Attracting Deposits

March 14, 2023 | By: Nick Miller, President, Clarity Advantage

The deposit game is “on” again. Experiencing run-off and potential recession, banks are scrambling to replace lost deposits and fund new loan growth. How best to play?

It’s not easy. Absent trigger events like bad service or irritating fees, companies that are not highly rate sensitive are reluctant to switch banks or deposit accounts. Further, since balances often follow credit facilities, recent and future changes in bank credit appetites may mean that bank business relationship managers (RMs) need to change sales strategies.

The trick is to adapt the deposit sales game by targeting efforts, demonstrating more value and finding any problem to solve. So where do you start?

Choose Target Industries

When you’re facing potential recession or changes in your bank’s appetites, it’s helpful to remember that your role is to find deposits and structure loans that meet those appetites. Our “good customer” today may not be our “good customer” tomorrow.

For deposits, invest time with industries and companies that accumulate significant deposits and use cash management services. These may include the typical C&I, professional services, and real estate-related entities. They may also include organizations you wouldn’t normally consider if looking through a credit lens, for example, labor unions and arts organizations.

Second, leverage industry intelligence platforms, trade publications, your underwriters, professionals who serve those industries, and your clients to get smart about those industries. What strategic, operating, or financial challenges are they facing? What strategies do they use to address those challenges? Where could your bank or personal network resources share ideas or expertise to help?

Choose Prospects

With target industries chosen, the first and best route to prospect selection is introductions from current clients, professional services friends, and industry contacts. Leverage their knowledge of “who’s who in the zoo” to introduce you to companies that meet your selection criteria.

Second, leverage solutions like RelPro to identify companies and key contacts in specific industries filtered further by geography, location, loan filing history, and buyer intent data. Then, check back with your network members to see whether they could introduce you to any companies you’ve identified this way. LinkedIn is a good vehicle for this.

Demonstrate More Value

Then, the question is: What value can you or your bank demonstrate that would be sufficiently strong to overcome the hassle of meeting with yet another solicitous banker or moving primary accounts to another bank?

Whether you’ve been introduced or not, you need to approach prospects with strong reasons to meet that demonstrate your grasp of current industry or company challenges and your experience addressing them.

Your insights into high-value reasons to meet come from your research. Look first to RelPro’s research capabilities – buyer intent signals, prospects’ current lenders, relevant news associated with your target prospects, and the implications of industry and economic forecasts.

Once you’ve secured a conversation appointment, prepare so that your prospects see value in their time with you. Again, leverage RelPro’s research capabilities, industry intelligence platforms, and insights from your conversations with your customers and network members:

  • Build a list of “anticipated issues” that the targeted prospect companies and their owners or leaders may be facing.
  • Develop proactive points of view – things they should know or should be thinking about.
  • Generate lines of discussion – questions to ask, conversation transitions.

Then, during your prospect discussions, briefly defer conversation of impending or requested transactions so you can understand the broader set of challenges and opportunities you might be able to help your prospects solve. Ask questions about:

  • Past and present performance, future vision, and goals.
  • Company operations – business model and execution, changes needed to meet future goals.
  • Management team – how they see their current problem set. What challenges are they addressing now?

To begin earning trust and moving the relationship forward, choose any problem that you think you or your bank or community networks can solve and propose to solve it. The problem may or may not be related to deposits or other services you and your bank can provide. If not, you prove your value and earn their trust for a relationship and the deposits by proving value on something else.

Nick Miller and Clarity Advantage help banks and credit unions attract and deepen small business and business banking relationships, faster, through content marketing, focused sales tactics, and training that increase banker competence and confidence to expand community networks, provide value beyond bank products, earn business owners’ trust, and broaden sales conversations. Find more articles like this, resources, and Nick’s entertaining Weekly Sales Thoughts here.

Contact information: Nick Miller, President, , 508-733-3754