Dave Eddleman, principal and Banking practice lead at Alexander Group, discusses recent banking survey findings and Alexander Group’s solutions to assist with go-to-market challenges.
Alexander Group recently surveyed 50 C-Suite and Sales & Marketing executives in the commercial and business banking industries to gain their perspectives on the top go-to-market initiatives for the second half of 2022. Deployment of relationship managers in the field, sales process, support team strategies, revenue operations and seller performance expectations, were identified as the main challenges. Read more in this article.
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Dave Eddleman: Hey, everybody. Dave Eddleman from the Alexander Group. Thank you for joining. I’d like to share some highlights with you today from our Go-to-Market Banking Survey. We focused on commercial and business banking, and we have about 50 respondents in the survey. We’re looking at go-to-market issues, which includes how sellers, or in many cases we call them relationship managers, are deployed in the field. And also all of the supporting teams surrounding the frontline sellers-how they’re deployed, how they spend their time, their organization-some of the prevalent strategies that we were seeing out there. Top initiatives for 2022. That would include things within the sales operations organization, or sometimes we call that revenue operations now. Cost of sales and marketing as well as some performance expectations for sellers. So issues like this, when we talk about go to market, that’s what we’re really broaching in the survey. We’ve got a great cross-section of business banks and commercial banks, about a 60/40 split between business and commercial. The respondents on the survey, about 36%, or about a third in general management C-suite space, as well as sales and marketing leaders, as well as marketing specialists.
What came to the top in our survey findings were things that despite the strong year that we had in ’21 nice rebound from the pandemic, banks did pretty well. There’s an even increased expectation of double-digit growth in 2022 for the banks, and I think this puts pressure on the go-to-market organization and the RMs and all the sellers. The third bullet here, what kind of bubbled to the top from our survey, were issues around sales enablement. That means having great process, great CRM discipline, great understanding of value messaging and how that value messaging aligns back to the stages of the sales process. Making banks just a little more commercially centric, a little more nimble. They’ve got lots of great market share, but they’ve also got lots of competition that are after them. So I think there’s a bolstering of just general enablement and then that sort of comes underneath this go-to-market and sales operations. There’s also an interest in specialists. There always kind of has been, but I think that is a part of the retention strategy, cross-selling and upselling and having a separate group that they can call on either as a permanent team or a part-time team. That’s a big emphasis from the survey results as well. Also inside sales, we had a lot of great learnings from the pandemic, and I think a lot of organizations realize that there is a lot of selling to be had from the inside. Now that’s probably not applicable to the more up segment, industry vertical segmented commercial banking. But again, we’re a lot of confidence built that some inside sellers could do a pretty good job in business banking segments.
In terms of performance expectations, we got a slide on this in a second, but around $5 to $8 million in revenue per seller. It’s probably the majority of it. If you’re having $1 million per seller or you have a $20 million, you’re probably a couple of standard deviations off the mean there. But that’s basically what we’re seeing. And again, we’re going to be sharing a lot more details with you later this year via our virtual roundtables and our blogs. And also later this year, we’re going to have a talk at the American Bankers Association.
Banks in terms of sales expense, about 10%. I’ll show you a slide in just a second. Roughly 10% of revenue to sales. That’s what we see. And again, we’ve got more data on that, on what the distribution looks like. We still see that most banks are looking at maximizing customer retention, reducing churn. Second to that is new customer acquisition. So this makes a lot of sense again because of the market share that they have, there are a lot of customers, and we want to make sure that they retain that upsell, cross-sell, always big motions, always big initiatives. Again, this drives retention. And then the new product and service offerings, that’s going to just drive new, new customer acquisition as well as retention.
Top challenges that the respondents gave back to us, sales enablement – tools and technology, value messaging. Again, just getting a little more fine-tuned on the commercial model. Number three here is actually pretty interesting as well. What we’ve seen from a lot of our work and projects with banks is banks are really good at looking at sort of lagging indicators of cost of sales or revenue per rep, but not always as good as looking at market share and share of wallet and understanding territories and in prioritization of accounts. And that even goes up into the commercial segments when they’re industry vertically focused. Virtual selling. That’s a big issue as well. Again, we learned a lot from the pandemic. Do we need all of those meetings in person? Can we do one virtual and two in person? How do we sort of redeploy, given this new found skill set in front of the camera? Teaming, again, this gets back to cross-selling and upselling. A lot of banks have this done really well and a lot of them are still struggling with rules of engagement, when to bring the team in, who’s running the plays, how much crediting, how you divide up the accounts and so forth. So there’s a lot of swirling sometimes in that last part. But these are the top challenges that we saw from the survey.
Again, this is expenses as a portion of revenue. 80% are between 5 and 15. And again, these are good guardrails. That doesn’t mean if you’re in the other 20% on either side that that’s necessarily wrong. It’s going to depend a lot on sort of the maturation of the bank in the marketplace. Just want to share with you some of the things that we do when we engage with banks. Some of the same issues. But again, the reason we do these surveys is to understand what the trends are in the marketplace. But these are the kind of projects that we’re involved with – segmentation and understanding that sort of navigation on an incumbent level, as I mentioned earlier. Or design, digital strategy, productivity and deployment gets back to that enablement piece. And last but not least is incentive compensation, sales compensation sometimes it’s called depending on the bank. With a very careful balance and regulatory lens, we understand this is a different marketplace, but there’s always pretty good focus on how do we sort of follow up the money to motivate against these go-to-market roles. So a lot of work we’ve done in that area. Thank you so much for joining. More details to come later this year, and I look forward to seeing you next time.