by Mike Shallanberger | Oct 15, 2018
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.
by James Schneider | Oct 11, 2018
There’s a growing tendency in many financial institutions to press the “easy button” for the sake of sales cost efficiency by relying solely on technology to solve every sales problem. Our top analysts have seen the way that this choice is damaging sales competency and revenue growth.
The halo effect for everything that is empowering about technology has led to serious missteps in selling.
What is the “easy button”?
It started when organizations grew dependent on nonsufficient funds (NSF) income from free checking. Next came contact centers, electronic banking and CRM, which gave the illusion that selling is “automatic” and doesn’t require much effort to connect deeply with customers. Even new customer onboarding calls, which have huge upsell potential, soon morphed into reliance on direct mail marketing and email marketing with no follow-up calls.
Next, banks and credit unions invested in e-learning for sales training for their employees. Sales initiatives simply became training initiatives with no accountability for results and no disciplined practice to create behavior change.
Growth in sales revenue, or income, isn’t yet the result of “immaculate conception” where robotic, Internet-shopping customers meet computer-based trained employees at a CRM-predicted intersection of customer preference and an automated offer.
It’s the result of hard work in creating a preferred sales process and of dedicated sales leaders providing a narrow focus, coaching, encouragement, and clear accountability.
It is also a result of great sales and coaching conversations made possible by well-trained, well-defined, and well-practiced social behavior.
So what is the path back to effective selling?
A strong sales culture starts with the hard work of hiring and developing strong sales leaders and creating great sales process and great conversations with customers rather than choosing cost efficiency alone.
For any financial institution there are seven simple (though not necessarily easy) steps back to great selling:
- Identify a single dedicated sales officer for the organization or business unit. This will assure you that every decision affecting your interactions with customers will be made with a sales perspective.
- Clarify selling role accountabilities and hire and/or refit employees to roles that use their strengths.
- Do sales training right. This means investing first in developing competent sales leaders and then give sales personnel training and practice to overcome their sales discomfort and to build sustainable habits.
- Get expert help in creating a preferred sales process for your organization and for each selling role.
- Coach employees how to use your CRM or customer database to narrow each employee’s focus to his or her best few sales opportunities.
- Get senior executives out front, setting weekly and daily priorities for selling by conducting weekly sales progress or pipeline reviews.
- Evaluate each investment in sales development on the basis of outcomes and return on investment, rather than on cost efficiency alone.
Financial selling can get better when banks and credit unions stop pressing the “easy button” for sales.
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by Mike Shallanberger | Oct 1, 2018
Why is it so important that banks and credit unions hire better salespeople, starting today? U.S. bank branches are closing down at record rates. The Wall Street Journal reported in February 2018, “The number of branches in the U.S. shrank by more than 1,700 in the 12 months ended in June 2017, the biggest decline on record, according to a Wall Street Journal analysis of federal data.”
Why are so many banks closing?
One reason is that more people are using online banking apps and tools, which leads to fewer visits to local branches. This leads to fewer face-to-face opportunities to sell.
Fewer people are answering their phones or calling to talk with their bank or credit union representatives about their savings, checking, and investment accounts.
This means that banks need to create more sales, and more opportunities for interactions, with fewer points of contact.
With growth no longer a priority, many organizations eliminated the crucial sales development manager role and cut staffing and funding for sales support. More employees were forced into jobs requiring multiple selling, coaching and/or operations roles, many of which weren’t a good fit for their talents, and the time allotted for actual selling was reduced.
With fewer employees and fewer opportunities to sell, every employee, needs to be an excellent salesperson in addition to meeting the other requirements of their job. For Human Resources professionals, hiring customer-facing employees who are great sellers is an enormous challenge.
How can Human Resources professionals make sure that each new bank or credit union hire has the potential to bring in more revenue?
Schneider Sales Management has a forty-year track record of helping clients increase net income per employee at a rate three times faster than the industry norm. We’ve done extensive research into the best practices of top performing salespeople and have studied how banks and credit unions can make each customer or member interaction work to increase revenue and improve satisfaction and loyalty.
Based on our research, here are five ways you can hire better salespeople, starting TODAY.
- Create the Right Sales Goals. Challenging sales goals work as a motivational tool for the simple reason that salespeople work harder and longer to achieve them. At most banks and credit unions sales goals are set at the top and divided among business units and branches based on recent history and divided among individual salespeople equally by job role without negotiation. Typically, every salesperson in a job role like personal banker will have the same goals regardless of experience, competence or sales opportunity. 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 supervisor. 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.
- Conduct 90-Day Onboarding. When you hire salespeople you’re making an investment, and you need an immediate return on that investment given the industry’s high employee turnover rate. You never want an employee to leave because he or she didn’t feel prepared to meet your expectations for sales. The right way to do sales orientation is to state your expectations for the first 90 days in terms of learning, preferred behavior and sales production, to invest in product training and sales training immediately so employees know how to succeed, and to require new employees to test out on various aspects of product knowledge and preferred behavior throughout their orientation.
- Incentivize properly. Sales compensation is driven by employee scorecards and goals. If the scorecards are off, you pay for the wrong results. If the goals are off, you either overcompensate employees or demotivate them. Surprisingly, we find that most banks and credit unions overpay their employees with incentive dollars by trying to pay everyone something instead of paying their best contributors more for the results that matter most.To create maximum value for your incentive payouts for any job role pay only for sales above a goal level achievable by training and good supervision alone, pay for behavior and outcomes that are profitable, within the employee’s control and associated directly with discretionary effort, and pay compensation disproportionately to top producers and supervisors who drive most of your production.
- Hire for the right selling role. Simply put, different selling roles require different competencies. Our industry research identified five distinct selling roles in banks and credit unions, each requiring a different set of competencies that drive high performance. The five roles are SERVICE SELLING (think teller), CONSULTATIVE SELLING (think personal banker), COMPETITIVE SELLING (think commissioned mortgage originator or business development officer), COMPLEX SELLING (think commercial lender), and SALES SUPERVISION (think branch manager or sales manager). Two additional roles, FRONTLINE SUPERVISION (think teller supervisor) and ENGAGEMENT SELLING (think universal banker) are subsets of these primary roles.
- Assess bankers’ sales potential before you hire. The difference in sales production between top sales producers and average or low producing salespeople in banks and credit unions is staggering. Hiring employees who can sell is vital to increasing revenue. Our groundbreaking national research with the University of Colorado at Denver Business School concluded that top producers outsell average producers two-to-one and outsell low producers ten-to-one. This is true for every selling role from teller and personal banker to commercial lender and mortgage originator.
For HR Managers, the Optimum Performance Profile™ is a groundbreaking tool to assess and profile candidates for their sales aptitude. Learn more about the tool and shift your bank or credit union’s culture to one that transforms each contact, each lead, and each conversation revenue.
