IN RESPONSE TO increased competition, Provident Bancorp decided it needed to become more aggressive in its retail sales operation and more efficient in processing new-account information.
About two years ago, the Cincinnati-based company embarked on a plan to expand existing customer relationships and to use technology as a tool for selling.
"Historically, we had been a deposit growth driven operation," said Robert L. Hoverson, an executive vice president at the $4.7 billion-asset banking company. "We realized there was a need to change and make a concentrated effort on the retail side. In order to do this we needed to look to technology for help.
"The key to successful selling is to have the right tools," he continued. "And we did not have the necessary tools to get the job done."
The solution was to develop an in-house platform system that would allow it put customer and product information at the fingertips of its sales representatives.
"We could not find an existing system that was synchronized with our style or provided the flexibility to react instantly to changes in the marketplace,'' said Roland E. Koch, a senior vice president.
"With the system we developed, the bank can modify our screens at a moment's notice."
By having this flexibility, the bank believes, it can bring new products to the market faster than any of its competitors.
The platform system has been created from a basic presentation software developed by Dallas-based Argo Data Resource Corp.
Provident is using customer information file software from The Kirchman Corp., Orlando. The two software programs are connected through the bank's proprietary system, called Relationship Administrator.
The data used for the customer information file is stored on the banWs mainframe and moved to the platforms through a series of local area networks.
The bank uses International Business Machine Corp. personal computers and operates a 3090 mainframe. The system has been in place since 1992.
"To us, the Argo system is used as a sales aid; it is a way for the salespeople to interact with the customers and make sense," said Mr. Hoverson.
"It provides access to the customer information file to create a selling environment where the people can sit there and see how the product will work," he continued.
Provident has been steadily trying to change its selling environment by setting goals and rewarding employees for good performance.
"The trick these days is to change the environment and make it full of people who are money-motivated," said Mr. Hoverson.
To achieve these goals and change the sales environment, the bank has integrated the platform automation system with two incentive programs one for selling specific products, the other for selling a bundle of products.
Through the use of LANs, the bank tells the staff which product it should put emphasis on selling - as well as the incentive that will be paid.
And customer service representatives are encouraged to cross-sell.
"The staff gets a greater reward if they sell a bundle of products at one sitting opposed to selling products individually," said Brad Smith, a senior vice president.
"Our theory behind this is that a person only gets so many sales opportunities and we want the staff to maximize any opportunities they have."
In most cases, the sales staff presents the information in a way that explains to customers the value that the product offers them.
"We have found that the consumer has reacted very favorably to the invitations to buy new products," said Mr. Smith. "Customers are not being turned off, because it presents them with an opportunity to make money."
"It is 'a find a need and fill it' approach," said Mr. Hovenon. "If we hear this, we will ask if they need that. For the most part, we have found that people appreciate the fact that we asked them - because they feel we have perceived that they have a need."
The bank's technology makes it easier to fill those needs.
"We developed our platform automation screens not with the intent of data entry or document preparation; instead we designed the screens with sales and product presentation orientation," Mr. Smith commented. "The screens have been built around importing the customer information."
"On the platform project we started at the end," said Mr. Koch. "In most cases data entry and document preparation could be done, so we decided to go with the sales first."
The theory behind the development was that if the bank could get the sales portion up and running and it could make a difference in the operation, management would commit to the operational side.
"We designed the screen flow after a specific sales methodology," Mr. Koch said.
"We learned that technology does not do the selling, it is the people who do the selling; and as long as they have the proper tools, they can be successful."
According to David Medeiros, a consultant at the Tower Group in Wellesley, Mass., a lot of banks have tried to turn tellers into sellers, but many have found that people don't go to tellers to buy new products and services.
So, he said, "A new trend is to have tellers refer customers to platform people."
In the last year, the tellers at Provident's 63 branches have generated over 140,000 referrals to the sales staff. Of the referrals, the bank has closed 20,000 sales.
"The platform technology leads the selling agent through the process of comparing the numerous products and processing the new account request quickly," said Mr. Koch. "Instead of taking 20 minutes to create an account we can do it in four or five."
Provident's next move will be to take the referrals and optimize the number of cross-sales that can take place.
"Over the last few years we have been putting an infrastructure in place that allows us to sell and service our customers on a relationship basis," said Allen L. Davis, president and chief executive.
"We have incorporated all of our programs; that allows us to have high distribution and increased market penetration through the development of a defined sales culture."
In 1992, at about the time the bank turned the system on, 25% of the certificate of deposit orders processed had one or more errors. The bank has since cut that figure to 2.5%.
"The system has allowed us to experience a dramatic increase in quality," said Mr. Koch.
"The system has made us much more efficient in the back office and is leading us to greater customer satisfaction as well as sales.
"And we have only just started using it."
At a Glance
Percentage of order entry errors for certificates of deposit: