We all know it’s a problem and everyone has their own opinions on why the referral pipeline has yet to be turned on or is just leaking. So we’re here to help uncover what’s really going on at the front lines of your branches, and why referrals are lacking across the industry.
Back in April 2015, we conducted a survey that included over 160 sales reps and program managers from banks throughout the country. We pulled together some common factors that have been thrown around in the industry as barriers to branch referrals and asked them to rate each one on how big of a barrier they were. Here is what we found (in order from least to greatest):
Doesn’t have good rapport with sales person. Only 4.3% of the respondents said that this was either a “large” or “very large” barrier while 56% said it was a “very low” barrier.
Feels the sales person could hurt the relationship with their customer. Only 12.3% of the respondents said that this was either a “large” or “very large” barrier while 51% said it was a “very low” barrier.
Feels the customer already has the products and services from someone else. 21% of the respondents said that this was either a “large” or “very large” barrier while 18% said it was a “very low” barrier.
Worried that a customer may ask them a question they can’t answer. 56% of respondents said this was either a “large” or “very large” barrier while only 6% said it was a “very low” barrier.
Doesn’t feel comfortable probing into customer’s personal issues. 56% of respondents said this was either a “large” or “very large” barrier while only 7% said it was a “very low” barrier.
These results tell us a few things. First, it’s clear that the chemistry between the sales rep and the employee is typically not the barrier. These results also show that most employees are not assuming their customers are already getting help from other financial institutions for similar products and services that their bank now offers. The most important finding tells us that employees are failing to drive referrals for both lack of confidence and fear of being seen as someone who probes into one’s personal life.
So what can you do to remove these barriers? For years, banks have hired trainers and motivational speakers to visit their employees. To varying degrees, these techniques would work, but only for a short while. Employee turnover, a reluctance to change behavior and being asked to hit new goals on a regular basis all contribute to the employee forgetting the importance of these focused training sessions. In the end, this approach is not only short lived but also costly.
How to Generate More Referrals
The key is developing a simple and repeatable process, a process that puts both the customer and the employee in a comfortable position to start a dialog. One such process that’s gaining momentum is called education-based marketing. This approach is focused on developing helpful, easy-to-read educational materials on hundreds of financial topics and then merchandising them in a way that triggers customers to raise their hand. When “the ask” comes from the customer, it takes some of the pressure off your front line to probe.
By putting this “education first” approach in place, you put not only your customers but also your employees in a comfortable position to begin a dialog. And unlike one-time campaigns that give you a spike in activity, this approach can keep the referral faucet flowing.