How To Conduct The Initial Commercial Customer Interview

Better Relationship Management

On the path to becoming a “trusted financial advisor,” many bankers don’t know where to start or even what being a trusted financial advisor means. At a minimum, it means knowing your banking products and their application. However, that’s table stakes. To deliver distinguishable value to the client, bankers need to take more of a leadership role on items such as business growth, M&A, crisis management, and general operations. To be fair, it’s rare that we train our bankers on how to advise the seasoned small and mid-sized business owner.  In this article, we present our framework and highlight some key skills to help bankers get in that first position when the customer needs advice.


The Data Collection Process


Banks should design their own checklist or list of questions that are customized for their client base, their products, and their CRM system. We assume here that we will one day see their financials and get to a detailed question, but the objective during the discovery process is to understand the general working of the client or prospect.


We like the following ten categories of questions as diagrammed below. 


Customer Interview Model Diagram

Business Model: Step one is to find out how the customer makes money. Do they have a subscription service, sell product on a one-off basis, sell product under contract, etc.?


Banking: Once you get them talking about their business model, we prioritize understanding their banking relationships in order to serve as a backdrop to better understand all the other findings. Knowing how many banks the customer has, how they use those banks, what products/services they use and what they like/don’t like about those banks helps us to create a prioritized way for us to help. One key point here is that it is important to complete the bulk of the discovery process before positioning a product. Finding out that the client needs treasury management services and then launching into your treasury management pitch has proven premature and not as effective in figuring out the client’s complete picture. Once known, the relationship manager can then prioritize the bank’s products to serve the client best.


Organization: Knowing who the players are and how decisions are made is critical and probably the most overlooked aspect of this framework. We always like to ask for an organization chart as a canary-in-the-coal-mine test question. If they have one, it not only aids in our understanding but also sends a message that they are likely organized to the point of being a lower than average credit risk.  Further, questions around the structure of the family for family-run business or the board, and its governance quality are helpful in understanding the overall dynamics.


Process: These questions support the understanding of the business model. Knowing how the client creates its products/services and how it sources plus manages its inputs is helpful. Here we are looking to understand their interest rate sensitivity, supply/demand characteristics of their products and overall production strategy. We are looking if they need international support and what type of loan structure would best fit their sensitivity to the economy and interest rates. We are also looking to understand how they get clients (sales and marketing) and their pricing strategy.


Performance Measurement: These questions go to the heart of understanding what the customer considers the definition of “success” in quantitative form. It is knowing what numbers the customer pays attention to will not only help the banker monitor the business but help the banker prioritize resources to have the largest impact. Some customers are going after revenue, some profit, some growth, and others market share. No matter what their focus, knowing a prioritized list of their most important metrics will help the banker better understand the business going forward.


Risk: If you are looking to set your bank apart, having a robust conversation about risk will do this. Not only is it critical for the customer to educate the banker on what the customer perceives as their greatest risks, but this conversation presents a way to add major value. Bankers are fantastic at understanding and educating about risk and most businesses underappreciate the risk management process. This gives banks an excellent way to make the client stronger while reducing the bank’s risk in the process. Time spent here can pay off a huge reward. 


People: Since people are the lifeblood of any business, knowing how the company attracts and retain human capital helps round out the picture. This is also an area where a bank can add value by helping introduce perspective employees to help with any shortcomings in the company.


Tech and Data: Technology and data merit an in-depth discussion to not only help understand the business but another area where bankers can add value. Bankers that specialize in an industry are in a position to know what is and what is not working at industry leaders and then help push the client to adopt new technology and data management in order to help scale the customer’s business. Many small businesses don’t have the resources or the education to leverage their existing data so a banker can help with ideas and make connections for consultants that can help.


Regulation: Understanding the regulatory framework of any business is another area that banks know all-too-well and can play a role in supporting. This is usually the last piece of the puzzle to understanding the clients business, and it is helpful to monitor news and regulatory happenings to better understand the inherent credit/legal/operational risk of a particular client.


Putting This Into Action


This general checklist is just part of the discovery phase of prospect or customer management. These questions are not meant to be answered all at once, but over the course of the first couple of meetings to help the banker assimilate enough information to put together a “client action plan.” The data collected from these interviews should then be discussed with the client action team and a prioritized set of packaged products that should next be presented as well as a set of non-sales-related action items such as making introductions, providing further information and helping garner other resources.


If your bank is dedicated to attracting and training true relationship managers that can add value to your commercial customer, fully understanding the client’s business is the first place to go.