Banks spend billions bringing new prospective customers within reach, establishing initial contact with them. Great analytical and marketing talent is deployed to get more prospects to respond by mail, telephone or Internet, or to come into the store. We even buy naming rights for stadiums.

Too often, that's where we stop. Many or most prospects who establish initial contact don't buy, or buy much less than they could.

A single-digit percentage of website visitors become customers—even for services with no minimum charges. Considerably less than half of mailing responders buy. Conversion of telephone leads or inquiries is often even worse.

When we do make a first sale, it often falls far short of revenue potential. This loses additional sales forever. The best opportunity to sell add-ons is immediate.

One reason banks have such mediocre sales success is that they don't recognize or value sales skills. Yet, we're not Walmart. Visitors can't just grab attractive products off our shelves.

Contrast this with other financial selling—auto dealers, real estate and insurance agents, securities brokers—NONE of whom banks have been able to compete against successfully.

Auto dealers know that if a prospect leaves and isn't driving the new car, they've lost a sale. They know that not selling customers up (model, accessories) equals failure. We have no comparable sales focus.

"We don't want to be like auto salesmen!"


That's why financing of automobiles is controlled by dealer salesmen, not lenders. Once in contact with a prospect, the salesman demands the sale now, with maximum profit value. Telephone insurance inquiries result in immediate binders, with payments. Too often our punch line is: "Think about it and let us know."

To do better, gather and analyze facts. At call centers, recorded calls are evaluated for legal compliance. Seldom are they monitored intensively for effective technique, sales results, and to see why so many terminate with no sale, or with too small a sale. At what point and why do prospects who come to our website click away?

The answers typically fall in just a few main categories.

First, we don't promptly deliver a compelling offer calling for immediate action. An offer. Not an invitation to apply and wait, or a set of options to sort out, or a request for further information or documentation.

There is plenty of experience and good practice showing how to do this. For instance, the three credit bureaus sell data to consumers. After 30 years of experience, they do this primarily by appealing first of all to the desire for "free credit reports."  Once anyone raises his hand for a free report, he's fair game for numerous add-ons, at prices such as $17 per month. This can include free trials of 30 to 90 days.

Banks do something like this in waiving first-year fees on reward credit cards—if the customer finally gets approved. But who's selling transaction accounts based on "try it now with no risk, you'll like it"?

Second, we generally fail to deploy people who can convert contacts to sales. Look at how we choose, train and supervise new account personnel. This is not about incentives. It's about whether these are service or sales positions.

A real estate agent or mortgage broker with poor selling skills or little desire to sell won't keep his job. In banks, nonperformers stay for years, believing they're providing valuable information to inquirers.

Do you record and systematically listen to new-account conversations in your branches? If not, how can you possibly know how much account and revenue volume you're forfeiting through inadequate selling? Do you have Operations rather than Sales activating new cards?

The blind lead the blind. EVPs and SVPs who never sold to consumers manage banking officers who maintain the tradition of not selling. In part, that's because the go-getters wanted to deal with commercial customers, not consumers.  When Merrill Lynch was No. 1, the most highly compensated individual often wasn't the CEO, but rather a sales manager.

To sell more, elicit new customers' full financial purchase information right away. We say, "Here's a direct deposit form. You can fill it out later." Get the facts about customer assets, accounts and transactions. Use these to guide immediate cross-sell.

In this space, there've been numerous columns about branch and other consumer banking operations, very few about selling. Maybe when growth came more easily, selling was beneath bankers' dignity. To sustainably increase equity value, it's not enough to cut expenses. Banks have to sell.

Andrew Kahr is a principal in Credit Builders LLC, a financial product development company, and was for six years the founding CEO of First Deposit, later known as Providian.