We are facing an uncertain
economy. Until that uncertainty fades, many small to mid-size
businesses will continue paying down debt with excess cash .
. . affecting revenue and both sides of a bank’s balance sheet.
And while there are still revenue opportunities in our markets,
the competition for each opportunity is high
In a difficult economy, how you manage your sales force will
determine your success.
and will remain high
until the economy turns around. Yet, in spite of the economy,
most financial institutions remain committed today to meeting
their revenue goals . . . without sacrificing profitability
or asset quality. Impossible? No. Difficult? Yes.
If your business-to-business
sales force is a major contributor to your top-line, then its
ability to win business in a highly competitive environment
will be a critical component of meeting the bank’s goals. All
the data on sales performance point in the same direction: sales
teams that are highly focused and well managed win more often.
In a difficult economy, how you manage your sales force will
determine your success.
An effective sales
management process includes all the tools,
support systems and motivators that
are used by sales managers to focus, guide, and direct a high-performing
sales team. Who are the sales managers in your bank? A sales
manager is any manager who has team members with sales goals.
Who are the sales team members? A sales team member is anyone
who has sales goals. The team may include branch managers, commercial
bankers, small business bankers, or specialists (for example,
cash management officers). For sales managers to build sales
teams where each sales team member has the skills to win in
a competitive market, a bank needs a sales management process
that has the “right” combination of those tools, support systems,
and motivators. In this white paper and those that follow, we
will look at each element of an effective sales management process
. . . one at a time and in combination.
Sales
Performance Varies within a Sales Team
In the ideal sales
force all salespeople are intrinsically motivated. They have
within themselves all the attributes to be highly successful
in a competitive sales environment. Each salesperson has well-developed
cognitive skills, language skills
and social skills . In addition,
each has a high degree of personal discipline ,
a passion and interest for selling, and a
sense of urgency to get things done.
What percentage of
a typical sales force has all these attributes? Results tell
the story. Assuming sales goals are set appropriately (many
are not, a subject for an upcoming discussion), we define high-performers
as salespeople who consistently exceed their sales goals, reaching
150 to 200% of goal quarter after quarter, year after year,
whatever the state of the economy. These high-performers need
minimal guidance, direction, or management to be successful.
(They do however have significant recognition needs!) Based
on data from our practice, only about 10% of a bank sales force
consistently performs at these levels. Because this group is
already working at or near full capacity, we can’t expect them
to carry most of the revenue growth forever.
The key to long-term,
sustainable revenue growth is the rest of the sales team. In
most banks, about 80% of sales team members perform at an average
level (80% to 120% of sales goals, again assuming the sales
goals are set appropriately). The sales people in the average-performing
group have a higher need for “external” support and motivation.
If they knew how to perform at a higher level they would. As
one bank sales manager said, “My average performers want
to win, they’re good people.” Yes, but in most cases they
don’t know how to win. They need a more complete
system of tools, support, and motivation:
one that develops the strategies, tactics, skills and behaviors
that will enable them to win. Providing this system is the primary
responsibility of the sales management team in a bank.
Building
a Sales Management Process
Most inexperienced
sales management teams think they only need two “motivators”
— goals and money. However, when we look at the highest performing
sales forces in banking, we see a broader range of support systems
and extrinsic motivators that combine to form an “over-arching”
sales management process:
Support
Systems |
Extrinsic
Motivators |
•
Clear direction, clearly communicated |
•
Challenging goals |
•
Ongoing guidance, delivered unrelentingly |
•
Visible accountability |
•
Immediate feedback on performance |
•
Monetary incentives |
•
Recognition of high performance |
|
•
Appropriate use of peer influence |
|
The discussion below
explores how successful sales management teams build and implement
one of these tools: On-Going Guidance, Delivered
Unrelentingly .
Increased
Sales Performance Not Just Increased Sales Activity
“In the last six
months we’ve increased our calls by 50%. But we’re not seeing
significant increases in our pipeline or closed business. I’m
concerned about the quality of our calls.”
The bank president’s
comment came at the end of a executive management sales meeting
that reviewed last quarter’s closed business reports, current
pipeline numbers and call activity summaries. Activity levels
are higher than ever — his bankers are on the streets. But so
are his competitors. So, how do we win in tough competition?
Apparently, making more and more calls isn’t the answer. (Although
a certain level of calling is critical. In the best performing
sales teams, commercial bankers are making 20 to 25 sales calls
per month, branch managers 15 to 20 calls, and small business
bankers 25 to 35.)
Winning in a competitive
environment goes beyond just being on the streets and picking
the “low- hanging fruit.” Competing to win means focusing on
the right targets, using the right value proposition, working
with the true decision maker, thinking like a business owner,
and developing clear and effective strategies based on these
factors. So the question about whether his people were making
quality calls was on target.
Isn't
the Quality of Sales Calls a Sales Training Issue?
Most banks today have
built the foundations of a sales management process: they have
established goals , introduced monetary
incentives , and hold regular sales meetings
to discuss pipelines and closed business .
These extrinsic motivators are a part of all
successful sales organizations. In addition, most banks have
invested significant sums of money in providing sales training
for their sales teams. But, as many of these same banks have
discovered, sales training combined only with extrinsic motivators
produces limited results (except with high performers, who probably
didn’t need the training in the first place!)
The sales skills that
are taught in most sales training programs are based on research
that has studied the sales behaviors of high-performing salespeople.
These “best practices” are broken down into components that
can be taught in a classroom setting — things like account management,
sales call communication skills, rapport building, priority
management, etc. But classroom learning does not ensure sales
success in the real world. In most instances, salespeople leave
sales training programs with a good understanding of the skills
required for success. In order to become competent using the
new sales techniques, they must practice the skills hundreds
of times in real-life situations.
Unfortunately, when
average-performing salespeople first start
using new sales skills with real customers and prospects, their
attempts feel awkward and unnatural. They may try the skills
a few times and if they don’t “work,” they abandon them. “That
may work in some markets, but it doesn’t work in mine”
is a typical comment. So, they revert to their old, more comfortable
habits within a short time. Properly designed extrinsic motivators
can help. For example raising call targets and creating highly
visible call reporting can drive practicing the new skills by
creating an emphasis on making more calls. Of course the underlying
assumption in this approach is that practice makes perfect.
But in reality, effective sales calls require so many skill
sets to be fine-tuned that accountability
alone gets you primarily quantity, not quality. Just practice
is not enough. Mastering all the skill sets will take a support
tool. For average-performers, mastery will take the
support of a sales manager’s on-going guidance.
Let’s look at one example.
All sales training programs teach some form of pre-call planning
and provide a planning tool, usually a form to be completed
prior to an important call. The call planning form usually requires
specific information on the customer/prospect situation, issues
that have emerged in recent calls, call objectives, needs to
develop, and the next step to advance the sale. This information
is critical for building effective call strategies. However,
it does take time to complete . . . about 20 minutes to do an
adequate plan. How many times does a salesperson do even this
minimal level of preparation? “I’m too busy for all this
paperwork” is a comment we hear constantly.
The research on highly
successful salespeople shows a high correlation between planning
a call and effectively developing needs and between
developing needs and success in advancing a sale .
Clearly, a better job of planning produces better sales results.
So, how do you get your salespeople to see the need and value
in call preparation? To see that it’s time well spent? It goes
beyond extrinsic motivators.
It takes coaching,
a key component of on-going guidance. When sales managers make
the time to meet with salespeople one-on-one to strategize
an upcoming sales call and then to formally debrief the same
call, more needs are developed, more sales are advanced. And
when a bank CEO or head of commercial banking asks for a call
plan and then discusses call strategies the day before a call,
call planning becomes “the way we do business.” When salespeople
begin to see a correlation between call planning and improved
results, when they see everyone from the top of the bank down
is making the time to plan their important calls, call planning
increases dramatically. When the use of call planning becomes
a part of day-to-day selling, call quality and sales results
go up. In the end making more calls is good practice but coaching
drives call quality.
Sales training is a
form of guidance. But the sales management support system says
“on-going guidance, delivered unrelentingly.” The on-going
and unrelenting are key. Sales managers
who make time to coach new skills, who coach
important sales calls before the call, and who spend
time coaching sales strategies (not just credit
strategies!) see sales results improve every quarter, every
year.
The graphic below
summarizes the points we are making. To make any strategy, tactic,
skill or behavior a part of day-to-day selling requires three
steps: articulate the process you want the sales team to use
(sales training provides a sales call model); build accountability
to encourage “using” the new process (extrinsic motivators such
as call tracking, pipeline reporting, contests, goals, incentives);
use effective support systems that improve the quality of sales
calls and drive sales performance (pre-call/post-call coaching).
Action
Steps
Effective sales management
requires a high level of structure and discipline over a long
period of time. To improve sales call quality, here are several
steps you can take. These disciplines go beyond sales call training
and are critical factors towards improving sales performance:
• Identify
key relationships and key prospects and stay unrelentingly focused
on them. Clearly define your target market. Who are
your best customers? What do your best prospects look like and
where can you find more? Help your sales team to prioritize
their sales time and to stay focused on the customers and prospects
that you want, not just the ones that walk in the door. This
clarity of direction and unrelenting focus will insure that
you retain key customers and develop the “right” new relationships.
• Improve
relationship planning. Proactive selling demands
a well thought out sales strategy for each key relationship:
in other words, a formal relationship plan. These plans are
reviewed and “coached” by sales team managers, presented periodically
to senior management and product specialists, and updated regularly.
In high-performing sales teams, relationship planning is viewed
as a key to long-term top-line growth.
• Make
pre-call planning the norm. Each call on a key customer
or prospect is an important step in growing revenue. Make the
content of sales calls important. Pro-active selling is a planned
and managed process. So are sales calls. “Winging calls” is
not the way it’s done in high-performing sales organizations.
If you’re trying to
improve the quality of the calls your people are making—and
generate top-line increases in revenue without sacrificing margins
or credit quality—sales training is just one element of a well-managed
sales process. Without the other key elements, its benefits
will be short-lived.
