It's a rare bank these days that can't boast it has a telephone call center to handle routine customer inquiries automatically.
Indeed, such systems have become nearly ubiquitous. One survey last year found that 87% of all banks had at least a basic telephone system, and another 7% were in the process of installing one.
But while banks have been largely successful in freeing branch personnel from handling routine inbound calls, they have been less successful in using the telephone for outbound calls to generate sales.
Wachovia Corp.'s chairman Bud Baker told Management Strategies earlier this year, for example, that some branch personnel spend "an alarming amount of time" on tasks other than selling. And that's coming from an institution that consistently posts some of the strongest numbers in the industry.
Many bankers have begun to see the benefits of the telemarketing - and not just major credit card issuers like MBNA Corp., Chase Manhattan Corp., or Citicorp.
"It is a trend," said Andrew Mayer, a consultant with Ernst & Young in New York. "Banks are trying to use people who have never really been sales people before to actually start promoting and selling products."
Take Household Bank. The Prospect Heights, Ill.-based thrift wanted its account managers to be more proactive in contacting consumers and small businesses. But it faced a problem: the staff feared making cold calls.
"We really didn't give them the core skills that were needed to understand how to pick up the phone and make that contact with the customer and come to a successful conclusion," said Dennis Kelley, director of training at the thrift, a unit of Household International.
Mr. Mayer said Household's initial experience is not unusual. "(Some) people don't recognize that selling is different than just being a customer interface," he noted. "You can have an outstanding customer service representative, but if they are not trained in sales, they will absolutely bungle the sales job - and might also jeopardize the customer service aspect."
Household soon found that in order to improve its sales culture, its employees needed training. Said Mr. Kelley: "The need was to provide them with the skills to help them overcome the fear that they had of picking up the phone and making that cold call or making a call to a customer who isn't expecting the call to come in."
In 1993, Household selected a video-based training system from the Fortune Group, an Atlanta consulting firm.
The 2#1/2-day video course teaches the basics of telemarketing. "They go through several modules where they learn the importance of telephone etiquette, how to approach the customer, how to overcome objections, how to close the sales, all the basic steps of selling," said Mr. Kelley.
A trained bank employee is also on hand to support the video course. The facilitator guides account managers through a series of exercises, such as role-playing and group discussions, to reinforce what they have learned.
After a brief period, the newly trained sales staff would be brought together to telemarket in a supervised environment. "As a group they would make those outbound calls," said Mr. Kelley. "The facilitator, and probably at least one district manager, would be there to help them and encourage them, and answer questions as they came up about this new technique."
Later, he said, trainers would conduct follow-up sessions in branches. "They may take a module or section of the program and conduct a minimeeting where they would reinforce some of these skills."
Initially, account managers' telemarketing skills were put to use in a home equity loan marketing campaign.
The account managers approached existing customers as well as prospects.
The names came from a variety of sources, including the account managers' own lists of contacts and referrals from customers or fellow employees. Household also supplies names of people who received promotional mailings.
While the number of loan applications increased, and the effort was successful, Mr. Kelley conceded that the role of telemarketing is hard to determine.
"It's hard to say how much of it was because they ran a super marketing campaign, how much of it was just the economy, how much of it was the time of year, and how much of it was the training," he noted.
The success of Household's focus on telemarketing is also hard to gauge because of sweeping changes at the thrift in recent months. Earlier this year, Household International moved to abandon its goal of maintaining a far-flung thrift, saying Household Bank did not have the economies of scale or market share to be competitive.
In February, the bank sold 90 branches in California, Virginia, and Maryland. A month later, it announced the sale of 24 branches in Ohio to Star Banc Corp., Cincinnati.
Instead, Household Bank is focusing on the greater Chicago market. Last year, it bought 26 branches from First Nationwide, the California-based savings bank.
The changes leave Household Bank with 57 branches, not counting four in Indiana that are expected to be sold in the near future.
Mr. Kelley said that because of the restructuring, there has been little feedback from telemarketing efforts in recent months. But earlier comments from account managers were positive.
"Telemarketing in and of itself is intimidating for them," he said. The caller, he noted, can be ignored, disconnected, or treated with something less than complete respect.
But the training "allows them to understand how to actually develop the call in such a way that it can end up being successful."
"If it doesn't end up in a sale, at least the majority of the time it's going to end up being a better call than they've had before," he continued. "It helps them to overcome that fear of rejection they have."
The classes are also structured so that employees can object to the approach sales used in the video. "That's very important because they don't feel like they are being spoon-fed something whether they agree with it or not."
It's also important because the video itself is not specifically designed for the banking industry. So every trick or technique may not be appropriate for bankers, said Mr. Kelley.
"What's important is that as a group we determine what is the right thing for our business and then we agree to that," he said. "And then we make every effort to make that work."
Currently, four Household employees are certified to run the classes, and Mr. Kelley said he is planning to train others.
Further, he said, employees brought in as a result of the branch purchase from First Nationwide need to take the class.
"Our intention now," said Mr. Kelley, "is to take newly acquired employees or employees who have joined the company in the past six months and start to provide that training to them here in 1995.