The myth that the financial industry is more sophisticated than ever in selling is perpetuated by bankers at the nation’s very largest banks and credit unions.
They’re the primary tellers of their stories of sales and technological innovation at banking conferences, but most of their growth in sales has really been the result of their brand marketing clout and their ability to leverage big investments in data mining with target marketing, not the result of their skill at sales process or leading frontline employees in the sales effort.
The bottom line impact of allowing sales process and employee skills to atrophy is enormous. The sales reports we see show that sales per banker, referral sales, number of sales calls made, sales coaching observations, number of new customer onboarding calls made, and core product cross-sales are down throughout the industry. Many banks and credit unions are hitting growth goals through high-volume single-product transactional selling driven by targeted promotional offerings. To make matters worse, most of the targeted offers are at better-than-market pricing. In effect, the industry has reverted to buying low-margin transactional business.
So, what’s one step that can improve your sales by up to 30%?
Simply put, improve your organization’s sales scorecards and goal setting methodology.
In most banks and credit unions sales goals are set at the top and divided among business units and branches based on recent history, and then divided among individual salespeople equally by job role without negotiation. Typically, every salesperson in a job role like personal banker will have the same or similar goals regardless of experience, competence, sales opportunity or competitive landscape. This is infinitely better than no goals at all, but clearly not the best approach based on our assessment work at over 1,400 bank and credit unions.
Here are the most common goal setting approaches ranked best to worst…
- A combination of team/unit goals and individual goals that are negotiated based on skills, experience and opportunity of the employee.
- All individual goals – negotiated
- All individual goals – dictated / assigned
- All team goals / unit goals
- Use of only short-term, promotional or sprint goals
- No goals at all.
Historically, cross-sales of core products, closed referrals and revenue per employee all run about 30% to 36% higher at institutions that use individual goals that are negotiated.
The psychological foundation of goals as a factor in motivation is that salespeople accept far more ownership in goals that are negotiated rather than assigned and in goals which they believe are achievable because they’ve participated in sales activity planning that requires them to think about how their goals could be achieved.
For decades, we’ve recommended to our clients that they implement a simple goal setting process based on 90-day action plans negotiated between individual salespeople and their sales leader. Each plan includes 3-5 annual goals, 3-5 objectives for the quarter, activities and strategies to accomplish the short-term objectives, and the selling behavior the employee will work to improve.
This process enables an organization to change priorities every quarter based on their current financial focus and gives every unite leader a point of focus for coaching and for objectively evaluating an employee’s contributions and recognizing top performers. Done well, it gives every employee a sense of purpose, accomplishment and motivation.
When scorecards and goal setting reflect the values of the organization and the importance of connecting deeply with customers and members, revenue follows. Every time.
Start the sales process right by hiring right. When you implement the Optimum Performance Profile, you’ll be able to immediately see the strengths and weaknesses of potential sales and service employees. Hire right, then support your sales people with goals and scorecards that help each employee become a master of sales.
