Selling commercial services isn’t easy.
Business loans and deposits are more complex and nuanced than common consumer financial products like auto loans, savings accounts, and residential mortgages. Credit unions also have a lot of competition for commercial clients—from community banks, national banks, and online marketplace lenders.
But credit unions have a secret weapon that many of those competitors—especially non-bank lenders—don’t have: a network of branches with deep ties to the community.
Yet, many credit unions don’t take advantage of this stealth superpower. Often, the central office controls every aspect of the business services and commercial lending process, from fielding business member calls to conducting site visits. They underwrite, approve, and book the loans. They cross-sell deposits and related services.
Meanwhile, when a business member does step foot in a branch and asks a credit union employee a question about their commercial loan, they are often greeted with a frozen stare.
Why? Because branch staff don’t know how to “talk the talk” in commercial services.
Commercial services are a great way for credit unions to grow loan volume, increase membership, and reach deeper into their communities. Don’t discount the vital role your branches can play in this process.
Unleash Your Branches as Your Commercial Services Sales Team
For many of your members, their local branch IS your credit union.
Your members are used to turning to the branch staff for answers – these are the people they know well and interact with on a weekly basis. They generally don’t have the same close relationship with the folks back at the main office.
At some credit unions, branch managers may serve as the face of the franchise. They attend the Chamber of Commerce breakfasts, ribbon cuttings for new businesses, and the golf outings. They are out and about on “Main Street” in the communities you serve.
In addition, your most experienced salespeople are often out in the branches. Your branch managers, member service representatives, and tellers are skilled at assessing members’ diverse needs and matching them up with the right solutions.
Armed with these structural advantages and the right tools and training, your branches are primed to expand your commercial program and deepen your credit union’s relationship with businesses in the communities you serve.
How to Supercharge Your Branch for Commercial Sales
To set your branches up for success in selling commercial services, begin by coaching them on these 5 key process steps:
- Keep Your Eyes Peeled: First, your branch staff should constantly be on the lookout for new opportunities. Whether working the teller line or in an office, they should listen for clues that may tip off a hidden need. Did the member mention they are starting a new business? Buying a franchise? Applying for an SBA loan? Are they looking to expand their current business? Hiring additional employees? Planning to purchase a new facility? All of these are good conversation starters to help your team engage in a deeper discussion with the member.
- Take Good Notes: Encourage your branch staff to take copious notes when speaking with your business members. This isn’t rude—it’s an important technique to ensure they capture all the details. The commercial loan cycle has a longer timeline than those of most consumer or retail products. Whereas a car loan can be approved and funded in a single day, a typical commercial real estate loan may take months to be underwritten, approved, and closed. It’s very easy to forget the nitty gritty details of the borrower’s situation unless it is documented fully.
- Match Product to Need: The branch rep should ask a lot of questions during the initial interview, and resist offering solutions until they have a good understanding of the member’s unique needs. One of the big advantages of commercial lending is that regulations are much looser than for consumer lending, so lenders don’t have to provide compliance disclosures, like HMDA or TILA/RESPA, or commit to an APR at the time of application. Your team can take advantage of this flexibility to explore how they can best help the member while remaining in a strong competitive position.
- Gather the Loan Package: If a commercial loan opportunity is uncovered in that initial meeting, the branch rep should provide the member with the appropriate application forms and checklists. As the borrower’s primary point of contact, the branch representative should also offer their contact information before the member leaves the branch.
Once the branch rep has gathered the loan application, their role doesn’t end there. They should follow the process through to completion, acting as the liaison between the member and the commercial services department, and ensuring the process stays on track within the promised timeframes. They should be available to ensure all of the questions the business has get answered and a timely decision is communicated. Encourage your branch staff to attend the loan closing, to help celebrate the moment and cement the relationship!
- Keep the Relationship Alive: Post-closing, the most successful branch salespeople maintain regular contact with their business members by phone or visits to their place of business. When the member comes in the branch, staff should greet them with a warm smile, and ask how the business is doing and whether they have any emerging needs or challenges. They should also recognize opportunities to cross-sell other products and services, such as analyzed checking accounts, remote deposit capture, or a business credit card for purchasing supplies.
Above all, branch reps should always provide outstanding service, and position themselves as the business member’s “personal banker.”
Commercial products and services are undoubtably more complex and variable than retail banking. But the commercial side is not nearly as scary as many branch staff believe. Through investment in training, education and the right incentives, credit unions that have unleashed the power of their branch network have realized profound success in this vital and growing area of opportunity.
About the Author
Mike has spent his entire career gaining expertise in banking, commercial lending and sales. He has underwritten all types of business loans. He also has extensive experience with SBA lending and served as a Director of Consumer and Home Equity Lending. He is a former instructor for the American Institute of Banking and has taught extensively throughout his banking and credit union career. Mike consults with credit unions in the eastern U.S. on all aspects of business services planning, program development, account pricing, and education.