Preparing to Win In Advance of a Recession

While our economy is still strong, most media outlets today are talking about a looming recession.  Maybe it will happen in 2020, 2021, or 2022––no one really knows for sure. However, whenever it happens, that is not the time for your relationship managers, BDOs, and lenders to employ new strategies and tactics in an effort to adapt to a recession.  That’s too late!

Understanding the Problem

Our industry has enjoyed two-plus decades of “ideal” conditions that have made it relatively easy to grow our banks and make shareholders happy.  Our current economic expansion is long by historical standards.  The economy has been expanding for the better part of twenty-five years.  The stock market has hit new highs during this time creating tremendous wealth for many.  And with historically low-interest rates, much of that wealth has and is being deployed into real estate.  Real estate lending has been our industry’s “low-hanging fruit” and the easiest way to put earning assets on the books.

Yet, repeatedly, I hear senior banking executives complain that their bankers have gotten lazy. The common complaint is that they are “waiting for the phone to ring” with new participation opportunities and referrals from real estate brokers and CPAs.  When the recession hits, these long-standing strategies that every banker utilizes won’t be sufficient to hit your growth goals.

Strategies that Could Save the Day

The following are a couple recommendations to begin the process of preparing your commercial bankers for the looming recession:

1. Stop Wasting Time: Nationally, sales professionals spend just 37% of their time on “money making activities.”  Given the regulatory burden, my guess is most commercial bankers spend less than the national average engaged in money-making activities. In light of this, you don’t have the luxury of working on small or poor quality deals.  Define the characteristics of A and B quality prospect and focus as much of your marketing time getting in front of those prospects.
2. Touch More Prospects: In a rising rate environment as we’re in, there will be fewer quality deals in the market. To counter that, your commercial lenders must be talking to more prospects, attending more trade association functions, and giving and asking for more warm introductions.

To summarize, the best time to undertake changes that will strengthen your bank’s ability to grow revenue and profits during a recession is before it hits. Research repeatedly confirms that companies that prepare for a recession pull ahead during and after the recession.

2019 is the year to help your commercial banking teams begin to employ new, more productive business development strategies and tactics.  The recession is coming.  Don’t wait till we’re in the recession to figure out that the sales tactics being used by your sales teams aren’t working nearly as well as they used to.

Now is the time to get into the game.

To your Success!

Call me at (760) 720-9270 to discuss how we can bring change to your bank.