In years past, by September senior bankers seemed to be focusing more on planning for the following year than exploring how to get more revenues during the few months that remain. However, times, revenue pressures, and the competitive environment have changed. Many banks we know are putting increased emphasis on what they can accomplish in September, October, November, and even December.
The reasons for this very near-term focus may range from a gap in current revenue versus full-year expectations to continued senior management frustration with branch, small business, and middle market productivity. Some senior managers have looked at productivity numbers and want to see significant improvement NOW. The good news is that they can achieve some positive impact relatively quickly.
What specific actions can senior management take to heighten last quarter (or, more accurately, last third) performance?
1. Communicate to staff why you want to change the level of current performance. Management needs to be forthright in identifying and communicating the performance gap that exists and pinpoint those areas or activities that need improvement. This may involve below-par sales of certain products, insufficient calling intensity, inadequate wallet penetration, or other areas.
2. Be directive in specifying what you want to sell and to whom. Rather than being too restrictive, bank management often allows its bankers too much freedom in deciding whom to call on and what and how to sell. That is one reason why banker performance varies so dramatically, particularly in the commercial banking segment.
Managements that wish to gear up quickly for the next few months should consider having a central marketing group select prospect names as well as contracting with an outside telemarketing firm to set up initial appointments.
Of course, the sales focus should begin with current customers, whether on the consumer or business side. Is there any bank customer to whom the bank cannot sell more products or services? Yet, oftentimes, bankers fail to diagnose opportunities within their current portfolios despite the fact that it offers the first and most likely place to look for more revenues.
3. Strengthen the sales management process; again, be more directive. To achieve any meaningful impact in a short period of time, a bank cannot have its various branches or bankers drifting off in different directions or operating with varied levels of focus or enthusiasm. Sales managers have really got to step up and set and enforce high standards of performance, in many cases higher standards that had previously been followed by the bank. Close monitoring of activity levels and success become mandatory to the success of an effort of this type.
4. Start with current customers as new business generators. Bankers often tout how well they are meeting the needs of current customers. Nonetheless, relatively few ask their customers for introductions to prospective clients. Our research shows that the most successful bank salespersons rely on referrals from current customers and centers of influence for their new business. Short-term sales push demands that the banker avoid the hit and miss nature of cold calling; they need to short circuit the marketing process. Strong introductions from satisfied current customers cut down on the time required to convert prospects to customers.
5. Adjust incentives to encourage a near-term sales focus. Typically, management would prefer to leave short-term incentives alone and introduce any compensation changes at the beginning of the next year. That will probably not work. Bankers need to know that their heightened efforts will pay off in the near term. In particular, those whose performance has placed them out of the running for a significant bonus should see this end-of-year effort as a highly attractive opportunity for them.
In addition, to encourage cross-bank selling, management should demonstrate a willingness to alter its compensation philosophy, for example, allowing the double counting of revenues or shadow accounting. If you want an external focus, the leaders need to remove as much of the “friction” as possible. Aligning compensation with goals has a high priority.
6. Communicate weekly. We have seen some sales managers check in with their staffs on a daily basis: “What did you do today? How many calls? What is the follow-up? When can we expect to see some closings?” That level of intensity and close monitoring provides the focus and energy that can make fourth quarter performance dramatically better and set the stage for a much-improved 2007, as well.
7. Share internal and external best practices. Our industry focus and client experience have provided us with extraordinary insights into industry best practices in areas related to strategy, product development, sales, risk management, and segmentation, among many other areas. Understanding and assessing competitive best practices provides our clients with the opportunity to leverage the approaches that the best players in the industry use to succeed. However, highlighting internal best practices may be even more important and relevant for an end-of-year focus.
At every client bank, some extraordinary performers exist, whether in the branch, commercial banking, or wealth management. Looking at the factors that define their success and establishing them as mentors and, in effect, sales developers to others within the bank is a natural way to celebrate their capabilities and leverage their performance. Unfortunately, few banks take advantage of their best performers in this way. The simple questions are: Why do some sales staff outperform others? What elements that create these persons’ success can others adopt?
Final Comments
For this type of effort to succeed,senior management needs to demonstrate leadership and clear direction to its employees. They should demand discipline and consistency in approach across the bank while challenging themselves concerning the way they have traditionally pursued business.
And, ultimately, the focus of this effort is not simply on the fourth quarter. Rather, the greater and longer-term benefit to a bank rests on exploiting the bank’s desire to improve fourth quarter performance in order to change its fundamental approach and sales culture.