This is a story about a sales call. A  very experienced, productive (among the top 25% of his sales force) commercial banker took me on a call to one of his customers.  Since rates are low and many banks are urgently seeking to lend money, the lender wanted to refinance the company’s building which, today, is financed by another bank.  The objective of the call was to gain the company’s agreement to consider a proposal for refinancing the building.

The lender opened the call by indicating he wanted to discuss refinancing the building,  then worked through a series of “fact” questions (how much is outstanding on the existing loan, when is the maturity date of the current loan, how big is the balloon payment at the end, what’s your current interest rate, who’s your attorney, when  do you want to close), then led the conversation as follows:

Lender:          Would you like the new loan to mature on the same date as the old one or would you like to run the loan out 15 years?

Customer:  I don’t know. What’s the difference?

Lender:           I’ll put two scenarios together so you can see the difference between them. You can compare them to your business plan, talk to your partners to see which one makes sense, then get back to me.

Customer: OK.

Lender:          Great, I’ll have the proposal back to you early next week.   [End of call.]

What’s wrong with this picture?  No better example of  lousy questions leading to lousy answers and a lousy emotional state.

After the call, as I was debriefing the lender about his call, he said: “You know, if their rate is X%, I’m going to have a tough time beating it, and we’ll probably not be able to do the deal.”

No surprise there. His was a CLASSIC combination of product push positioned  PURELY for his own benefit and,  in the end, the decision will come down to price… What’s the rate?  Since the competitor’s rate will be tough to beat, his conversation may have been a waste.

Think about how different this conversation could have been had it started with the client’s day to day experience in her business:

Lender:            … So, you’re continuing to grow, even in the recession.  What challenges are you experiencing around cash flow?

Customer:  Well, it’s pretty tight most months.  We’re driving our inventories down as low as we can, but the sales growth means we’re financing a lot of receivables and inventory.

Lender:            What challenges is that creating for you?

Customer:      We can’t carry the breadth of inventory we really need to meet our customers’ shipping expectations. That’s the primary one.

Lender:            And what impact does that have on your business?

Customer:      Well, we lose some sales to competitors. Maybe as much as $100,000 a month, about ten percent of our sales.

Lender:            How much additional available cash would you need on a monthly basis to address this challenge?

Customer:      Every dime would help. (Thinking.)  We really need to be carrying another $200,000 of inventory, at least. And, then we need additional cash for other aspects of operations.

Lender:            And is that need fairly consistent or does it fluctuate, for example, seasonally?

Customer:      It’s pretty consistent.

Lender:            Well, let’s think about different ways to address that. Tell me more about….

In this example, the banker’s questions focused on the business owner’s growth challenges, opened the door to strategies that would  solve an unwanted  problem,  and laid the foundation for a proposal that would address a business issue that the owner thinks is important.

Rate will be important but not the sole criterion. Other connections and other value were created, with the promise of more through additional conversation. The value created in the sales conversation is proportional to the quality of the questions asked  and who it is we’re trying to serve by asking them.