheet =
Determine his net net worth
–Conditions - the sensitivity of the project to outside
factors such as economic cycles and competition = Adapt
the terms and conditions to the bank’s and client’s needs
The 5 C’s of Credit risk
68
Liquidity risk is the risk that a shortage
of funds will require funding of some
assets by liquidation of other assets
under unfavourable conditions or
the acquisition of additional funds on
unfavourable market terms.
2_ Liquidity risk
69
2_ Liquidity risk
(2) Cash out
(3) Cash in
(1)Cash in A
(4) Cash out
70
2_ Liquidity Profile
Balance Sheet Maturities
Assets Maturing (+)
Liabilities Maturing (-) 400
300
200
100
0
-100
-200
-300
1 2 4 5 3
GAP (+/-)
Cum. GAP
Period (time band)
Amounts/
difference
71
What is the role of Treasury?
The primary objective of the Treasury is to manage liquidity
by investing in short and long-term portfolios,
as defined in duly approved guidelines,
while optimising performance and yields within the market,
as well as the Bank’s credit and liquidity risk policies.
2_ Liquidity risk
72
Cost, return, risk change under the influence of interest
rates - The definition of an interest rate
The preference curve of the borrowers
3_ Interest rate risk
73
Cost, return and risk of products change under the
influence of interest rates - The definition of an interest rate
The preference curve of the lenders
3_ Interest rate risk
74
The interest rate = the cost of borrowing and the
return of a deposit
3_ Interest rate risk
75
When the perspectives change, so does the cost
and the risks involved.
3_ Interest rate risk
76
What would happen to those three banks in
case of a sharp interest rate increase?
3_ Interest rate risk
Discussion
77
3_ Interest rate risk
Bank A
Mortgages 500 L-term deposits 400
L-T Govt. bonds 400 Bonds issued 500
Other 100 Equity 100
1,000 1,000
78
Bank B
Mortgages 200 L-term deposits 300
Overdrafts 700 Current accounts 600
Other 100 Equity 100
1,000 1,000
3_ Interest rate risk
79
Bank C
Mortgages 600 S-term deposits 200
L-T Govt. bonds 300 Current accounts 700
Other 100 Equity 100
1,000 1,000
Long term (fixed rate) assets funded by short term
(variable rate) deposits.
Balance sheet is “mismatched”.
RISK = Rise in interest rates will increase
cost of funding with no off-setting rise in
interest income
3_ Interest rate risk
Products
& Services
GNP
CONSUMERS
Salaries,
interest,
rentals
LABOUR
ENTREPRENEURS
WHAT? HOW?
FOR WHOM?
The economic circuit
81
€ $
What happens when you purchase a product in the USA?
3_ Foreign Exchange risk
82
• The foreign exchange market is the largest market in the
world. It is an over the counter market, regulated by a
strict code of conduct.
• The daily turnover is now close to an estimated
$4,000,000,000 (world GDP is 65 trillion USD)
• Because of its seize it is quite unpredictable!
3_ Foreign Exchange risk
83
Settlement needs to be done in two working days
Physical exchange
$
Settlement risk !
€
3_ Foreign Exchange risk
84
Sum of asset
products
Sum of
liability
products
CAPITAL
Assets-Liabilities
to third parties
4_ Capital risk
85
Why does the Bank need Capital ?
– To absorb unanticipated losses with sufficient margin of
safety to maintain public confidence in the bank's ability
to continue as a going concern;
– To protect uninsured depositors and other creditors
in the event of liquidation of the bank;
4_ Capital risk
86
Why does the Bank need Capital ?
– To assure shareholders of bank solvency;
– To comply with the requirements of bank regulators;
– To provide for premises, equipment and other non-
earning assets necessary for bank operations.
4_ Capital risk
87
What are treats to a bank’s profitability and your job?
5_ Profit risk
Discussion
88
Problems in Determining Bank Profitability
– cash flows do not occur when interest is earned or
payable, interest income/expense has to be accrued
– changes in value of assets/liabilities are essential
components of profitability and so must be adjusted
regularly by provisions or revaluations
– banks carry and transact in several currencies
5_ Profit risk
89
Problems in Determining Bank Profitability
– receipts and payments have to be split between
interest and capital
– gains/losses from maturity mismatches are mixed up
with commercial profits
– shared costs make product pricing difficult
– bank regulators in different countries establish
different reporting policies
5_ Profit risk
What are YOU selling? 90
91
Asset products
92
Product type Current account in overdraft
Balance sheet type Current asset
Profitability Large margin over cost of funds
Risk profile Liquidity, solvency due to non
repayment
Treasury impact Uncertainty, average outstanding
needs to be used as guideline
Customer profile Known customer, middle to top
segment
Documentation Account opening, financial statement,
follow-up doc, memo’s of call.
93
Product type Corporate current account in
overdraft
Balance sheet type
Profitability
Risk profile
Treasury impact
Customer profile
Documentation
94
Product type Revolving loan
Balance sheet type
Profitability
Risk profile
Treasury impact
Customer profile
Documentation
95
Product type Spot loan
Balance sheet type
Profitability
Risk profile
Treasury impact
Customer profile
Documentation
96
Product type Credit card related loan
Balance sheet type
Profitability
Risk profile
Treasury impact
Customer profile
Documentation
97
Liability products
98
Product type Current account
Balance sheet type
Profitability
Risk profile
Treasury impact
Customer profile
Documentation
99
Product type Corporate Current account
Balance sheet type
Profitability
Risk profile
Treasury impact
Customer profile
Documentation
100
Product type Savings account
Balance sheet type
Profitability
Risk profile
Treasury impact
Customer profile
Documentation
101
Product type Time deposit
Balance sheet type
Profitability
Risk profile
Treasury impact
Customer profile
Documentation
102
Product type Flexi deposit
Balance sheet type
Profitability
Risk profile
Treasury impact
Customer profile
Documentation
103
Some off-balance sheet products
Assets Liabilities
Off balance sheet Off balance sheet
104
Product type Documentary credit (L/C)
Balance sheet type
Income statement
Profitability
Risk profile
Treasury impact
Customer profile
Documentation
Product type Remittances
Balance sheet type
Income statement
Profitability
Risk profile
Treasury impact
Customer profile
Documentation
106
Product type Collections
Balance sheet type
Income statement
Profitability
Risk profile
Treasury impact
Customer profile
Documentation
107
Product type Guaranty Facility
Income statement
Profitability
Risk profile
Treasury impact
Customer profile
Documentation
108
Banking products
A car loan
=
what the
bank has
= An asset
A deposit
=
what the
bank owes
= A liability
The margin is the difference between what the
banks pays for its liabilities = its cost of funds
and charges for its assets
The margin pays for the expenses
109
Banking products
A car loan
=
what the
bank has
= An asset
A deposit
=
what the
bank owes
= A liability
The margin is the difference between what the
banks pays for its liabilities = its cost of funds
and charges for its assets
Selling financial services
Module 3
The impact of interest rates &
economic indicators on the bank
The question central bankers must answer is: “What is
the correct money supply level?” The easy answer is
enough to buy all the goods and services produced, so
that full employment is reached without a rise in
prices”.
P.Q = M.V
It is NEVER perfectly in balance & winds of optimism
and pessimism cause
ECONOMIC CYCLES
The intervention of the Central Bank
P.Q = M.V • P = price level of goods and services
• Q = quantity of goods and services produced in a national economy (= GDP)
• M = the monetary supply (the assets of the consumers and the entrepreneurs, with corresponding liabilities for the banking system and the central bank)
• V = is the velocity of the circulation of money
The intervention of the Central Bank
What is the economy
telling YOU?
113
What might be indicators around us of an economic boom or a slow down?
The economic cycles
Discussion
• Production
• employment
• productivity
• wages
• sales
• profits
• output
• credit
• investment goods
• Stock exchange
• GNP
• public sentiment
• risk taking
• new activities
• interest rates
• central bank
• resources
• inventories
The economic cycles
– Orders
– exports / imports
– employment
– sacrificed prices
– raw materials
– intervention
– bankruptcies
– savings
– Intensity of fluctuation
– Excess capacity
– liquidity
– credit-crunch
– competition
– central bank
– producers
– imagination
The economic cycles
The better the understanding of a situation is, the greater the probability to take a right decision, hence the study of the economic indicators
They are the language of the economy
They are the basis for educated decisions
The economic cycles
Products
& Services
GNP
CONSUMERS
Salaries,
interest,
rentals
LABOUR
ENTREPRENEURS
WHAT? HOW?
FOR WHOM?
Government Central Bank
5 Key tools of the central bank
1. The printing of money
2. The short term interest rates
3. The fractional reserve requirements
4. The open market policy
5. The financial structure of the banks
(c) The intervention of the central bank
1- Printing money
The intervention of the central bank
The preference curve of the borrowers
2- Interest rates
The preference curve of the lenders
2- Interest rates
The cost of borrowing and the return of a deposit
2- Interest rates
When the perspective changes, the curve moves
2- Interest rates
Interest rate
Short term interest rate + inflation
= +/- long term interest rate
Real interest rate
= +/- nominal interest rate – inflation
2 – Interest rates
0
20
40
60
80
100
120
140
160
180
Q1 Q2 Q3 Q4 Q5 Q6 Q7 Q8 Q9 Q10 Q11 Q12
Interest shares GDP Bonds
2- Interest rates
127
2- Interest rates
3 YEAR
DEPOSIT
at 3 %
3 YEAR
LOAN
at 7%
Avoiding int. rate risk = a matching position
3 – Fractional reserve requirement
Commercial Bank Central Bank
%
DEPOSITS LOANS DEPOSITS
Reserve requirement of 10 out of 100 100 is deposited with Bank A Bank A is going to deposit 10 with CB and lend 90 90 is deposited with Bank B Bank B is going to deposit 9 with CB and lend 81 81 is deposited with bank C Bank C is going to deposit 8,1 with the CB and lend 72,9 … M0 = cash = 100 = monetary base M1 = cash + sight deposits = 342,9 = money supply = (100+90+81+72,9)
3 – Fractional reserve requirement
Commercial Bank Central Bank
Purchase of bonds
Euro
4 – Open market policy or “quantitative easing”
Commercial Bank
5 – Balance sheet structure
• The existence of a large national debt influences
the interest rates and the possibility of adjusting
them in order to attenuate the cyclical fluctuations.
• Investments in government bonds cause interest
rates to raise and divert essential means from the
private investors and borrowers.
The economic environment
The ECB’s president argues that its most
valuable asset is information, not money. 133
Selling financial services
Module 4
Selling skills
134
135
How are you doing so far?
136
Remember the basic structure of any message
SITUATION PROBLEM INFOR-
MATION CONCLUSION
IMPLICIT EXPLICIT
Effective selling
Effective selling
Market position
Effective selling
Competition
Marketing
Products
137
Effecive selling
You do not want to sell an apple whereas the
customer wants to purchase an orange! 138
Effective selling
QUESTIONS, QUESTIONS, QUESTIONS
LISTEN, LISTEN, LISTEN
139
140
Communication
The challenge is to be brief, structured, focused
• Situation questions concerning the customer or the prospect
• One should manage to raise interest as of the first seconds in order to gain the right to ask further questions « open but targeted questions », allowing the customer to formulate himself the features of his problem, which will lead towards the key elements of the product which one wants him to purchase.
Effective Selling
141
• Situation questions concerning the customer
or the prospect
• Customers will behave along following styles:
– ACTION
– ANALYSIS
– HARMONY
– AFFECTIVE
Effective Selling
142
Action
• Individuals talking with authority, who are result
driven, stress resistant, focused mind, often
impatient and… often convinced about the
correctness of their point of view
Analysis
• Individuals talking with knowledge, reserved,
systematic, who look for quality and…often too
detailed or too critical
Effective Selling
143
Harmony
• Individuals talking with respect, a sense of purpose in order to find a mutual satisfactory…but are often too tolerant and too dependant upon the esteem of others.
Affective
• Individuals who are often intuitive and creative, are happy to find a solution…but they often take far too much time and may easily get side-tracked or loose the objective from sight
Effective Selling
144
• Whatever the profile of the customer:
– The customer pays our salary or our
commission
– The customer does not depend on us, we
depend on him
– The customer does not interrupt our
workload, we work for the customer
Effective Selling
145
• Whatever the profile of the customer:
– The customer, who sees his problem
being solved, gets what he is entitled to
– The customer is part of out net worth
– The customer is not an account number
– The customer is the rationale for the bank
Effective Selling
146
• Problem questions
– His problems, difficulties, point of dissatisfaction,
– a lack of information reveals: an implicit need
– Take your time, do not draw conclusions too
quickly, go “slowly” to the next step!
Effective Selling
147
• Information questions
– Required information so that the customer plainly realises his needs and wants.
– His problem needs to become simple and clear as well as its solution
– Make a comparison of pros and cons of the sales proposition
– Treat the objections one by one !
Effective Selling
148
Need pay off questions
• For the customer, previous phases have allowed
him to express his needs and wants
• His implicit needs are now explicit
• Its provides him a deep satisfaction as he is the
one who has formulated the solution
Effective Selling
149
• Comprehends in addition the 3 C ’s :
– Competence ( I know my products)
– Comprehension ( I understand the customer’s
needs and I personalise my arguments)
– Coherence ( I am firmly determined to
convince my customer)
Effective Selling
150
• An absolute must as far as products is
concerned:
– Product characteristics
– Product advantages
– Product benefits
– (The onion)
Effective Selling
151
What is a product?
Definition : Product planners think about a product
in three levels:
1. The core product
2. The actual product
3. The augmented product
Effective Selling
153
Core
Actual
Augmente
d
MARQUE
Benefit or
Service
Actual product
Installation
After sales
Quality
Brand
Style
Delivery
Garanties
Effective Selling
154
A plan for a sales talk 1. The objective and the opening
2. The situation
3. The problem
4. The proposed solutions
5. The additional information
6. The repetition of objectives
7. The final argument
8. The conclusion
Effective Selling
155
156
Discussion item
Effective Selling
157
Discussion item
Effective Selling
You learn to play
tennis with
practice, practice
and again
practice….SAME
goes for SELLING
Groups of 4 with one seller, one purchaser and 2 observers
4 Exercises with various briefings with a rotation of role playing
See Hand-out
• Create a climate of confidence
• Raise interest as of the first questions
– “I will help the customer to make sure he understands his problem well and formulates his needs and wants adequately”
– “It is the customer, who will help me to put on the table the right tailor made sales-arguments”
Effective Selling
158
• A Powerful argumentation is based on cause and effects.
• An argumentation needs more than one single formulation of the customer’s needs.
• An argumentation presents advantages and disadvantages + a simulation
• An argumentation comprehends a conclusion
Effective selling
159
• Verbal – a question or an objection
– a favourable comparison with the competition
• Non verbal – 50 % of the communication is body language
– A moment of silence, a moment of reflection
– A smile, a sign of decreasing contraction
– A sustained interest for a simulation
Effective selling
160
• The technical objections
• The objections in principle
• The objections to postpone a decision
161
Effective selling
• The direct conclusion
• The alternative conclusion
• It is paramount to “isolate” the “buts” or the
“ifs” and neutralise them !
162
Effective selling
The follow-up • Reinforces the customer’s confidence
• Deepens the knowledge of the customer
• Deepens the professional relationship with the customer
• Provides information on the product and on the competition
163
Effective selling
• Is the situation clear ?
• Has the problem been well formulated ?
• Does the information lead to conclusion ?
• Do the closing questions lead to a final sale?
164
Effective selling
We have seen 3 types of customer
segmentation:
• As to the attitude (parent, adult an child)
• As to the nature (action, analysis, harmony
and affective)
• As to the profile (risk prone or risk adverse)
• …but on the telephone?
Effective Selling on the telephone
165
166
Selling on
the
phone
Call centres
• The « link » with the customer
• The call is essential for
– The reputation
– Reaching excellence
– YOUR career
– YOUR ego
– YOUR personal satisfaction
Telephone contact
167
• The very telephone call needs to be a tone-
setter in customer-contact, in service and
commercial approach. It is the institution’s name
card.
• That call is essential for everyone in the
organisation
Telephone contact
168
• The quality of your call will depend on:
– Your attitude
– Your methodology
– Your sensitivity to the customer
• BUT ALSO on:
Telephone contact
169
– Your attitude as to the number of times you let
the telephone ring
– Your first sentences
– The way you introduce yourself
– The way you create an atmosphere
– The way you listen
Telephone contact
170
The various elements of a telephone contact:
• Identification
• The analysis
• Expectations
• Conclusion
• Transferring
• Language
• Professional
• Time
Telephone contact
171
• Identification
– The customer feels he is the centre of your
attention.
– A lack of proper identification or interest from
your part will immediately and irrevocably
penalise you.
Telephone contact
172
• Analysis
– Your questions will have enabled the customer
to determine the exact nature of his problem.
– Do not refrain from reformulating his problem in
order to ascertain you are indeed on the same
wavelength and will be in a position to meet the
customer’s expectations
Telephone contact
173
• Expectations
– The telephone is not free. Do not keep your
customer waiting on the telephone. Call back.
Calling back means that you are working on the
problem
– On top if it leaves you the time to speak to
colleagues, if need be
Telephone contact
174
• Conclusion
– The conclusion needs to be crystal clear for all parties involved
– Rephrase the conclusion to ascertain all is clear
– In case of doubt, ask closed questions; they will enable you to clarify things
Telephone contact
175
• Communication transfer
– A critical moment!
– Sending the customer in the system is dramatic.
– Loosing the communication is as bad
• Make sure the transfer has indeed happened to the
right person and the right department.
• Make sure the customer has found as a
professional counterpart as you are.
Telephone contact
176
• Language
– By means of focused questions, it is up to us to
show that we are truly professional.
Telephone contact
177
• Professional
– The nicest compliment one can make to you is
« Thank you, this is very professional ».
– This is in line with his expectations and with
your career objectives
Telephone contact
178
• Time
– Nothing takes « a minute ».
– Call the customer back if you will only be
listening with half an ear, whereas we have two!
– Take a note that you have to call back.
– Do call back in any event!
Telephone contact
179
180
Remember the basic structure of any message
SITUATION PROBLEM INFOR-
MATION CONCLUSION
IMPLICIT EXPLICIT
Effective selling
181
Communication
Communication requires an interface between
what is being said and what is being done
182
Good communication means ?
Selling financial services
Module 5
Case studies
184
Cases
The seminar belongs to YOU and its success rests
largely with you.
• Enter into the discussion.
• Give freely of your experience.
• Confine your discussion to the problem.
• Say what you think.
• Only one person should talk at a time.
• Be patient with other members
• Appreciate others point of view
185
Role playing (on a rotation basis)
• Seller
• Client
• 2 Observers
• What needs to be observed:
– Structure of the dialogue (SPIN)
– The aptitude to listen
– The aptitude to describe a product
– The understanding of the economic environment
– The closing & the agreed follow up
186
Case 1
Fatmir, 47, married, one child
– existing customer
– owner of one fully paid villa
– is in a position to save about 10 % of his
income
– little experience in stock and bonds
– holds presently about 20.000 EURO on his
current account
– no problem with currency exposure
– his wife’s grandfather lost quite a lot of money
at the stock exchange
187
Case 2
Syzanna, 42
– She has inherited a significant patrimony
– She is not a customer but her husband knows
the bank well as he was the architect, who
renovated the head-quarters.
– She does not take everything for granted and
questions a lot!
– She heard from a friend that your bank provides
good advice
– She is prepared to “test” the bank for 25.000
EURO
188
Case 3
Isak, 65, pensioner
– knows the bank for which he has done
upholstery in the past
– he will receive a payment from the insurance in
the tune of 40.000 EURO and wants to invest it
properly
– he is shopping around and has little
understanding of “finance” but has a good grip
on money matters, i.e. hard earned savings
– He would like to have a monthly income of
about 350 EURO
189
Case 4
Vlajko, 55, an unsatisfied customer
– Originally, he had invested 50.000 Euro of which
32,000 Euro is left.
– he is the owner of a small supermarket under
franchising
– has predominantly invested in euro denominated
bonds by lack of market knowledge
– had a bad experience with shares many years ago
whereby he had lost about 10.000 USD in the Asian
emerging markets.
190
Case 5
Dyturie
• You are responsible for the expatriate prospects and
managed to arrange a meeting with Ms. Dyturie, 33, who
is a doctor in chemistry of the MIT and works for a UN
mission.
• She is hard nosed and seems to have a pretty strong
knowledge about the US market.
• Yet, she is a foreign national and is currently paid in
EURO.
• She believes she is going to be able to save about 1.000
EURO a month on her quite high expatriate salary. She is
looking for some interesting tips.
191
Case 6
Mike Le Sable
• You left the bank this morning for a « cold call »
• You heard that Mr. Le Sable - you estimate him about 40
years old - is the owner of a very successful firm behind
the corner of your office - has quite a lot of means to
invest.
• You have called for an appointment and he said « O.K.,
one never knows. I have very little time and I am quite
pleased with the present banking services, but by all
means if you think you have something special to
offer… »
192
193
Case 7
Nikola
Nikola had called upon you for a meeting in order to
discuss a pension plan issue. You know him as a
member of the chamber of commerce but have never
been able to turn him into a customer.
What questions would you asked Nikola in order to
get a complete picture of his situation, his needs and
wants and what information would you provide in
order to close the business at hand?
194
Case 8
Dr. Neijenrode,
a Dutch legal counsel from Rotterdam, represents a wealthy
customer of the bank. This relationship was established
years ago. The lawyer has always represented the
customer. The documents in the file are in order. The
relationship is significant. The customer, Mr. Alexos is a
businessman living in Greece.
Dr. Neijenrode has received a power of attorney in due form
in order to withdraw 25.000 Euro in cash.
Q: What should be the teller’s dialogue?
195
Case 9
Binary Inc,
As account manager, you are handling an existing relationship
Binary Inc. of which average outstandings have been around
US $100.000 for the last two years. A non-resident company,
Binary Inc. is involved in soft- and hardware and trades
worldwide. Years ago, the managing director and majority
shareholder, Mr. Löwenstein, was introduced by a highly
regarded customer.
Mr. Löwenstein has called for an appointment in order to
discuss the practical arrangements in the framework of a
contract for a new customer in Mexico. He proposes following
scheme: (continued)
196
Case 9
(continued)
•Instead of transfers from abroad the bank is going to
receive cashier’s checks on a regular basis.
•The checks will not necessarily be made out in his name
but will be endorsed in your favour.
•The checks will all be below the generally known United
States reporting threshold of US $ 10.000.
•The checks might be more than six months old
•The checks will have a different amount than the underlying
economic transaction, if any.
Q: How would you discuss this proposal?
197
Case 10
Mr. Pizon
Your responsibility is the handling of the private customers
with ventures in EU countries. You enjoy being the account
officer of Mr. Pizon who owns a few restaurants in Trieste. In
fact you think he is a decent fellow but rather ignorant as far
as markets is concerned. You do offer a definite added
value, which is a nice feeling.
However, you have noticed that the monies deposited in the
account have risen quite substantially above the average of
previous quarters and wonder why this is the case.
Q: How would you discuss the issue with Mr. Pizon?
Case 11
Mr. & Mrs. Markovic
• You are meeting Mr. and Mrs. Markovic for a revolving
loan to finance the purchase of a new car. They have
some savings with the bank in an amount higher than
the value of the car.
• Both are working and at first glance the loan appears to
be reasonable, despite the fact that you feel Mrs.
Markovic to be quite nervous to say the least.
• How would you negotiate with the couple in front of
you?
198
Case 12
• You are branch manager and the number two has been
promoted to head another branch,
• Two persons, Ian and Donika, would like to get that
open slot. However you believe that Ian is not as well up
to the task as Donika,
• You have a conversation with Ian to tell him that he will
not have the promotion, he thinks he deserves.
• YOUR goal is to keep him motivated despite his
disappointment
199
Case 13
• You are an account manager in a main branch and have
been called upon to meet Ms. Cecelia, who has a two
year time deposit with you in the amount of 20,000 Euro.
• She is an accountant, about 40.
• She seems annoyed and you wonder why.
• The meeting starts on a difficult note as she could not
find a parking space, it is raining and the local news of
the day mentions a possible collapse of the banking
system, at least as we know it.
200
Case 14
• You are an account manager visiting a prospect, a small
import/export company for hard and software.
• This is your first visit. You checked available data and
have the impression that there must be some
opportunities at hand.
• How would you go about it?
201
Case 15
• You are a branch manager and are facing a key issue
that poisons the atmosphere in the branch.
• The two tellers of the branch, both relatively new
employees do not co-operate with each other for breaks
and lunch time schedule.
• It seems that instead of helping each other they do the
opposite. This has not only an impact on the branch but
also on the customer service.
• You decide to call a meeting to solve the issue,
• How will you sell the idea that a smooth operation is
essential and will benefit all stakeholders.
202
Selling financial services
Module 6
Mastering delicate situations &
objections
203
Mastering delicate situations
204
Getting out
• You are in the Arizona desert in the hottest time of the
year. Because of a fire, the plane had to land and most of
the contents have been destroyed but fortunately none of
the three passengers and the pilot are hurt. You know
that you are about 75 miles from the nearest town.
Fortunately you have some pieces of equipment and
items left that you could use for your survival.
• The decision to make is: either to stay put and wait for
help or move and walk the 75 miles to the nearest town.
• Whatever the decision it needs to be taken
unanimously!
205
Getting out
• Below is list of available items, you should list them in order of
importance to your survival, one being the most important, and
decide what items to take with you in case you decide to move.
You may also take the decision to stay and wait for potential help
but should still list the items in order of value to your survival:
1. Compass
2. Small transistor radio
3. Shaving mirror
4. Snake repellent
5. 5-liter of water for the four of you
6. 4 square meter of opaque plastic
7. Mosquito netting
206
8. 1 case of rations
9. Maps of the desert
10. Cushions
11. 5 litre of an oil/gas
mixture
12. 1 bottle of rum
13. Two boxes of
chocolate
14. 5 meter of ropes
15. One boomerang
Creating consensus
1. Clearly frame the issue to be decided & determine the
result you desire to achieve (during the meeting).
2. Clearly think about the process of decision making
which will be used.
3. Clearly explain your role.
4. Use a proven sales technique and repeat to make sure
you are indeed on the same wavelength,
207
5. The standard for consensus is that both parties must
agree with the decision.
6. Expect dissent and disagreement during the process
and view this as a positive step towards a high quality
decision.
7. Allow your customer to be direct.
208
Creating consensus
8. Actively listen to each person in the group if more than
one person is purchasing. Look for the possible merit of
each other's opinions.
9. Encourage everyone to approach the meeting and the
decision in a rational manner rather than an emotional
one.
10. If the meeting gets off track re-focus the discussion on
the desired result.
209
Creating consensus
210
Dealing with dissatisfied customers
• The more you are structured the more chances you
have to reach a solution.
• « Lay back! » You are not being blamed
personally! • YOU are NOT part of the problem, you try to resolve it
Mastering delicate situations
211
• You are looking for a solution in the capacity of a
consultant
• The customer is neither always right nor wrong. It does
not matter. What matters is that you are a professional
solving a problem
• Remember that you are the best advertisement!
Mastering delicate situations
212
• Always take objections very seriously
• Be conscious about your attitude
• Isolate each objection and address them one by one
• Always finish a conversation on a positive note
• Go to the very end
• Conclude with closed questions (yes or no)
Mastering delicate situations
213
• What matters is concluding
• A customer complaint represents an opportunity
• Think about the marketing aspects of a complaint. A
complaint is a piece of marketing information
• One can commit an error but not twice the same.
The attitudes of wisdom
214
• Never be on the defensive side, you are a consultant, who is looking for a mutually acceptable solution
• Never be critical, the only criticism is constructive criticism
• Never promise what you cannot deliver
The attitudes of wisdom
215
• Learn from each situation what you can make out of
it, knowledge means survival!!!
• Good luck, whatever your level of professionalism,
you do need some luck!
The attitudes of wisdom
216
217 Keep contact YOU will have another opportunity in the future!
Objections in principle
Selling financial services
Module 7
What can be improved?
218
219
0
20
40
60
80
100
120
140
Q1 Q2 Q3 Q4 Q5 Q6 Q7 Q8 Q9 Q10 Q11 Q12
Cost Revenues
Distribution goes hand in hand with cost avoidance
Cost -
Consciousness
Avoiding waste
Profit
220
Some distribution channels are much cheaper
than others !
€? €?
€? €?
€? €?
INPUT
221
Advising the most efficient distribution channel
will ultimately save jobs
We can - safe a
totally unforseen
event - avoid this
222
• Comprehends in addition the 3 C ’s : (reminder!)
– Competence ( I know my products)
– Comprehension ( I understand the customer’s
needs and I personalise my arguments)
– Coherence ( I am firmly determined to convince my
customer)
Effective Selling
223
Products
Price
Place
Promotion
People
Economics
Culture
Politics
Technology
The customer profile
The decision process
The customer’s response
The choice of the product
The choice of the brand
The moment of the purchase
The amount spent
Effective Selling
224
225
226
The follow-up
• Reinforces the customer’s confidence
• Deepens the knowledge of the customer
• Deepens the professional relationship with the customer
• Provides information on the product and on the competition
Effective Selling
227
• Is the situation clear ?
• Has the problem been well formulated ?
• Does the information lead to conclusion ?
• Do the closing questions lead to a final sale?
Effective Selling
228
1_The art of asking questions
229
Question: What about my….:
•Aptitude at beating competition
•Management of time, data, meetings
•Feedback to and from my colleagues
•Attitude versus waste of any kind
•Productivity, priorities
•Listening carefully to advise, ….
Avoiding waste of any kind starts with yourself!
Self-efficiency
230
Performance improvement
1. Avoiding waste (time as an example)
2. Remembering more from reading
3. Use effective selling to reach your goals
4. Transactional attitude to gain time
5. Information management to avoid waste
6. Listening to avoid waste of time
7. Self preservation through efficiency
Self-efficiency
231
The right type of transaction
Parent Parent
Adult Adult
Child Child
232
• Whatever the profile of the customer:
– The customer pays our salary or our commission
– The customer does not depend on us, we
depend on him
– The customer does not interrupt our workload,
we work for the customer
Remember
233
• Whatever the profile of the customer:
– The customer, who sees his problem being
solved, gets what he is entitled to
– The customer is part of out net worth
– The customer is not an account number
– The customer is the rationale for the bank
Remember
234
•A good meeting has to following
features:
Elementary feeling of trust
Sense of equality
Nobody is trying to manipulate
Attendants can separate problems from people
Everybody aims at a win-win situation
Mutual respect
Remember
235
236 Even on the phone a smile is worth a thousand words
237
Selling financial services
Module 8
Conclusions & likely improvements
238
239
WHAT YOU COULD DO AFTER A GOOD SEMINAR
The 20 steps TO IMPROVE on SALES
1. Examine every alternative
2. Use proven sales methods
3. Take the long term view with the short term in mind
4. Change selling proposals that are no longer attractive
5. Consider the implications of the customer’s decision
240
6. Try to foresee and prepare for any objection
7. Always ask what can go wrong with the customer’s
decision
8. Always consider the possible outcomes
9. Always try to balance intuition and logic
10.Avoid making proposals that have a large element of
chance in them
241
The 20 steps TO IMPROVE on SALES
The 20 steps TO IMPROVE on SALES
11.Follow a precedent when it works
12.Kindly challenge the customer’s perception if need be
13.Be aware of cultural elements behind decisions
14.Weigh the impact of decisions
15.Do not be afraid to repeatedly make a point
242
16.Do not be afraid of rejection, think about an alternative
17.Build trust in decision making process
18.Avoid decisions under any kind of pressure
19. If it proves to be a wrong decision, take fast action
20.Never postpone vital decisions – make them quickly
243
The 20 steps TO IMPROVE on SALES
Other final points
• Selling and decision making is not an exact science,
• Behind data there are men and women!
• Thinking is not a tidy process but it should be done with a sense of
order – use a proven selling technique
• Remember that solutions are the seed of new demands
• Lost sales are unforced errors but if you want to win their number
should be limited
• It is always worthwhile to listen to people
• A problem is a solution in disguise
• Brainstorming: reverse brainstorming = in how many ways can this
idea fail?
244
Other final points
• We need critical input from others to remove the filters from our eyes
• Remember the mental roadblocks:
– Lack of facts
– Lack of conviction
– Lack of a starting point
– Lack of perspective
– Lack of motivation
245
246
Conclusions
Various factors play AGAINST us, such as
The changing environment
The pressure on margins
The pressure on market share
The need for substantial investments in IT
The lack of customer loyalty
The lack of differentiation possibilities
247
Conclusions
The making or breaking point is people and systems providing:
There is a market
There is a purchasing power
There are products matching the demand
There is a culture of cost avoidance in order to prevent
cost cutting
There is a culture of marketing and not just PR or
advertising
There is a culture of HR
There is a culture of WINNING
Other final point
IF YOU TRULY WANT TO DEVELOP YOUR SELLING SKILLS,
YOUR TASK IS ESSENTIALLY ONE OF SELF-DEVELOPMENT 248
249
Bibliography & useful websites
• “Principles of Marketing”,P. Kotler and G. Armstrong, Prentice Hall,
International Editions
• “Bank Branching 2010”, J. Svigals, Lafferty Publications
• “Distribution 2000”, J.L. Bauer , Lafferty Publications
• “Marketing Financial Services”, C. Ennew, T. Watkins & M. Wright,
Butterworth-Heinemann
• “Growing brand loyalty”, R. H. Evans, Lafferty
• “E-Brands”, P. Carpenter, Harvard Business School Press
• “Marketing in the Financial Services” R. Claessens, ed.Serbian
Bank Association
• “ Corporate culture in banking” R. Claessens, D. Markovic., ed.
Serbian Bank Association
250
Bibliography & useful websites
• “The HR scorecard”, B.E. Becker, M. A. Huselid, D.Ulrich, Harvard
Business School Press
• “The ten deadly mistakes of the wanna.dots”, R. Moss Kanter, HBR
January 2001
• “Branch management”, R. Claessens & Philippe Wiertz, ed
Promoculture, Serbian Bank Association,
• « Winning » Jack Welch, Harper Collins
• « Strategic Performance Measurement », Chris Aston, Business
Intelligence Ltd,
251
Bibliography & useful websites
• www.teb-kos.com
• www.bnpparibas.net
• www.aba.com
• www.fidelity.com
• www.pictet.com
• www.abnamro.com
• www.traditionalbank.com
• www.hsbc.co.uk
• www.ing.com
• www.lafferty.com
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