Companies big and small spend millions of dollars each year to buy
advertising on radio, on television and in print. The rates for a 30- or 60-second spot during the Super Bowl have
become legendary.
Yet the most effective and cost-efficient way to advertise is a method for
which there is no price tag. A satisfied
customer can do more to help a company gain additional customers, while a
dissatisfied one can drive away many
unseen potential clients.
“If you’re my banker and you’ve taken
care of me in the past, I’m going to trust
you,” says Dan Summerford, Senior Vice
President and Business Banking Manager at Wells Fargo Bank. “If I know
someone who is looking for commercial
real estate, I will think of my banker and
refer the deal to him or her.”
Smart Business talked to Summerford
about how important it is for a commercial banker to build strong relationships
and how those relationships can help
down the road.
Who makes the best referral sources from a
relationship banker’s side of the desk?
Lawyers, certified public accountants,
insurance agents, and business owners
and managers to name a few. Ultimately,
a banker should consider his or her existing customers’ portfolio as their No. 1
referral source.
Why are customers such good referrals?
If you’re doing your job as a relationship
manager, you’re proving to that customer
that you’re there to provide him or her
with guidance and that you have the
financial knowledge that the customer is
looking for. With a lot of customers, you
develop a certain friendship, as relationships are very important in the banking
industry.
It’s great to work for a company that
offers all of the products and services so
that as a commercial banker you can take
care of the other needs. At the end of the
day, the client isn’t concerned about whose name is on the letterhead but
whether or not someone has taken care
of his or her needs. For example, I’ve
been in comparative situations where just
the way we have come across on the
phone and our knowledge won us that
client’s business, even if someone else
was offering it at a lower price.
How much business can a good referral
secure?
I can only talk from the business banking side, but it can be huge. A potential
client is not going to move his or her
account from another bank to Wells Fargo
based on an initial cold call. It is up to the
banker to turn that initial call into a client
by building a relationship first. That’s why
CPAs are potentially such good referrals.
They are already in a position of trust with
business owners. So if I already have a
strong relationship with the business
owner’s CPA and the business needs to
finance some sort of project, there’s a
good chance the business owner’s CPA
will refer his or her business to me.
How does that work?
Say a CPA is referring a deal to me and
it’s with one of his current clients. And
say that person has been his client for 10
or 20 years. Based on his or her CPA’s
relationship with me, that client will
now give me a shot to help. However, I
have to be mindful of the CPA and his
client’s relationship; I can’t just jump in
and take over the process. I have to let
that client drive the process and treat it
almost like a handoff in football. It’s not
something as simple as, ‘Here’s the person’s name and phone number, give him
a call.’
Say the CPA, the prospect and myself
are on the golf course. That prospect is
going to see me interact with the CPA
that he or she trusts and eventually will
make the connection that the CPA trusts
me. Ideally, from that situation the
prospect trusts the CPA, and we have an
immediate link to that resource, which
is vital.
How damaging can a negative referral be?
If you’re doing your job as a business
banker and you’re being a customer-centric relationship manager and something
goes wrong, it can be very damaging
when word starts to get around about
what happened. It can be damaging to
both you personally and your company
as a whole.
What’s the best way to build a referral list?
If you’re lucky enough to inherit a portfolio from a previous banker, you
already have a client list to work with.
However, if you are starting with nothing, spend time at your town’s chamber
of commerce and at council meetings.
Get out in your neighborhood and meet
people. I’ve picked up referrals at neighborhood softball games.
DAN SUMMERFORD is Senior Vice President and Business Banking Manager at Wells Fargo Bank. Reach him at (281) 870-0951 or
[email protected].