Comment: Creating a Relationship-Based Sales Culture

Thrift institutions, as they have been structured historically, are becoming obsolete.

With their monopoly on home financing in America gone, and with the commoditization of both sides of their balance sheets complete, many thrift executives have determined that conversion to a commercial bank will provide the necessary face-lift and a sure future.

We do not believe that the mere window dressing of charter conversion is enough to get the job done. If the underlying company, customer base, and employees do not undergo fundamental changes to truly implement a relationship-based sales culture, a charter conversion becomes a transparent ploy to enhance stock price multiples and avoid deposit premiums rather than a true strategic move.

Traditional thrift customers are single-product customers: borrowers via a home mortgage or investors in CDs. Consequently, most have traditionally been "rate surfers" looking for the best deal on a single-product opportunity. The best commercial banks have had the luxury of long-term, multiple-product relationships, and therefore they have customer bases that are less price sensitive.

At Roosevelt Financial, for example, we grew our market share via acquisitions. Then, we set out to expand relationships per household and share of wallet knowing full well that this might cost us some single- product relationships. We are prepared to purge our customer ranks of rate surfers and expand our services with relationship-oriented customers.

Historically, our employee base, like those of many other thrifts, has been made up of order takers - people who execute transactions efficiently while focusing only upon the single product, instead of the overall needs of the customer. Relationship banking has to be a non-negotiable part of employees' jobs, and executives need to be fully braced for significant turnover as employees who are not motivated by this new environment choose to leave.

Relationship banking entails customers satisfying most of their financial needs with a single entity. Each financial need that gets satisfied entails a sale. Selling is not a dirty word: selling is relationship banking at its best.

To achieve this transformation, thrifts need to install a disciplined sales process. We intentionally call it a "process" rather than a training program. This is not an event. This is forever.

Discipline is the critical success factor in implementing a sales culture, and underlies the following 10 key elements in the sales process execution:

1. Demonstrate management commitment. It must be clear throughout the ranks that management is committed to sales as an integral part of the job definition of every person in the company. Executives have to be just as accountable for success as any other employee.

2. Sell only profitable products. Sales do not add value to shareholders unless they add profits or contribute to customer retention.

3. Make delivery systems efficient. Making every product profitable requires low cost production.

4. Keep customers. A customer retained is more valuable than a customer attained. Many of us spend tremendous resources attracting and acquiring new customers, at the same time neglecting our most valuable asset - existing customers.

5. Get the right people. We find it is easier to convert sales people into bankers than to convert bankers into sales people. We've hired a shoe salesman, a lawn service specialist, a dress shop manager, bookstore clerk, and other sales professionals who were attracted by our sales culture and are prepared to learn banking as they go.

6. Make sales a priority at every level of the organization. All of us, from the custodian and mail room clerk to top officers, know that without an effective sales culture, our organization is not going to reward shareholders or earn the right to remain independent.

7. Use compensation programs to reinforce the importance of relationship selling.

8. Target the right customer. Not all customers represent equal opportunities for the company.

9. Measure activities and results. The selling process assumes certain activities are prerequisites to results. By measuring the activities and making sure they take place, results can be almost predictable.

10. Follow through, follow through, follow through. Tenacity is a critical factor. Sales can be exciting but can also be exhausting. Everyone has down days and needs some prompting to continue fighting the war for the customer relationship. Management involvement - walking around the branches, continuous conversations with line personnel, realignment of the back office to be more customer friendly, and many other activities - are required to communicate every day that sales is an integral part of our mission.

Ms. Bird and Mr. Bradshaw are chief operating officer and chief executive officer, respectively, of Roosevelt Financial Group, Chesterfield, Mo.

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