Turn Boring Bank Products into an Interesting Story, Paul Smith, Part 2

Announcer:

And now your host. He thinks his uncle, Father Bernard Coughlin, SJ, is a saint. Kelly Coughlin. Kelly Coughlin is a CPA and CEO of BankBosun, a management consulting firm helping bank C Level Officers navigate risk and discover reward. He is the host of the syndicated audio podcast, BankBosun.com. Kelly brings over 25 years of experience with companies like PWC, Lloyds Bank, and Merrill Lynch. On the podcast, Kelly interviews key executives in the banking ecosystem to provide bank C suite officers, risk management, technology, and investment ideas and solutions to help them navigate risks and discover reward. And now your host, Kelly Coughlin.

Kelly Coughlin:

The name of the book I read is Sell with the Story, and this is part two of my interview with Paul Smith, who’s the writer of that book. Paul, how about you and I do some play acting now? I'll be the banker offering traditional commercial banking which are depository and lending services. I know you've deposited your wealth of money in your bank there and you've probably borrowed money for your home. I've produced two sales pitches that are in my mind clear, concise, and credible. That's been my mantra as you've heard me saw a couple times in the previous podcast. I want it clear, concise, and credible. Now, I have not focused on it being interesting, attention getting, and memorable, and that's where you come into the picture. I'm the banker. You're going to be the prospective client whom I've never met. This is just a sales introductory presentation. I'm going to give the initial pitch, and you just make some comments on how I could juice this up a little bit. It probably doesn't lend itself perfectly for a story, but if you can't get this introductory piece down where it's interesting, attention getting, and memorable, I never get a chance at telling the story. All right?

Paul Smith:

Yeah. That would be great.

Kelly Coughlin:

Let's give it a shot. Hello, Paul. My name is Kelly Coughlin. Paul, I'm a vice president and commercial loan officer at Bank Bosun in Minneapolis, Minnesota. I love to work with companies to help them succeed and grow by offering high-quality, competitively-priced cash management and lending services. We've been around since 1960. I was hoping I could come by your office and get to better understand your business and the banking services you currently utilize and maybe identify any services we have that might help you better manage your business. Would that be okay?

Paul Smith:

At this point, there's a couple of different types of stories that you might tell instead of what you just said. By the way, that was just first two or three sentences. If you and I really had a conversation, it would last three or four or five minutes. You'd have time to say more stuff than just that. A couple of types of stories you might tell there. One is, once they know that you're a commercial banker, they're used to getting phone calls from commercial bankers. They'll know what a commercial bank is and the kind of things that you might offer. What they're wondering at that point is, how are you any different than the other five commercial banks in this county, four of whom have already called me? That's what they're wondering. Why should I even bother meeting with you if you're going to be the same as all of them? What you need at this point is a how we're different from our competitors’ story. Let me give you an example of one of those from a different industry, the industry of the commercial cleaning business.

These are the folks that literally come in at night and clean your offices. You've got these companies. One of them is United Building Maintenance. I think they're in New York. The owner of that, Sharad Madison, when he's at that stage and he's got to convince people that his company is different than the others. Instead of listing, here are the four reasons why we're better than our competitors. He tells them a story about the last new client that he got. He said, when we get a new client, I always go in before the old cleaning company has stopped so I can observe them working because I typically end up inheriting the contract labor that comes with these cleaning services and I want to see how they're doing their job now because I'm going to have to get them to do it better, because I want to do better. He says, we go in, in the middle of the night, and we come across this guy. He's shampooing the carpet. He’s shampooing with one of those shampooers that you'd use at your home, a residential style shampooer. But there's a half a mile of carpet just on one floor of this building.

It's going to take this guy weeks to get through shampooing all of these carpets. What I did, as soon as we took over the contract I put him in a commercial-grade riding shampooer that you can sit on. It's three times as wide. It goes twice as fast. He can get the whole building done in one night. He said, then we went over to the offices where they were cleaning the cabinets. I looked on top of all the file cabinets and there were these half moons swiped out in the dust. I know exactly what that means. What that means is, the person cleaning the cabinets isn't tall enough to reach the back, and they're just reaching up and they're swiping out a little half-moon shape. The truth is, it would be better if they didn't even clean it, because it's the contrast between the dusty part and the clean part that makes it obvious that it's dusty. He said, I went to find the people that are cleaning those cabinets. Sure enough, I was right. Most of them were about 5’4” tall and these cabinets are 6’ tall.

They just can't reach the back of them. I gave them these simple, little plastic 2.5’ extension wands on their dusters so they can reach the back. That solves the problem. He just told these little simple stories like that. Now, you know the difference between the way he does business and the way his competitors do business. For you, I would come up with a story like that that explains in a very concrete way how doing business with you as a commercial bank is different than the bank across the street. Now, if you're calling on somebody who doesn't know all the basics, then it's a different story you need. It's one of those introducing yourself stories that explains in a very simple way what it is you do. But it's not going to be radically different from what anybody in your industry does, because you're just explaining the basics. That's a different kind of story that you would use.

Kelly Coughlin:

Yeah. That's terrific, Paul. There's a story I remember reading in your book about, I think it was Andy Smith and these relocation bonds I thought was pretty interesting. Why don’t you share that with us?

Paul Smith:

This is a guy who works in investment banking, I guess you would say. His job, he's a bond dealer who sells bonds to banks, to other banks. You know how these Fannie Maes and Freddie Macs will aggregate a bunch of home loans and put them together into a big multimillion-dollar asset that they can sell to banks. All of them are essentially the same, depending on what the number. It would be, these are 30-year mortgage bonds with 3% coupon and they're trading at 30 basis points below par or something. If it's another package of loans and it's got the same numbers, 30 years, 3% coupon, 40 basis points below par, it's going to be almost identical in terms of an asset. What he wants to do is differentiate the ones that he's putting together or the ones that he's selling from the others. One of his favorite ones to sell he calls relocation bonds. The way he explains that is he says, these are bonds that are almost identical to all the others that are 30-year 3% coupon 40 basis points below par, except all of the borrowers, all the homeowners that have all these mortgages are people who have recently been relocated with their company.

You know how that works. You get a big company, a General Electric, a Ford Motor Company, a Procter & Gamble, whatever, and they want to send their senior managers to a new location to run the new office here and then move them around somewhere else because they're grooming them for senior management positions. Every three years, they pick up and they move somewhere else. The company literally buys out their mortgage, pays to relocate them to a new city, they buy a new house, they get a new mortgage. Then, three years later, it happens again. The company is buying out that mortgage and moving them somewhere else. What you've got, the numbers sound the same, but the truth is, the underlying riskiness of these bonds is way different because instead of being Paul Smith that's on the line to pay off this mortgage over the next 30 years on month at a time, the truth is in three months, some multibillion-dollar company is going to pay of the mortgage, which is a guaranteed thing. General Electric is not going to go bankrupt tomorrow, but Paul Smith might.

The risk profile is really different, even though the numbers all sound the same. Even if he's not getting relocated, these relocation people, they're so upwardly mobile that they're going to get promoted soon and they're going to want to buy a bigger house. They're going to cash out this loan and get a new one. This thing is going to turn so much faster than a regular loan that has the exact same financial statistics attached to it. He would tell a story like that about these people moving from house to house, from city to city, getting promoted. He'd pick one person. He actually tells a story about his brother, which turns out to be me, by the way, going through that career that way. That's his story that sells the bonds that helps the bankers see that this set of bonds is different than the others. It's a story that that banker can then tell the bank president, and the bank president can tell that story to the shareholders of the bank. It will give all of them comfort that, oh yeah, we're investing smarter than just your average banker who’s buying bonds just based on the numbers.

Kelly Coughlin:

Okay. That's terrific. I want to finish with just a restatement of your perspective on story structure, because I think that's what I want the bankers to come away with. Can you talk about selling with the story structure, the steps, the transition in explaining the hook again? Context, challenge, conflict resolution. I show you have transitioned out. I'm not sure what that means. Lessons, and then recommended actions. Do you mind spending some time on those?

Paul Smith:

Yeah. The main four parts of the story are the context, the challenge, the conflict, and the resolution. Those four parts, that’s the real story. I'm often asked by people, how do I transition into my story? How do I kick off my story and get into the storytelling from whatever else I was saying before? That's what the hook does for you. It gets your audience’s attention and lets them know that if you will pay attention for the next two minutes, I'm going to tell you something that's very important to you. It's going to be a story, but they don’t need to know that. It gets their attention and forces them to be interested in listening to your story.

Kelly Coughlin:

That would be the why.

Paul Smith:

Yes. That's that first question that you need to answer, which is in the hook, which is why should I listen to this story? It's a half a sentence. It sounds like, the best example of that I've seen was, and then you start into your story. If somebody asks you, why do customers come to your bank instead of other banks? Your answer could be, I think the best example of that was, a customer of mine named Bob that we just had start last week. Let me tell you about him. That's your hook. All the hook does is, it tells them, I'm going to tell you a story about a guy named Bob who’s like you, but that's the hook. It's, oh, good, because that's exactly the kind of thing that I want to hear right now. I don’t want to hear some sales pitch. I want to hear about somebody real. So, that's the hook.

Kelly Coughlin:

If it's a millennial that's coming that's coming into your bank and, why should I go with you versus Rocket Mortgage? You don’t pull out, I had an 80-year-old woman in here.

Paul Smith:

Remember we said three most important parts of the story is get a relatable main character, a hero they care about? People will care about a hero that's like them.

Kelly Coughlin:

Like them, okay.

Paul Smith:

Yeah. That's the first question. Then, you're into the context, and two questions you've got to answer in that part. Where and when did it take place? And who’s the main character and what did they want? That sounds like, back a few years ago at this other bank, there was one of these customers who was trying to get a loan. That's it. That's the context. The next thing, the challenge. What was the problem they ran into or the opportunity they ran into? The problem was, it was too hard to get a loan at that bank and they couldn't get a loan. They couldn't buy the car or the house or whatever. Their wife divorced him because he couldn't provide for the family. That's the context is, some guy two or three years ago, at this other bank, trying to get a loan. That's the context. Then, like I said, the challenge or opportunity is what good or bad happened that created the whole need for the story to happen? Question five gets you into the conflict.

Question five is, what did they do about it? This is where you show that honest struggle between the hero and the villain. You've got to see them. You'll say, he did this and then the banker did this and then he tried this and then the banker did that. This is the longest part of the story, by the way. The conflict. Answering question number five could be half of the story. Half of the words in the story. Half of the time is this conflict about the back and forth between the hero and the villain, the struggle they had. When you're done with that, then you've got to answer question number six, and this is the resolution of the story. It's, how did it turn out in the end? How are the things or the characters in the story changed as a result of this? A made-up story it might be, he got so fed up that he took all his money out of that bank and came across the street to deal with me. That's how the story was resolved at the end.

Kelly Coughlin:

I assume that you like to do consulting with banks and other companies, obviously. What do you do, training sessions with them and public speaking? That sort of thing? Is that part of your business model, too?

Paul Smith:

Yeah. It's specifically training on using storytelling to either help them be a better leader or help them be a better sales person. I do half day and full day training sessions with their whole team, usually not one-on-one. I can do that as well, but the most effective ones are a full day, in a conference room with their whole leadership team or their whole sales staff on how to craft better stories to be more effective in their job.

Kelly Coughlin:

I want to know how people can find out more about you and your work and get in touch with you. Is there anything else that I missed that you feel need to be communicated?

Paul Smith:

For now, folks can find me, the easiest way is on my website which is LeadWithAStory.com, which is the name of my first book. They can find out about my books and the coaching and training I do on storytelling for leaders and sales folks.

Kelly Coughlin:

Paul, thank you very much. That's terrific. I enjoyed talking to you. Thanks.

Announcer:

We want to thank you for listening to the syndicated audio program, BankBosun.com The audio content is produced and syndicated by Seth Greene, Market Domination. Video content is produced by The Guildmaster Studio, Keenan Bobson Boyle. The voice introduction is me, Karim Kronfli. The program is hosted by Kelly Coughlin. If you like this program, please tell us. If you don’t, please tell us how we can improve it. Now, some disclaimers. Kelly is licensed with the Minnesota State Board of Accountancy as a Certified Public Accountant. The views expressed here are solely those of Kelly Coughlin and his guests in their private capacity and do not in any way represent the views of any other agent, principal, employer, employee, vendor or supplier.