Knowing a little bit about a lot of things increases your odds of winning at Trivia Night, but if you are a business banker, being a generalist does very little to win over new client relationships.
When business owners are looking for someone to partner with–be it a banker, accountant, or ad agency–they are always going to favor people who can exhibit a comprehensive understanding of their industry and business operation’s unique innerworkings. Someone who understands their pain points as well as their potential opportunities. This is why it is increasingly important for bankers to choose a handful of specific industries to study and gain thorough knowledge in order to offer tailored advice and solutions.
“I’m doing fine calling on all kinds of different industries,” you may be thinking. But are you? What will happen when another banker comes along and offers your client a lower rate? What are you bringing to the relationship that would compel a business owner to turn down that deal?
Finding a banker who has expertise in their industry vertical, who can share relevant insights, who understands the things that are keeping them up at night, is worth more than a lower rate to many business owners.
Here are five reasons why every business banker should become an expert in two to three industries:
- Having expertise enables (and encourages) clients to recommend you.
Just as you know bankers at competing banks, business owners know the other people within their industry. For example, every lawyer in town knows other local lawyers, and while some perceive the competition as a threat, others have colleagues with whom they share ideas or even refer prospects if they don’t have the bandwidth to take on a new client. It’s this sort of collaboration that can be an invaluable source of word-of-mouth referrals for you within your target industry. Pretty soon, your reputation will precede you among other niche prospects.
- You’ll become an indispensable asset.
When you have the recipe to the secret sauce, you have a job for life. The same goes for having expertise about a client’s industry. The majority of bankers are generalists who don’t take the time to research and gain a comprehensive understanding of their clients’ industries. They can’t; there aren’t enough hours in the day to get a thorough understanding of the 50+ different industries that they are calling on. But when you have just a couple of industry specialties, you can invest the time to become a true expert–learning the in’s and out’s in order to have a complete understanding of the way the industry works, its challenges and opportunities, and the corresponding banking solutions that you can offer. This makes you a truly valuable resource to your client–one that they will not ditch just because someone else comes along with a lower rate.
- You will beat the competition in an overly saturated banking market.
In areas that have hundreds, even thousands, of bankers, the competition is tight to earn and retain business clients. If you want to do more than just survive…you want to thrive…in a market like that, you have to find a way to differentiate yourself from the barrage of bankers knocking on your prospects’ doors. Showing off your in-depth knowledge about a prospect’s industry is a sure-fire way to catch their attention initially, set yourself apart as the relationship develops, and then keep their business in the long-term as you continue to add value with your on-point industry insights.
- Three words: Live Oak Bank.
Live Oak Bank has taken industry expertise to the next level. If you aren’t familiar with Live Oak, they began as a bank focused exclusively on veterinary practices. As they added agriculture, healthcare, pharmacy, and other industries to their portfolio, they would hire an expert in that industry, putting them at the helm of a team that focused exclusively on that one industry. If you need proof that having expertise in a niche will pay off for you, Live Oak has become one of the nation’s most profitable banks since their inception.
- Having an industry niche doesn’t prevent you from calling on other industries too.
Yes, this is basically the “What do you have to lose?” argument, but the fact is, just because you have in-depth knowledge about a few specific industries doesn’t mean you can only call on those types of companies. Just as with your personal stock portfolio, diversity is a good thing in your book of business, protecting you from economic downturns that may hit certain industries harder than others.
Find your forte
Being a banker can be a tough gig with a lot of competition. Identifying your niche will increase your appeal to prospects within that industry and will incentivize clients to stay with you, even if your numbers aren’t the lowest. Vertical IQ offers you easy access to comprehensive information on over 300 industries. So, choose your target industries and study up; you’ll gain a substantial competitive edge when you show off your industry knowledge to prospects!