Drive Deeper SMB Banking Relationships by Becoming a Trusted Advisor

“If you always do what you've always done, you'll always get what you've always got.” - Henry Ford

Powerful words that encourage taking bold action. Technological advancements, competition from new sources, a volatile economy and shifting consumer preferences are changing how business owners make critical decisions. As a banker, are you seeing more split relationships from your small business and middle market business (SMB) customers? Beginning in March 2023, following the collapse of 5 U.S. banks, more SMBs have spread out their banking relationships. For bankers to win, attaining trusted advisor relationships with your clients is essential.

What is a Trusted Advisor?

Many people use this term but may define it differently. Think about it from the SMB decision maker perspective. A trusted advisor is an informed resource you trust to advise you on critical business decisions. They understand the challenges and opportunities facing your business in relation to your goals. They are a sounding board for you while also challenging you and offering new insights. They are available and responsive.

How Often Do Business Owners Consider Bankers a Trusted Advisor?

Unfortunately, bankers are not rated as highly by business owners as other advisors. Take a look at the Q3, 2022 Barlow Research study. They surveyed business owners of companies with $1 to $25 million in revenues and found that businesses are more likely to turn to their accountant, other business owners or their lawyer for advice than a banker.

Benefits of Being a Trusted Advisor

In my previous experience as a sales manager, you can acquire deeper, longer-tenured commercial relationships with solutions extending to Wealth Management. SMB owners and C-suite execs may refer other business colleagues to you for their commercial banking needs. They can also refer their employees with consumer banking needs. Over time, as the business changes, the banker as trusted advisor can help the client take advantage of product or market opportunities, mergers or acquisitions or technology deployments leading to additional revenue for the bank. Trusted advisors help clients make informed financial decisions and better understand and manage risk, potentially leading to reduced credit losses for the bank.

Best Practices to Become a Trusted Advisor

• First, be authentic. Create your personal brand and demonstrate the value of working with you vs. other bankers. A banker as a trusted advisor demonstrates five personal attributes/skills: trustworthiness, expertise, excellent communication, strong problem-solving skills and responsiveness.
• Next, understand how your bank's solutions solve various business problems and why your solutions are better/different from your competitors. Leverage internal partners to build your knowledge. Understand the customer's journey in the buying and fulfillment process, so that you can be their guide. Educate yourself on specific industry challenges and opportunities and their industry’s forecast. Also, you can't advise an SMB owner or decision maker without understanding their clients’ needs, their value proposition, what is happening in their industry and how the economy impacts their business.
• Incorporate easy-to-use, time-saving research tools so that you can spend more time talking to customers. As an example, RelPro integrates 20+ best-in-class sources of data on over 7 million companies and 150 million business decision-makers. Bankers can use RelPro to find new prospects (filter by industry, geography, revenue range, loan filing history, etc.), learn more about them (revenue/employee counts, access industry research & buyer intent signals, news content, financial decision makers’ contact data, etc.), and stay updated on the business through RelPro alerts when your prospects/clients are in the news.
• Solve SMB problems within the estimated time. You don’t have to solve everything personally but rely on a team of experts.
• Be available and responsive. Business owners frequently expect to receive a phone call within a couple of hours of their message. Commit to regular contact and always follow up.
• Finally, whether you are deemed a trusted advisor will be up to the business owner. Understand their business goals and ask yourself if you are contributing to their success. Get feedback from your manager who sees you in action and ask others that you trust.

Case Study – Manufacturing Industry

If you have more manufacturing firms located around you, realize that these firms typically have higher profits compared to other sectors. They have higher capital requirements and must plan for maintenance and capital expenditures as equipment approaches its useful life. They typically carry larger deposit balances and have greater credit needs. The sector is vital to the US economy even as the US economy is more service-oriented and manufacturers leverage offshore production to reduce labor costs. RelPro provides industry information through its data integrations from IBISWorld and Vertical IQ. The 2023 – 2028 IBISWorld outlook for manufacturing predicts it will recover post-pandemic led by widespread economic improvements and a decline in the US dollar. Profits are expected to improve to 8.4%. Manufacturers will continue to integrate technology to improve efficiency and supply chain resilience and meet expectations for sustainability and shifting consumer preferences.

Research your existing manufacturing clients. For example, take an animal food manufacturer and search for the company in RelPro, reviewing the SWOT analysis and the industry trends. See how their annual revenue is faring as pet ownership has increased, but input prices have been higher with inflation. Experiencing higher costs and squeezed margins, these businesses may not be able to pass on all the raw material and labor increases. Review the Call Prep questions to efficiently plan your client visit. Find specific company data and identify the decision-makers through RelPro. Look for UCC filings and real estate transactions and compare them to your banking relationship. Do you have a full relationship? Set up news alerts on the company. You can follow similar steps to create a prospect list of other manufacturers. If you use Salesforce, you can easily integrate your new lead list into it. Supplement your knowledge by talking to internal partners including underwriters to learn from their experience. By leveraging accurate company and executive intelligence as well as industry insights, a banker can efficiently build their knowledge of a business and industry to become a valued partner to SMB Business owners.

Now it's time to use LinkedIn to find mutual connections with company financial decision-makers. Ask shared connections for a warm introduction and provide them with guidance. If you use LinkedIn for these types of introductions, make sure your profile is compelling and includes testimonials.

Key Takeaways

• Strive to become a trusted advisor to SMB decision-makers, resulting in greater client loyalty, expansion of services and faster development of new relationships
• Demonstrate valuable personal attributes and skills - trustworthiness, expertise, excellent communication, strong problem-solving skills, and responsiveness - and increase your effectiveness
• Leverage comprehensive, time-saving tools to increase your productivity