How To Increase Your Bank’s Commercial “Pull Through” Rate

Bank Sales

Chances are your bank has a “pipeline report.” This is a report that details all the qualified prospects, their potential transactions, their value and where they are in the sales process. If your bank is on top of its sales game, it likely has this report by customer relationship so that loans, deposits and services are all on one report and can be managed. If your bank is more traditional, then it likely has multiple reports for loans, deposits and maybe, fees. If your bank doesn’t believe in relationship banking, then maybe you just have this report for loans. Hopefully, your bank has some process for driving sales.


It turns out that a high number banks that have consistent returns on equity in excess of 15% and have growth in excess of 10% have a well managed pipeline and have “pull-through” or conversion rates in the low 40% range. Here at CenterState Bank, we are in the 30’s and looking to improve. To that end, we have asked around and have compiled a list of four best practices that we have learned from other banks and other top performing sales organizations.


It Starts With Definition, Measurement And A Plan


Bank sales management starts by making sure every business development officer understands the process and everyone is clear on definitions so there is a common language. The number one issue that we have observed is officers treat what goes on the pipeline report in different ways, thus it is hard to compare and manage various officers and products within the bank.


Every bank has a different definition of the stages of relationship and everyone has different criteria for how a potential customer gets into the sales funnel. The important part is to define your criteria so the ground rules are clear. For example, what separates a ”prospect” from a “suspect”? At a minimum, you should define (and track) the number of qualified opportunities, opportunities lost, conversion rate, sales cycle length and statistical summary information by business development officer, branch/region, and product. By tracking this information, problems in the sales process can be highlighted and solved.


It’s The Process Not The Outcome


To start, don’t get too hung up on your conversion rate. Sure, it is a good metric and should be tracked but like “par” in golf; it is best measured against yourself. Typically, the sales cycle for a commercial loan is approximately 110 days, while deposits are closer to 53 days. However, this only tells part of the story because the standard deviation or variability is huge. If you were to compare this to your bank, what would you deduce? Chances are little, as there is a whole array of variables. Understanding your geography, demographics, competitive landscape, product mix and product administrative process is a start. A bank that targets medical professionals has a much longer sales cycle than a bank that target hotel owners. Further, while relationship banking is more profitable, it also takes more time. Make sure you have the process right, before you place too much emphasis on the numbers, particularly if you are trying to benchmark yourself against other banks.


Start With The Customer, Then Improve Your Process


Banks that have strong sales management usually have taken a methodical approach and have worked on various parts of their pipeline to reduce the sales time and make their business development officers more efficient. They have also taken the time to understand the sales process from the customer’s perspective. If you don’t understand your customer and build your process with the customer in mind, little else will matter.


Only after you have a clear understanding of your customer - their needs, wants and desires - can you work on your own process. Once you have mapped the customer’s journey, you will find a sales pipeline is invaluable to help quantify which business development officers and regions have the best practices and which areas of the pipeline slow you down.


By and large, the two areas that slow a bank down are inadequate branding/marketing materials and a cumbersome credit/onboarding process. By increasing the brand of the bank, you can shorten the sales process. In similar vein, make sure your business development officers have the tools they need that includes presentation templates, electronic marketing materials, lead database and a customer relationship management system.


To the extent you can streamline the product, the sales process will follow. Our SmartBiz SBA product is an example as credit is narrowed to only the information that makes a difference in the credit decision. The process is streamlined, based on risk, leverages electronic databases and is automatically credit scored. Through this process, loans under $350k in size get approved in seven minutes and closed in as fast as seven days. While you may not be able to gain that type of efficiency, there are certainly roadblocks or speed bumps that slow the product cycle down. 


Bank Sales Process


Improve The Front End


Finally, a secret that experienced banks know is that while the heart of the bank sales process really hasn’t changed in over a hundred years, the front end has dramatically been altered. Understanding what customers you want before you start prospecting is the fastest way to increase conversion rates. A profitable customer at the right time with the right product suite will make the rest of the process relatively easy and will give banks their greatest gains. In 2015, there are now the widest array of tools we have ever had to faster target and qualify customers. From online databases, to social media (LinkedIn alone has dramatically helped banks), to CRM systems with predictive analytics, banks can now earn a 10x return on their investment by improving how potential customers are chosen and qualified.


Be Careful of the Sales “Funnel” Concept


The sales funnel is a concept that has been around for at least 60 years in banking. It is a tool to help visualize the sales process which is immensely beneficial. However, banks that truly understand the sales process know that the sales funnel is only an approximation of the process and not a true depiction of the actual sales movement. Bank customers don’t always follow a linear path and can move between being a customer that is ready to close back to a customer having doubts and needing to be resold to. Making allowances for backward movement is important as is the ability for a potential customer to skip a step.


In similar vein, the shape of the sales journey may not be a true funnel at all as parts can be larger than the previous step. After research, your client action team may find out that the customer has more business than first forecasted. Be sure not to let your visual approximation of the process serve as a limitation of the sales mentality. 


Bank Sales



Bank customers have a variety of options when it comes to bank products and it is relevance, not competitiveness that makes the largest difference between which banks win the business. The banks with a methodical sales process tend to be those banks that have a thought out value proposition, both of which aid tremendously in finding and closing profitable customers. If your bank is looking to become more efficient, consider defining your customer and then defining your process. If you do, pipeline conversion improvement will naturally happen.