How U.S. Bank turned its sales model on its head

When was the last time a representative from your company’s bank sent your CFO or head of payroll an email saying she’d been thinking about how to solve a problem your business was having and offered to stop by to go over it? Probably never.

The standard banking business model — in which consumers and companies conduct business in brick-and-mortar buildings — hasn’t changed much. Sure, over the decades, the marble columns and high ceilings of yesterday’s banks eventually gave way to the more approachable free toasters, pens, and penny arcades. But at its heart, banking is a service that most customers must seek. Only the most coveted of customers are courted.

“Banking was a reactive business,” says John Elmore, vice chairman of community banking and branch delivery at U.S. Bank. “Someone would walk through your door, or log in to your site, and you were there to try to take care of whatever their needs happened to be.”

U.S. Bank (USB) decided to flip the equation and began to knock on local businesses’ doors. Instead of branch managers waiting for customers to come in, they went out into the community to get to know people. It didn’t matter if those people did business at U.S. Bank or a competitor. The point wasn’t to get new checking account customers. It was to build relationships.

In 2008, U.S. Bank’s senior management took a hard look at where the banking industry was going and decided to shift its strategic direction to engage more of its branch staff in understanding the needs of small business owners. “The change was all about opportunity and engaging in the community,” says Elmore. “U.S. Bank had a strong reputation for the services it provided consumers and small businesses, but it was clear we could do more to grow that segment.”

But the transition didn’t happen overnight, says Elmore. First, each of U.S. Bank’s nearly 3,200 branches needed to be ready to handle business while the branch manager was freed up to spend more time outside the office, visiting existing customers, developing new business, and being involved in the community on a regular basis. A few branch managers couldn’t picture themselves developing a book of business and either moved into operational roles or left the bank altogether. Others came along over time after receiving coaching from district managers.

Today, U.S. Bank’s branch managers spend 40-50% of their time outside the branch. They now focus on developing long-term relationships with potential customers, not a quick sale.

“If you meet with somebody today, and you don’t know anything about their business, you might sell them a product because you’re a really good salesperson,” Elmore says. “But if it’s not the right product for them, they’re going to quickly realize it isn’t, and you’re going to have lost your credibility with them entirely.”

U.S. Bank takes a longer-term view. “We’re looking to establish the relationship, get to know you, get to understand what you’re trying to do, and then insert ways that we can assist you along the way and gain your trust over time,” says Elmore.

In To Sell is Human, author Dan Pink writes that slick sales techniques are no longer as effective as they once were. Instead of pushing products, Pink argues, businesses must help customers make sense of the blizzard of information they are bombarded with and develop solutions to their problems.

Asking bank branch managers to spend more time in the community was a relatively simple shift in behavior, but it has coincided with profound growth at U.S. Bank. The bank is now the fifth largest in the U.S., up from eighth in 2010, when it began to shift its focus.

Now, the bank’s customers are more likely to be candid about the challenges they face and to work collaboratively with their local branch manager on these issues, even if they are not the ultimate source for answers. When a customer in Jamestown, North Dakota, population 15,427, comes in with a complex treasury management problem, for example, the local U.S. Bank branch manager may not have a local expert on the topic, but the manager can connect that customer with someone else at the company who can help.

Pulling resources from disparate locations to deliver what a customer needs is a natural outgrowth of the bank’s shift, Elmore says. He predicts such practices will become more common in the next few years, even in the relatively conservative world of banking.

“We’ve come a long way in providing the entire bank’s resources to every customer interaction, but we still have a long way to go,” he says. “And that’s the exciting part.”

Stepping out of the brick-and-mortar comfort zone

U.S. Bank’s John Elmore outlines how his bank increased its market share by implementing a handful of simple practices:

1. Purposefully develop a list of local companies whose businesses you would like to understand better.
2. Set up a time to meet with one or two people from the company, asking questions about their business needs and current frustrations.
3. Offer to help – without promoting your company’s products.
4. Follow through: Research ways to overcome the challenges they face, leveraging expertise as necessary.
5. Share what you came up with, encouraging an ongoing dialogue.