While a crystal ball into the future might not exist, we have something even better: data, including macroeconomic and local market insights integrated with insights on small businesses and their owners.
Join our panel of experts as they discuss why trusted advisors should become experts on their local economies and have an in-depth understanding of small business owners' needs to build trust and establish new relationships.
What you'll learn
- The career benefits of taking the time to know and understand your local economy
- Which insights are essential to know about your local economy
- How to leverage local economy insights combined with company/contact intelligence to build an effective business development strategy to win the trust of small business owners
- Using local trends to efficiently assess lending or investing risk with greater precision
Transcription:
Martin Wise (00:12):
Stephanie, we're good to go. Alright, pause at the end. Thank you. Not at the beginning. Th is feels a bit like the morning after, the night before, doesn't it really? But thank you for coming out. We'll try and get this off with a good pace. And as last year, I'm thrilled to be joined by Bobby Martin, who's the Founder and CEO Vertical IQ. I'm Martin Wise Founder and CEO of RelPro. And Charlie Griffin, who is the man of the moment at Bank of America will introduce himself in a little bit because he has the role that's in the program, but he has a new role as well that he'll tell you about. So everybody in the room I think will have in their mind how important it is for small business and business bankers to build that trusted relationship, trusted advisor relationship with business owners and CFOs and so on.
(01:12):
It's come up in pretty much as usual, comes up in pretty much every single one of the sessions that we've had already. What we're going to get into today is more the practicality of how you can drive the development of that trusted advisor relationship at scale. Because while at the end of the day, it's all about the character of your individual frontline bankers, there's an awful lot that can and needs to be done at the institutional level to make it possible. And we will talk about this more today. There's obviously a lot of tools and analytics and data and so on, which is partly where Bobby and I come in on a day-to-day basis. But at the end of the day, if that's not married with a culture and a process and set of practices, then it's all for naught. So Bobby, you got the clicker, do you want to click for the next one?
(02:09):
Yeah. So today we will consider one of the angles and then we'll broaden it out during the q and a. But one of the angles that can be used for a banker to become a more trusted advisor, and that's through the lens of being more of a local economic expert and advisor, particularly in this market environment, I guess I would've said it last year as well, particularly in last year's market environment. It is so important for the banker to engage with business owners around really what's happening in the local market. And so Bobby will speak to introduce the topic in a minute around how important this theme is and how it can give an edge to what bankers are up to. We definitely would encourage, we'll will have a couple of questions at the end of Bobby's remarks, but I haven't heard compared with previous years, I haven't had too many audience participation questions and we would certainly welcome that. So we'll endeavor to bring you in and please think of tough questions to ask us all. So one more click Bobby, and then there we go. So I kind of introduced myself, but Bobby, do you want to introduce yourself a little more? And then Charlie?
Bobby Martin (03:26):
Sure. Bobby Martin with Vertical IQ. I'm one of the Founders along with Susan Bell here as well. I was a frontline banker back in the nineties. I was a calling officer and just found through that experience meeting with business owners if I went all in on their business and all in on being able to answer that tough question is, Hey, what are you seeing out there? It's kind of like business owners when you first sit down, what are you seeing out there? It's like, let's see how sharp this person is. And I started geeking out on a lot of these things and I just noticed it made a huge difference in winning deals and getting to be the relationship manager for companies in that fierce competition for businesses. And that led to us starting Vertical IQ. So that's a little bit about my background. Charlie? Charlie.
Charlie Griffin (04:18):
So Charlie Griffin, I serve as the National Client Acquisition Executive for Bank of America, and I also serve as the South Carolina Market Executive where I run the P and L. And so I've been with Bank of America for 13 years. I've been in financial services for about 20. And I have to say it's such an ever evolving environment at Bank of America. Such a wonderful culture. I've been there 13 years, but I still feel like I'm in the honeymoon phase, right? Because I love chain. Just really kind of an opportunity to evolve into the better version of yourself on the other side. But I have to say, I've been thrilled for months when Bobby and Martin asked me to attend because RealPro and Vertical IQ are really incredible partners to the bank and certainly how we help prepare bankers through readiness and sales enablement. So excited to be here with all of you today.
Martin Wise (05:09):
Thanks Charlie. So Bobby, do you want to click away and introduce the subject some more?
Bobby Martin (05:15):
Sure. I thought what I would do is just take a couple minutes, three minutes or so to kind of tee this up so you see more specifically what we're talking about when we talk about being a local economist. And then Martin has several questions for Charlie and we mainly want to hear from Charlie because he's got the most experience and the practical side of it. And then of course y'all ask questions as well and we can make this a dialogue. But to tee this up, going back, you can see Barlow research and Andrea from Barlow Research, great company, Barlow Research, when they asked business owners what's the best way to gain their attention? And one of the most popular answers was understand my industry and my local economy. So you could see it's important to business owners. And then of course sharing content is almost always especially relevant.
(06:06):
Content to business owners is almost always an important way to get business owners to consider your product or service is sharing content relevant to their roles and what's relevant to them, their local economy, which is where we're headed of course, just a few of the ways y'all that bankers add value. And what this slide is, is saying big picture. What are some of the most important ways that bankers build that trusted advisor status? One is planning, decision making and finance. And you can see from the business owner perspective the specific ways that business owners appreciate their banker. If they can add value in these facets, you can see and read 'em for yourself. Things like risk management, things like planning, how much capital they're going to invest and the most efficient way to raise that capital and deploy that capital. All of these are value added concepts.
(07:12):
I just want to take you through a very quick example. Let's just say that this happens to be a brewery in Kansas City, random example. And they're thinking about this. Brewer's thinking about opening a new location and having a brainstorm session with their banker, his or her banker. And you can see that the banker may not know the answer, but some of the things the banker could add value is having economic data that the business owner may or may not have thought about. The brewer may not have seen the growth, explosive growth of breweries in and around the Kansas City area that's actually grown from about 10 to 35 or maybe the density of breweries in Kansas City versus the country as a whole. And again, business owners, they really use their gut instinct to make decisions and they're street smart, but they don't always have data for economic planning.
(08:11):
And that's where the banker can step in and help them trust their gut, add one more piece of data for their gut instinct. And you can just kind of see these graphs where it's like the density of breweries per a hundred thousand people in Kansas City is pretty close to the national, but it's a little less dense than typical. But of course this all leads to good conversation. The biggest thing of driver of success may be the economy in and around Kansas City. And I mentioned at the beginning it was like, can your bankers geek out on being local economists? Is this something that you want to do to win business owners and help them succeed? Well, one of the things is having a very firm understanding of the GDP in Kansas City versus the GDP of the country as a whole. And it's like Kansas City over the last year grew faster than the overall economy, but the year before we grew slower than the overall economy. And the business owner thinks this banker's smart, and this is just another example of income growth. Maybe they want to say, okay, what's been the income growth because that drives everything consumer spending, et cetera. So that sort of sets us up for a conversation to dig deeper into this, and especially from Charlie's Vantage point, some of his ideas. And he has some good ones because I've seen his notes, so listen up, and that kind of turned it back over to Martin.
Martin Wise (09:46):
No, Bobby, thank you. And for us at RelPro as well, that whole theme that you've talked about with, oh, what's happening here? Okay, thank you. Yeah, this whole notion about empowering bankers with information in local markets has been important to us. We recently brought in banking market research from Revelle as part of the RelPro platform so that bankers can also see which banks are doing better or worse in their local territory as well. It's all about, as you say, probably having arming bankers with information that helps 'em to have real down within the territory kind of conversations with their clients and prospects. But Charlie, coming back to this overall, the RM is really at the crux of the delivery of this trusted advisor relationship that we're talking about here. And of course I know you and all the banks in the room here take a lot, pay a lot of attention to hiring the right kinds of people, growing the right kinds of talent. But how do you do this at scale? How do you really inculcate the team as a whole with the kinds of skills and attributes that Bob has been talking about to build some of these local relationships?
Charlie Griffin (11:02):
Sure. So certainly appreciate the question. I think you mentioned scale, so I'll talk about scale first. And so it's important to set the tone. So business banking at Bank of America serves the entire continuum from startup to 50 million in revenue size companies. And we're the number one business bank in the country. We're also the number one small business lender in the country. And so when you talk about scale, you really have to approach that from an omnichannel investment. And so digital then comes into play. We invest 12 billion annually in technology with 3 billion of that directly tied to brand new or new tech initiatives. And so our investment in digital really outpaces our peers and it's really provided us with the edge to meet clients and prospects where they need us. And so it's about delivering that intelligent digital forward advisory experience that they are absolutely expecting they've moved past.
(12:03):
Digital is a nice to have and it's a must. It's a must to get into the consideration side. And so new clients tell us time and time again that our size, scale and stability immediately moves us into that consideration. But to answer your question, what matters most to them? So we talked a little bit about getting into the consideration shut, but what matters most, it's the banker and it's their connection to that banker and how they engage with them. And so again, the banker is paramount to winning new clients. It's also paramount to keeping your clients in the door. And it is the ability for a banker to leverage what they know their local economy, the knowledge of the local economy to really engage the emotional response that you need from a client or a prospect in order for them to even consider making that move.
(12:56):
Because you go more upstream into a medium-sized business, more complex clients just don't switch. There's got to be an event that drives that. And so for me, and what I tell bankers consistently is its responsiveness, it's persistent, persistently engaged. It's really genuinely being interested in their company and they want to know that they actually like their banker. And so you've got to cast the right banker. And most important, it's being prepared and we really help bankers solve for efficiency and being prepared through incredible partners like RelPro and Vertical IQ to deliver that meaningful intelligence and that relevant local industry insight and the data points that our bankers used to demonstrate the range really as an advisor to the prospect. So really good question.
Bobby Martin (13:51):
Oh yeah, go ahead.
Martin Wise (13:53):
So Charlie, as you say, you have the investment in technology, you have the overall behavior patterns and so on that you want bankers to have, but I sort of want to drill a bit into this sort of really how you institutionalize this some more. So how does the bank go about coaching the rms to actually behave in that trusting advisor build relationship building kind of pattern while a few rms are born that way, there's not enough of them born that way and you have to coach 'em as well in the room. So with all of the investment in technology and it's nice to you spend 12 billion, I guess that's a bit of upside for Bobby and I here, but with all of that investment in technology, how do you actually change the human behaviors of you and coach RMS to do these kinds of behaviors?
Charlie Griffin (14:55):
So if I could have someone advance the slide, that'd be great. So I think it's important to remember, and apologies, I'm asking for the right side. Thank you. So it's important to remember what you're up against to convert, right? So for a medium-sized company, it's important to remember it takes about three years and 10 unique meetings to convert that medium-sized company to a prospect. And so in this segment, not only do you have to be well prepared and knowledgeable, you got to be consistent or you kind of move yourself into a vendor status. And clients and prospects tell us that if you're not engaged and you're not bringing relevant local information, they sort of push you out of the consideration set because you're not adding value. And so I tell bankers all the time, it's about your process. I'm very process oriented. And so 78% of successful connections really require anywhere from about six to 12 touches.
(16:00):
And so this is where consistency is critical. So more calls or more touches, and that really equals more successful connections. It's important to note only 2% of successful connections are made on that first contact and 50% of the competitors that you're up against, this is where they give up at one, no. And so if you just keep going and you follow that process, you're already ahead of half your competitors. And so about 80% of those connections we see made in between that eighth and 12th contact. And this is absolutely where I encourage bankers to focus their time. It's how well you script what it is you want a decision maker to hear when they pick up the phone. And so you've got to be incredibly concise and it's concise in a way that again is engaging that emotional response. And I like to use the goldfish analogy, and this is based on data from our economic Bank of America Economic Institute.
(17:01):
But if you think about a goldfish swimming around in a bowl and you walk up to it and they give you their attention, you're going to get about 11 seconds from that goldfish for them to decide whether or not they're going to give you more of their time. That's fascinating. It is interesting because how much you get from a human, take a guess six, 10, you're going to get a second less than a fish. So think about that when a decision maker picks up the phone, you've got to be concise in a way that really engages that decision maker. And it also, you've got to differentiate yourself and provide a solution for a problem they might know they have or really helping them look around a corner and solving for something they didn't even know what's going to occur down the road or a problem they might be facing.
(17:54):
And so you've got to really get in there and use the local data, the relevant insights that my partners here provide. And you've got to identify that pain point and then you've got to agitate that pain point and then quickly solve for how your team can deliver. And you've got to do it in a really short amount of time or what do you get? I'm not interested, but if you advance in a way to pull that emotional response, it's going to set you far apart. But what I leave the entire field, and it's right now we've got about 750 legacy business bankers in the field. I leave them with three things. So number one, it's really the precision in which you deliver the value prop that you want them to hear. And then number two, it's demonstrating your range as an advisor to your prospect. And the most important is process. It's being consistent in your delivery so you're present for that event that will ultimately make them decide to move to you.
Bobby Martin (19:03):
I remember back in the nineties gave me the inspiration for this sum is there was a banker from bb and t and his name was Sam Catlett and he was just a really good calling officer and he was winning a lot of deals. And I remember we asked the steel manufacturer, who was our customer, what made Sam such a good banker? And I remember he said, he's smart and he asked good questions, questions are asking good questions, is repeatable and listening actively. So that's something that is scalable, but being smart, well, you got to give them tools and all that. It's a little more of a complex thing being perceived as smart, but I think that's just asking great questions goes a long way.
Martin Wise (19:49):
Well, I think the other, so yet another takeaway then for me from this conference already is what Charlie just said. I think it speaks to all of us in this room. So you're saying part of the way you scale this and you coach people is to make sure that bankers don't fall into the trap of being seen as a vendor, be a partner and an advisor, not a vendor. I think that's a really very lovely succinct way of describing it because you're right, the moment that you feel as a banker or frankly as a software and information company for Bobby, and I mean we don't ask our clients to call us partners, but they all do. And it gives us such a great feeling when they do that. You can't tell someone to treat you as a partner but you or think of you as a partner, but it happens because of the way that you behave with them and it is the worst to fall into the trap of being seen as a vendor. So I think, and that's such a communicable thing to a banker, isn't it? Don't become a vendor that's just another vendor.
Charlie Griffin (20:54):
So Bobby brought up something again about scale, and I probably tie back in. So if you're a banker in this room where you have a set of bankers and you're trying to drive this at scale, minutes matter, every minute matters. When your bankers are preparing, if they're spending 40 or 45 minutes preparing their research, their question set, they probably that prospect or that client has probably already received two calls from another bank and accepted one. So again, minutes matter when you're trying to drive this at scale. So you've got to do it in a way and you've got to outsource, right? I think about when I had really young children and I got the advice of, listen, you got to start outsourcing. Give yourself a two hour date night with your wife. So think about this when you are developing your strategy and invest in the business. And so you do that by outsourcing to partners like Rail Pro and Vertical IQ so that you can take some of back of that capacity in those minutes and give that back to actually calling on clients and prospects to deliver the value prop you want them to hear.
Martin Wise (22:02):
That's a great segue, Bobby. So over you in terms of then the role of information data, and I know it's the essence of how you founded Builder like you in the first place, but what do you see as some of the other topics then where information and data can help this relationship building process?
Bobby Martin (22:23):
Oh, sure. A few things. Number one, when I think of information, a big part of it too is actually sharing content with business owners, providing content that is relevant to them and giving it to them physically and then help them financially with that. The other thing is being able to help business owners with risk. Banks are really good at risk. Banks have to be, I tell my friends, I say, okay, so you want to start a bank. Let's say you're right 99% of the time, how are you doing? You think you're doing good? No, you're not doing good. You're out of business. You got to be right 99.6% of the time. So banks are really good at risk. So a banker should be in a position to sit down with a business owner and talk about risk, which of course leads to value and bankers are good at understanding what could go wrong. And so I think that's another place they can add value. And also if y'all have questions, please raise your hand, especially if Charlie, and see how they're doing things. But I don't know if you have anything to add to what I just said too as well.
Charlie Griffin (23:32):
I don't think I could have said it better myself.
Martin Wise (23:35):
Cool. So I was going there too. So we've got six minutes and 22 seconds left. So I have some other questions that I can ask this group, but are there any questions that you all would like to throw to any of us first?
Audience Member 1 (23:54):
So Bobby, I have a question for you and it's really give a few more examples of how a banker can work with a business owner on ways to manage risk of new business.
Bobby Martin (24:05):
Sure. Well, I think one might be knowing what the risks are inherently to those types of businesses. From what I understand, one of the big risks if say it's a lumber company is that prices of lumber tend to fluctuate like crazy. How are you mitigating that risk? And of course, hopefully that will lead to the need for a line of credit. As prices go up, prices go down. And so identifying in advance what those risks would be inherently to a particular type of business leads to a very rich conversation. But I think that's one thing that they can do and certainly benchmarking the companies, and y'all probably familiar with this, but some bankers, what percentage of your bankers are actually doing this? Where you look at the industry as a whole and their financial benchmarks, and then you compare the company to the industry and you have a conversation about the differences in the current ratio and why they're running a much lower current ratio as an example, or leverage the average company and for your type of company has leverage of three to one. You have leverage of only one to one. Are you comfortable getting leverage to two to one $2 of debt for every $1 of equity to grow your business faster? So those are just a few examples.
Martin Wise (25:33):
And this is why we love so much having created this integration between the industry perspectives in Vertical IQ with the company and decision maker perspectives in Borough, because all of you are running generalist sales forces effectively. And so your bankers need to gen up very quickly and no relative to the risk and other asset financial aspects of the company, they need based on the industry to know what are some good questions to ask to really start the conversation, build the trust. And that's where, I mean, we picked what four key sections of Vertical IQ content to sort of flag immediately to bankers within RelPro. And the core preparation questions were one of those because they're a fantastic resource to help bankers be smarter and build relationships.
Bobby Martin (26:22):
Yeah, absolutely.
Martin Wise (26:23):
Absolutely. Charlie, anything that you would add on this?
Charlie Griffin (26:26):
Actually, yes. 20 years ago when I took my first job in banking, I remember spending so much time in the car on the way to see a new client writing out questions and how much time was I wasting? If you think about the fact that I was a pretty green banker at the time, I was good, but I was green and I'm sitting asking these questions, did I really ask those questions in a way that presented confidence? Probably not as well as I could have. But with Vertical IQ, they give you cues and then immediately immediate follow up questions. So again, it's just backs back to taking back minutes in each day and giving your bankers back more capacity.
Bobby Martin (27:05):
Sure.
Martin Wise (27:06):
Well actually this whole thing gets back to then please we're going to ask another question. So think about it. It gets back to this point about scaling as well, right? Because I remember when Charlie's organization rolled us out seven years ago now, of course they wanted RelPro to help grow their business, but actually the business case to roll us out was that they found that the bankers were saving 15 to 20 minutes per prospect in being able to then go about their business and that multiply 15 to 20 minutes times the salary or be a weighted cost of a bank and we're have a pay for anything that we're talking about here
Bobby Martin (27:49):
Adds up in a hurry.
Martin Wise (27:50):
Yeah. And is there another question? Yeah, over here. You should just stay still
Audience Member 2 (28:02):
Guys. Super interesting conversation. I'm curious, so you guys obviously taken a lot of economic data from a top down approach. How are you leveraging a more bottoms up approach, especially in the cases where you have a customer's treasury or operating accounts are using that data to basically marry the economic data you're seeing to what they're actually spending their money on and suggesting sort of recommendations or how are you guys thinking about that?
Martin Wise (28:29):
Charlie, where are you spending that 12 billion?
Charlie Griffin (28:33):
So it's a really good question, and this is back to investing in your platform. So some of the dollars I mentioned go into a tool that we have developed called Peer Profiler. And because we are the number one business bank in the country and the number one small business lender, we have data on all of our clients. And so as as a business owner, if I came to you and you were in a manufacturing industry or say a distributor, I can compare all of the companies that we already bank, we receive financial statement information on and compare you and I can give you your average receivables days, whether you're ahead or below and said, Bobby mentioned this as your banker starting to benchmark. And so we took it a step further and absolutely benchmarking, but we do it in a way that's efficient. And so we run it through a model almost like spreading, and then it gives us back some really meaningful intelligence that a banker can use to really demonstrate again, their knowledge and how prepared they are. And again, it's their range as an advisor because clients and prospects really need to know that you're going to be there and that you can deliver for them in ways that others can't.
Martin Wise (29:45):
Yeah, it's a great question honestly, because you're right, the real power of what we're all talking about here is when you bring the external third party data that Bobby and I can bring together, and then you marry it with the data that's behind the curtain within the bank. And more and more the things that we are all doing together is about how to join that external and internal data together to give the bank an even more informed picture of how to build these relationships. So it's a great question. Thank you. Sure. We're out. We're out. We could talk all day, but that may not be good for you all. But we're very happy to talk, I know at our respective booths. And Charlie is wearing a deliberately distinctive green jacket so that you can find him as well. So thank you for coming everybody, and hope you continue to enjoy the comforts.