Banks have been putting “sales culture” at the top of their priority list for almost three decades. However, only a handful of banks have a sales culture that actually works. So, with the FDIC saying that the banking industry has lost over 85 percent of its market share during the last 100 years, the pressing question is: Why?
The problem is the process. That’s right—the sales process in banks is screwy. Worse yet, it’s unchallenged!
So, what’s wrong with the process? Consider the following:
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At many banks, sales feels like sales. It’s about the employees pushing the customer. Sales should be about helping the customer buy more services and having them RAVE about you to their friends because you provide such great service. Most bank employees have no idea how to make sales feel wonderful for their clients.
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Silos continue to exist. Mortgage lenders, who should easily average six to seven cross- sales per closing, have none. The problem is that they either don’t know how or they don’t care to do the extra work.
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Rate inquiries come in all day long and are met with well-meaning employees who just quote numbers and percentages and then hang up the phone. The only chance you’ll get any business during these calls is IF you have the lowest rate—and that’s a game you can’t win.
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Bank executives think that sales culture simply means “incentives, training, and goals, ”all of which do matter. However, collectively, they have only a small impact on your results. The most significant elements aren’t even factored in.
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The 1980’s model of “Features, Benefits, and Closing” sales training continues, even though it’s ineffective in creating cross-sales or selling against lower-priced competitors.
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Lenders strike a deal, get a commitment from the prospect, and then find out they are still being rate shopped. Now they only get the deal if they give away the margins.
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Many banks don’t have effective incentive programs. Research across all industries shows there are “rules” of incentive pay that will optimize return on incentive dollars. Almost all banks break the rules.
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Banks hire the wrong people. Even though research has proven that “interview” hiring is only 17 percent effective in hiring the right people, banks either don’t use hiring tools, or they use a plethora of personality-based assessment tools. Personality has virtually no correlation to sales results.
These are just a few of the reasons why the sales culture dream never becomes a reality. To overcome these challenges, you must implement two important keys to create more profit-rich sales. First, you must have the culture piece. Ask yourself: Have you created a place where people want to win, know how to win, and are protected from the whiners, complainers, manipulators, and victims who drain energy from the achievers? Culture comes before profits and many banks tolerate an exorbitant amount of dysfunctional behaviors because they don’t know how to exorcise them out of the culture. Instead of knowing what to measure and how to celebrate achievements, they measure results only and “whip the ponies” when people don’t perform.
Second, do you have an easy, step-by-step system for prospecting and cross-selling that is based on what works? Do your people know the right questions to ask to make sure you get the business—even if you don’t have the best rates? Do they know the commitments they need in advance to make sure that all loans that go to committee actually get closed? Do your people know how to quickly eliminate the time wasted on prospects who string you along and only use you to negotiate their current bank down? And do you have the checks and balances in place to make sure those things don’t happen? Is your sales funnel indicative of reality—is it measuring the right things?
Sales is a business process, just like balancing a cash drawer is a process. The “sales culture dilemma” has no chance of turning around until banks find out what works and what doesn’t, and then use what works to easily and inexpensively turn around a financial institution.
