Does Your Bank Start Deals at “No”?

March 23, 2016 Jim Young


No Cards

Back in a previous life, when I was newspaper reporter covering college sports, there were media relations departments at certain schools that I dreaded having to ask for anything.

There was no such thing as a simple request. Anything that deviated from their strict parameters was guaranteed to be turned down.


Once I was doing a story about coaches at various local schools who still played pickup basketball. It was a light piece that humanized coaches by showing that they really weren’t that different from their players – they still loved to get out on a court and compete.

There was no reason – at least none I could think of – for a school to avoid participating in the piece.

While I was at one college interviewing one of its assistant coaches, I found out his pickup game was starting in just a few minutes in the gym that was just few steps away. I sought out my contact in media relations and told him my newspaper would love to get a few pictures of the coaches in action.

“Sorry, they don’t want to do it,” was the immediate response.

Bewildered, I asked for an explanation. A shrug of the shoulders was all I got in return. Later I tried an indirect route, mentioning to one of the coaches that it was a shame we weren’t able to take pictures of his game. I wanted to know if the coach was truly against the idea, or if the media relations director had used that as a convenient excuse.

“Yeah …” was his non-committal response, with another shrug of the shoulders.

Why did the school say no? I can only assume it was because that was their default position.

There was no logical reason for refusing to participate, but, in the eyes of the media relations department, there also wasn’t a compelling reason TO participate. And since they started at “no,” that’s where they ended as well.

“No” Deal

Is your bank like that?

Does it go into potential deals so determined to minimize risk that it starts off at “no” and puts the burden on the customer to somehow move the needle over to “yes”?

Does your bank come in with a set way of structuring the deal and refuse to waver if it doesn’t match what the customer has in mind?

Or, instead of starting at “no,” does your bank begin somewhere else?

It doesn’t have to be at “yes.” The banks that do that are the ones offering unsustainable rates and generally causing headaches for the rest of the market.

A better alternative is “Let’s see what we can do.” Banks that start here have a goal of getting to “yes” as well as the understanding that “no” could still be the final answer.

So when the customer counters with a rate that won’t allow the lender to meet the bank’s ROE goal, “no” isn’t the immediate response. Neither does the lender capitulate and meet the borrower’s rate just to get a “yes.”

Instead, the lender takes a moment to see what the bank can do. Because banks can do so much more than just tweak the rate. And somewhere among all those other ways to shape a deal, there may very well be one that is both profitable for the bank and attractive to the borrower – i.e. something everyone can say “yes” to.

Spending Money on “Yes” Systems

It’s not just about changing minds and attitudes at banks. It’s also about changing the budget.

Banks spend a great deal on systems and processes that are designed to say “no.” Credit risk systems, exception tracking, compliance review, more thorough appraisals, new levels of approval authority … the list goes on. These are all huge investments expressly built to avoid mistakes but not to generate revenue.

What if your bank shifted some of that spending away from “no” systems and instead started investing in finding more ways to reach an acceptable “yes”?

Where Do the “No’s” Go?

Here’s the thing about that photo request. When the one school said no, I simply went to their nearby rival school and asked them instead. My newspaper got the photos we wanted, while the rival school got some nice publicity.

If you start off at “no,” you’re bound to miss out on some viable customers who take their deals elsewhere to another bank in your market. So when you try to win their business in the future, you’re now starting off in a new position.



The post Does Your Bank Start Deals at “No”? appeared first on PrecisionLender.


About the Author

Jim Young

Jim Young, Director of Content at PrecisionLender, is an award-winning writer with experience in a range of positions in media and marketing, from reporter to website editor to content marketer. Throughout his career Jim has focused on the story – how to find it, how to understand it, and how best to share it with others. At PrecisionLender, he manages the many ways in which the company shares its philosophy on banking and the power of relationships. Jim graduated Phi Beta Kappa from Duke University and holds a masters degree in journalism from Columbia University.

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