A team-based approach with treasury management officers and relationship managers can help optimize inefficiencies
Treasury management (TM) sales historically have historically struggled, lack planning, and been viewed as a follower product set in commercial banking. Most relationship managers (RMs) lead sales activity with loans and only cross-sell TM solutions upon loan sale completion. As a result, banks struggle with proactively growing and accelerating fee income from TM solutions.
Upon closer inspection, the issues align with themes from two categories: organizational design and sales methodology. As we’ve moved through the economic conditions of 2021 and the continued compression of bank margins, a reality is that banks must deepen relationships with their current clients and increase share of wallet within their existing portfolio.
We see a sizable opportunity to expand existing relationships through fee-based products and services like treasury management, but that can only happen when TM sales are optimized within broader commercial sales methodologies.
Commercial banking TM growth is often stinted by myriad organizational issues spanning from ineffective go-to-market strategies, overlapping and redundant internal roles and responsibilities, nonexistent key performance indicators, and misaligned and poorly designed incentive plans. Specifically, these issues resonate most commonly in the market and prevent banks from growing TM portfolios:
To begin resolving the organizational design issue, banks must first strive to break down silos in which the TMO and RM roles operate.
Redesigning and clearly articulating roles and responsibilities as well as rules of engagement and goals are critical. To drive collaboration and improve TM sales success, banks should create sales playbooks with more operational overlap between RMs and TMOs. The two roles could then work in unison and overcome ineffective organizational design features.
Trust, cooperation, and collaboration will formulate more clearly when organizations structure cohesive RM and TMO roles and responsibilities properly—and are supported by comprehensive and unified KPIs aligned to incentive plans that drive the right behaviors.
Once the organization aligns RMs and TMOs across culture and goals, teams should then focus on sales effectiveness within treasury management. To begin the sales effectiveness journey, RMs and TMOs must have alignment around the go-to-market strategy. With this common vision, teams may focus on developing a consistent, enterprise-wide TM sales methodology to drive portfolio growth. There are three key pillars critical to success within such a methodology:
Client segmentation has evolved to become more data-driven and holistic.
Account planning is a cohesive process that drives sales opportunity advancement and involves TMOs, RMs, and team leaders.
A successful TM sales methodology requires focused sales leadership, transparency, and accountability to instill commitment and deliver consistent results.
When organizations implement the key pillars of sales effectiveness, leverage industry leading best practices, and strive to improve organizational design, success is quickly realized on multiple levels.
For example, these organizations enjoy more effective partnerships between RMs and TMOs, which in turn enhances customer experience and drives significant results through efficiency, revenue, and profitability.
More specifically, improved sales effectiveness results include 20-25% gross sales revenue lift of mid-tier TMOs, 3.2 to 5.0 share of wallet product growth per client and 15-20% cash management annual revenue lift when industry best sales effectiveness practices are deployed among RMs and TMOs.
If you answered “no” to any of these questions, there’s room for sales effectiveness optimization in your institution. Through a holistic, standardized approach, leading financial institutions can design and build TM operating models that seamlessly integrate within commercial banking and optimize sales effectiveness.
When executed well, organizations experience enhanced collaboration, empowerment of all frontline employees, and alignment of effort to reward—ultimately maximizing successes within the TM organization.
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