I was recently at my son's soccer game when I struck up a fascinating conversation with another dad. I'd never met the guy, but we started chatting, and though I did not mention what I do for a living, he shared that he owns several hotels. I began inquiring about his career–asking him questions like, "How do you survive the downturns? I know you do well in the good times, but when it gets hairy, what do you do?"
His response really piqued my interest: "It depends on how much debt you have."
He continued: "When times are tight, it's common to start breaking loan agreement covenants, so you really need a good bank."
Now I was hooked! Again, the man had no idea what I do, and feeling a bit like James Bond, I continued to play the fool...
I asked him how he chose his bank, and he said had always banked with a regional bank here in the Carolinas because he felt like they understand his business the best–"They 'get it'," he said. He went on to explain that he looks for the banker who is most knowledgeable, but perhaps more important, he noted that he has to weed out the bankers who aren't knowledgeable.
I asked why that was important to him. "Because they can't sell the deal internally. If they aren't knowledgeable about both my industry and my business, they can't articulate my case to the people approving the loans, so they can't get a good deal for me."
Ca-ching. There's the rub!
But here's the kicker: I asked him how he could tell if a banker had knowledge about his industry; his response: "You can tell quickly by the questions they ask–and if I bring up Smith Travel Research and they don't know what that is, then I know instantly that they don't know anything about the lodging industry."
He went on to tell me that the banker he works with is a general commercial banker who works with all types of businesses, not just hotels. So it seems clear that this banker had taken it upon himself to get educated on his client's industry. The soccer dad also shared that his banker had recently moved from one bank to another, and this hotel owner had followed him with part of his business banking relationship. Now that's customer loyalty!
There were four key takeaways that I gained from this conversation on the sidelines of the soccer field:
- Business owners care deeply about whether or not their banker understands their business.
- Business owners often believe that they get better deals when their banker understands their business...and on this point, perception is reality.
- Bankers don't have to be industry experts, but if you are industry ignorant, you can lose some great deals.
- If you work to acquire expertise in a particular industry, business owners will follow you loyally from bank to bank.
Getting up to speed on a client's or prospect's industry doesn't have to take a lot of time. In five minutes, you can review the Vertical IQ Call Prep Sheet to get a good overview of the challenges and opportunities before your phone call or meeting. Or spend 20 minutes reading and internalizing the information found in the comprehensive Vertical IQ Industry Profile. It will be time well-spent in your customer's mind.
As the hotel owner/soccer dad told me, business owners look for the banker who is the most knowledgeable about their industry...and they will stick with that banker!
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(Soccer game photo credit: GaborFromHungary, MorgueFiles)
