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Jim Rensel, President Sales Quality Research Group KEHRER - LIMRA Bank Platform Study Group

25 YEARS OF LICENSING BANKERS: WHAT WE HAVE LEARNED The Key Skills, Behaviors and Activities that Drive Success for Bank Platform Reps. Jim Rensel, President Sales Quality Research Group KEHRER - LIMRA Bank Platform Study Group Naples, Florida October 29, 2009. TODAY’S ROADMAP.

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Jim Rensel, President Sales Quality Research Group KEHRER - LIMRA Bank Platform Study Group

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  1. 25 YEARS OF LICENSING BANKERS:WHAT WE HAVE LEARNEDThe Key Skills, Behaviors and Activities that Drive Success for Bank Platform Reps Jim Rensel, President Sales Quality Research Group KEHRER - LIMRA Bank Platform Study Group Naples, Florida October 29, 2009

  2. TODAY’S ROADMAP • SALES QUALITY RESEARCH GROUP • MYSTERY SHOPPING STUDIES • MYSTERY SHOPPING KEY FINDINGS - LBEs vs FCs • ------------------------------------------------------------------ • BANK INVESTMENT REP "ARCHETYPES" • SEVEN KEY SKILLS OF HIGHLY SUCCESSFUL FCs and LBEs Bank Platform Study Group 10-29-09

  3. SALES QUALITY RESEARCH GROUP • Founded in 1993 by Jim Rensel, with assistance from Dr. Kenneth Kehrer, who remains a part-owner of the firm today. • Specializes in conducting research on point-of-sale best practices for banks, credit unions, insurance companies and brokerage firms dealing in the bank distribution channel. • Currently does business with over 60 financial institutions ranging from community banks and credit unions to several of the nation’s 50 largest banks. • Since 1994, Sales Quality Group has conducted over 100,000 in-person and telephone mystery shops of bank branches, investment reps and customers. Bank Platform Study Group 10-29-09

  4. SALES QUALITY RESEARCH GROUP In-person Mystery Shopping Studies • FAs and LBEs • Life Insurance Agents, Private Bank and Trust • Unlicensed Branch Employees (referral) • Retail Bank Branches (checking, savings, loans, other) Telephone Mystery Shopping Studies • FAs and LBEs • Branch Referral Studies Telephone and Direct Mail Customer Surveys Clients for Role-Play exercises / including video and evaluations Real-time online branch audit software for clients Bank Platform Study Group 10-29-09

  5. “TOP 5” REASONS YOU SHOULD SHOP YOUR LBE PROGRAM • Number 5: He said, “Annuities always pay better rates than CDs and they are completely safe, liquid and have a money-back guarantee.” • Number 4: She said that they offer government bonds, annuities and mutual funds and that they all pay more than CDs, then added, “All of the products we sell are safe, not like those you would buy from a brokerage house.” • Number 3: She said, “Annuities are 100% safe because they are guaranteed by the Legal Reserve System and the State Guaranty Association, which is really better than FDIC insurance.” Bank Platform Study Group 10-29-09

  6. “TOP 5” REASONS YOU SHOULD SHOP YOUR LBE PROGRAM • Number 2: He seemed rather confused and contradicted himself twice. Finally he excused himself and went into the manager’s office. He came back a few minutes later and said, “Well now, I’ve got the real skinny.” • And the Number 1 reason you should shop your LBEs: He tested for acceptance by asking me what I thought. I told him that it sounded great. There was an awkward silence for the longest time and finally he said, “Well, why don’t you take this brochure home, look it over and then call me if you are still interested.” Bank Platform Study Group 10-29-09

  7. MYSTERY SHOPPING STUDIESIDENTIFYING THE KEY SKILLS, BEHAVIORS AND ACTIVITIES THAT DRIVE SUCCESS Bank Platform Study Group 10-29-09

  8. DATA SOURCES AND ACKNOWLEDGEMENTS • 65 FC and LBE Studies - 2002 thru 2008 • 54 LBE Studies - 1996 thru 2008 - - - - - - - - - - - - - - - - - - - - - - - - - - - • The evaluation criteria and methodology used in our studies was developed with the assistance of Ken Kehrer and a dozen banks who served as part of our design group - - - - - - - - - - - - - - - - - - - - - - - - - - - • Jackson National helped fund early LBE Research and used findings to help create LBE training materials - - - - - - - - - - - - - - - - - - - - - - - - - - - • Includes mystery shop data from several programs here today: • Union Bank • Commerce Bank • First Brokerage America • First Merit • Capital One - Hibernia (before Katrina) Bank Platform Study Group 10-29-09

  9. MYSTERY SHOPPING METHODOLOGY • Sales Quality Group’s shoppers report on the specific behavior of an FC or LBE by indicating whether or not a particular: • Question was asked, • Statement was made, or • Behavior was observed, during the sales interview process. • The shoppers also capture valuable information on: • The length of interview, • The style and technique used by the FC or LBE, • The sequence of events, • What sales materials and/or notes were given out. Measures both systemic and individual results Bank Platform Study Group 10-29-09

  10. MYSTERY SHOP EVALUATION CRITERIA SECTION Compliance Sales/Service Point-of-Sale 04 02 Professionalism (Relating) 00 11 Needs Assessment (Discovery) 09 07 Sales Presentation (Advocating) 00 12 Risk Disclosure 09 00 Product Presentation - Mutual Funds 06 03 Product Presentation - Variable Annuity 06 03 Product Presentation - Fixed Annuity 0405 TOTAL 38 43 Bank Platform Study Group 10-29-09

  11. LBE vs FC COMPLIANCE SCORES65 STUDIES - 2002 THRU 2008 Bank Platform Study Group 10-29-09

  12. LBE vs FC SELLING SKILL SCORES65 STUDIES - 2002 THRU 2008 Bank Platform Study Group 10-29-09

  13. LBE vs FC SCORES BY PRODUCTION LEVEL65 STUDIES - 2002 THRU 2008 Bank Platform Study Group 10-29-09

  14. LBE PROGRAM MATURITY ANALYSIS54 LBE STUDIES - 1996 THRU 2008 Bank Platform Study Group 10-29-09

  15. LBE vs FC RISK DISCLOSURE SCORES Bank Platform Study Group 10-29-09

  16. LBE & FC NEEDS ASSESSMENT SCORES Bank Platform Study Group 10-29-09

  17. LBE & FC DISCOVERY SKILL SCORES Bank Platform Study Group 10-29-09

  18. LENGTH OF INTERVIEW ANALYSIS - LBEs Bank Platform Study Group 10-29-09

  19. % OF LBEs ACHIEVING ABOVE-AVERAGE OVERALL SCORES BY LENGTH OF INTERVIEW Bank Platform Study Group 10-29-09

  20. % OF LBEs ACHIEVING ABOVE-AVERAGE OVERALL SCORES BY PRODUCTION QUARTILE Bank Platform Study Group 10-29-09

  21. “BEST PRACTICES” SKILLS, BEHAVIORS AND ACTIVITIES THAT DRIVE FC PRODUCTIVITY SKILL/BEHAVIOR PRODUCTION QUARTILE Low 3rd 2nd Top Professionalism / Relating Skills • Stand and Greet 66% 78% 94% 94% • Ask Name 76% 91% 92% 97% • Use Name 49% 67% 68% 75% Disclosure of Risks • Lack of FDIC Insurance 80% 86% 81% 94% Needs Assessment / Discovery • Took Notes 56% 74% 76% 88% • Asked about other Money 57% 68% 64% 75% • Used Paraphrasing Skills 62% 69% 66% 85% Bank Platform Study Group 10-29-09

  22. “BEST PRACTICES” SKILLS, BEHAVIORS AND ACTIVITIES THAT DRIVE FC PRODUCTIVITY SKILL/BEHAVIOR PRODUCTION QUARTILE Low 3rd 2nd Top Needs Assessment / Discovery • Income or Tax Bracket 67% 71% 70% 94% • Risk Tolerance 60% 67% 70% 94% • Quantify Risk Tolerance 40% 46% 50% 73% • Liquid Assets 20% 58% 60% 100% • Net Worth 20% 29% 22% 50% Selling Skills • Test for Acceptance 60% 54% 57% 86% • Ask for a Commitment 60% 86% 80% 88% Product Presentation • Overall Product disclosure 74% 71% 73% 85% Bank Platform Study Group 10-29-09

  23. “BEST PRACTICES” SKILLS, BEHAVIORS AND ACTIVITIES THAT DRIVE FC PRODUCTIVITY • 2nd Quartile producers (Top-Producer “wannabes”) tend to be weak in compliance and single handedly create the greatest compliance risk for bank investment and insurance sales programs! Bank Platform Study Group 10-29-09

  24. BANK INVESTMENT REP“BEST PRACTICES” ARCHETYPES™ “Archetype”: an original model upon which similar things are patterned; a prototype. Bank Platform Study Group 10-29-09

  25. BANK INVESTMENT REP ARCHETYPES™ Bank Platform Study Group 10-29-09

  26. THE PROFESSOR • Professorial reps tend to conduct extremely long interviews, in some cases, as long as two hours. • As a result, the professorial rep can only see about one-half as many prospective clients and production suffers. • Professorial rep compliance scores are weak, proving that a long interview is not necessarily a compliant interview. • Discovery skills are particularly weak because the professor tends to conduct more of a lecture than an interactive interview. • Professorial reps tend to be average producers, typically falling in the 2nd or 3rd quartile of production. Bank Platform Study Group 10-29-09

  27. SPEEDY GONZALES • Speedy reps tend to conduct extremely short interviews, generally around 20 to 30 minutes in length. • Speedy reps also tend to save time by ignoring disclosures and fast-forwarding through the needs assessment process with only a few questions - “How much do you want to invest?” “Do you have the money with you?” • If you buy, Speedy will usually circle back to conduct a cursory needs assessment so that he/she can justify their earlier recommendation and fill in the required paperwork, sometimes, after the fact. Bank Platform Study Group 10-29-09

  28. SPEEDY GONZALES • Speedy will also typically disclose at the end of the interview while filling out the required paperwork. • Speed demon shop scores are usually very low, while sales volumes can sometimes be very high. • Speed demons tend to fall into the second-quartile of production (the wannabe group) and create a good deal of risk for your program. Bank Platform Study Group 10-29-09

  29. GILLIGAN • Gilligan shops are characterized by their inconsistency. The inconsistent rep may resemble the Professor one day and Speedy Gonzales the next. • Some Gilligans also suffer from the disjointed presentation syndrome - they can’t find the right brochure, they are not sure of the rates, and they will send you a prospectus - as soon as they find one. • Gilligan shop scores fluctuate wildly between rounds of shops. • Gilligans tend to be below-average producers. Bank Platform Study Group 10-29-09

  30. THE “BEST PRACTICES” BANK REP • The Best Practices Rep generally spends between 45 to 60 minutes with a prospective investment product customer, and another 15 to 30 minutes if they open an account. • The Best Practices Rep knows and consistently uses a systematic presentation (remember the old sales track). • The Best Practices Rep typically spends several minutes building rapport and gaining the trust and confidence of their customer. • The Best Practices Rep usually discloses the risks associated with investing both up-front and again later in the interview. Bank Platform Study Group 10-29-09

  31. THE “BEST PRACTICES” BANK REP • The Best Practices Rep is considerably more likely than other reps to conduct an in-depth needs assessment using open-end questions, taking thorough notes and frequently summarizing what they hear with paraphrasing skills. And the good news for Bank and Credit Union Investment and Insurance Sales Program Managers is that: • Best Practices Reps also tend to be top-producers, usually in the top quartile of all producers. Bank Platform Study Group 10-29-09

  32. SEVEN KEY SKILLS OF SUCCESSFUL BANK FCs and LBEs 1. DON'T SKIP THE RAPPORT BUILDING PROCESS. Top quartile producers are twice as likely to spend time building rapport and 60% more likely to use their customer’s name during the interview than bottom quartile producers. • ALWAYS TAKE NOTES (PREFERABLY ON A PROFILING FORM.) Note takers are far more compliant and 50% more productive than reps who do not take notes. • CONDUCT A THOROUGH NEEDS ASSESSMENT PROCESS. Top producers are 75% more likely than bottom quartile producers to ask sufficient questions in order to determine the customer’s approximate liquid assets and net worth. Bank Platform Study Group 10-29-09

  33. SEVEN KEY SKILLS OF SUCCESSFUL BANK FCs and LBEs 4. FOCUS ON SUITABILITY While over 90% of reps probe to find out about the customer's prior experience, investment objectives and time horizon, only 70% of reps inquire about the customer’s risk tolerance and just 45% accurately determine the customer’s available liquid assets. • ALWAYS DISCLOSE THE RISKS ASSOCIATED WITH INVESTING. Top quartile producers achieve higher overall disclosure scores in our studies than any other quartile. 6. ALWAYS TEST FOR ACCEPTANCE BEFORE THE CLOSE. Top quartile producers are 50% more likely to test for acceptance than bottom quartile producers. Bank Platform Study Group 10-29-09

  34. SEVEN KEY SKILLS OF SUCCESSFUL BANK FCs AND LBEs 7. SPEND THE RIGHT AMOUNT OF TIME WITH THE CUSTOMER Top quartile FCs generally spend between 45 and 60 minutes with a new prospect. Reps who spend 30 minutes or less or over 60 minutes sell 25% less on average than top producing reps. Top selling LBEs spend proportionately less time depending on their product offerings. Bank Platform Study Group 10-29-09

  35. FOR ADDITIONAL INFORMATION ON MYSTERY SHOPPING STUDIES A copy of this PPT presentation can be found on our website under the “Resources” Tab: <http://www.salesqualitygroup.com> You can get a better idea about what to expect from a mystery shopping study by taking a look at our Mystery Shop Demonstration Website. On the website, simply click on the “Survey System” tab, then on the “Try the Demo” link at the bottom of the page. You can log in for a demo by using: Username: platform 1 Password: workshop Bank Platform Study Group 10-29-09

  36. REMEMBER:“YOU CAN’T MANAGEWHAT YOU CAN’T MEASURE”Sales Quality Research Group4801 South Lakeshore Drive #104Tempe, Arizona 85282(480) 967-7500 Bank Platform Study Group 10-29-09

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