How Account Planning Can Increase Sales

How Account Planning Can Increase Sales
By Charles Wendel
American Banker, March 15, 2005

Customer relationship management offers tremendous value to banking companies. Unfortunately, many CRM projects become entangled with systems and technology "solutions" instead of helping the bank differentiate and distinguish itself.

CRM may leverage internal technology tools, but it cannot rely on them. What is needed is consistent sales discipline.

A process called account planning is a key element in successful CRM initiatives. This can provide consistency across the bank, depth of information, and a priority-based action plan. An account planning process can also be a revelation to bankers who view their accounts through the blinders of a handful of products, ignoring the many others offered by their bank.

Many banks say they do account planning as part of maintaining their relationships with customers, whether individuals or businesses. However, our experience is that bankers develop account plans sporadically at best and do not follow an explicit process.

To increase wallet share and account penetration, a rigorous methodology is needed.

On the commercial side, account planning provides a uniform process for evaluating potential sales of traditional (credit and cash management) as well as nontraditional products (investments, capital markets, and personal banking/ wealth management, among others). Most banks do not lack products or "solutions" - they lack a methodology for recognizing opportunities and fielding an effective sales effort.

How to Start. Clients tell us that "the technology" was not in place to allow them to perform a meaningful account planning exercise. That is usually untrue. More often, banks have the technology but do not have an internal account planning culture.

Account planning can begin with a relatively small number of accounts within the portfolio. Start by focusing on the top 10 to 15 accounts within each relationship manager's portfolio. These should be accounts that are already key and/or represent growth opportunities.

The banker should assess each account from the following perspectives:

What financial services products does the company buy from others?

What financial services products does the principal buy from others?

What additional products should the bank suggest?

Today, most bankers lack the training or mindset to uncover the myriad sales opportunities that exist. One case we often cite involves a senior commercial banker at a very well performing bank who stated that he was already selling his customers everything they needed. His problem in evaluating growth opportunities was that he could not get his head out of the box he knew - namely, credit.

Account planning simply involves conducting in-depth reviews (usually annually) of current activity and future sales prospects for each banker's major customers and/or prospects. Bankers assess the current relationship, evaluate other solutions/products that they can offer, and plan how and when to proactively market the new business idea during the next few months.

Building a Process. Our experience is that many banks will perform account planning once and then fail to follow through. The banks that make account planning work pursue the process with consistency and rigor. Managers at banks with successful account planning processes take the following steps:

Involve other product groups in the planning process. The banker who said he had sold all he could sell to his customers is not a bad banker. He is a typical relationship manager who needs help taking a fresh look at his portfolio and considering new ideas, such as wealth management and leasing. To make this work, product specialists from these and other areas need to develop relationships with commercial banking managers and must be able to work with them to mine for opportunities.

Introduce a real sales manager. Relationship managers have supervisors, but they do not usually have sales managers who are ensuring that they are aggressively and thoroughly courting new business. Banks must turn up the heat on their sales efforts, and one of the best ways to do so is by providing strong sales leadership.

Review the plan during the year. We have heard of cases in which a banker writes up a plan and, in effect, puts it into a drawer. Account planning is not an academic exercise; it provides a tactical plan for dramatically higher revenue growth. Banks that make account planning work conduct formal midyear or quarterly reviews to gauge progress and determine required actions for improving performance.

Incorporate results into the incentive payment plan. If a banker knows that he/she will be paid for account planning-based performance, they will do all they can to make the process work.

Establish it as part of the yearly sales process. All big companies, banks included, are notorious for introducing a "flavor of the month" program that soon disappears. Account planning has often fallen into that category. Many banks have tried account planning; few have kept at it.

Final Analysis. If account planning is such a good idea, why isn't everyone doing it? We think the reasons have nothing to do with the concepts behind account planning or its effectiveness as a CRM methodology and everything to do with banker and manager preferences.

For instance, commercial bankers do not like to be told what to do. They also tend to avoid investing time in areas in which they are unfamiliar. Compensation structures have not encouraged bankers to spend time on account planning because of limited rewards to them for selling outside their "home" turf.

Nontraditional sales areas have lacked the political influence to insist on their products' being sold, and sales management is neither rigorous nor consistent at most banks. In addition, senior line management frequently lacks the will to make account planning work.

At the banks making this process work, relationship managers are being given clearer instructions on their sales roles, compensation is changing, the internal prestige of various specialization areas has been enhanced, tighter sales management practices are being introduced, and senior management is fully on board and leading the charge.