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A Sales Culture Is Not The Answer

Why are banks and credit unions obsessed with "instilling a sales culture?" — that's the last thing they need. Here's why.

SalesCultureWhat is it with banks’ and (in particular) credit unions’ obsessions with developing, or instilling, a sales culture?

Every so often, I run across articles that purport to teach bank and credit union execs  how to create a sales culture in their organization. Interestingly, the articles always presume that the reasons why an FI should have a sales culture is understood and accepted.

My take: You don’t need a sales culture. Why not?

1) It will take more time and money than you have. Are you so delusional to believe that, after a few training sessions, your employees will magically become, not just good sales people, but sales-driven? Are you so delusional to believe that you can turn a 50-something year-old person into something he or she is not and doesn’t want to be?

If you’re committed to instilling a sales culture in your organization, the process will take years as you will need–not might need, but will need–to replace much of your staff. You’re going to have to come to grips with the fact that Betty and Sally who have been with your organization for 30 years now (and who are known and loved by many of the members) are simply never going to adopt nor endorse a sales culture.

But you want a sales culture, so feel free to let them go. And replace them with young, hungry, sales-driven go-getters. There’s just one little problem: You can’t afford them. If they’re that good, they’ll want more or they’re out.

Are there great salespeople out there who will be willing to work for your credit union because they’re committed to your mission and helping your members? Yes. But as I’m sure you already know, good luck finding them in Podunk where your credit union is headquartered (that is not a negative commentary about Podunks–I love Podunks).

The reality is that you can’t afford to change the culture of your organization from what it is today to a sales culture. And even if you had the money, you don’t have the time. The board wants results this year. Actually, you want results this year. They–and you–are likely to conclude that the  investment required to change the culture is better spent elsewhere.

2) It requires a shift in strategy. If I were to ask 100 credit union CEOs what their firm’s competitive advantage is, I bet seventy would say “our people” and 29 would say “superior service.” Those are really not different answers, the different terminology has its nuances.

What the 70% are saying is “our people is our greatest advantage…but we need to change the skills and attitudes of our people.” Yeah, that’s consistent. Not.

To the 29%, I would ask “If your competitive advantage is superior service–which I would guess means you have a ‘service culture’–why wouldyou want to change that?”

The inconsistencies here are lethal. Feel free to disagree with me on this next point, but after 30 years of consulting to companies, I’ve concluded that the greatest competitive advantage a company can have is alignment: Organizations moving forward in lockstep and towards an understood and agreed-upon goal and destination have an advantage over those who might have a better plan on paper but can’t execute on it.

So, to the 99% of credit unions out there, instilling a sales culture is really saying “we’re changing our strategy”–without a clear articulation of what that strategy is. The result: Misalignment. Have fun with that.

One of my favorite quotes about sales cultures comes from Gene Blishen, CEO of Mt. Lehman Credit Union, who commented on Filene Research’s website:

“Larger credit unions have moved to a sales culture. The staff needs to make the sales benchmarks set by management. The culture of service, though voiced admirably, is mostly just lip service. You can’t have both. I remember asking a retiring CEO if he could do anything over again, what would it be. He said he would never have introduced a sales culture, it destroyed his CU.”

Strategy isn’t just about what you sell–it also encompasses how you sell and how you deliver what you sell. Changing the “how you sell” part–by instilling a sales culture–is a huge strategic change. If you really need to do this, you need to come to the realization that your current strategy isn’t working. Which means the competitive advantage afforded you by your “people” or your “superior service” isn’t really that good.

3) It’s out of step with trends in consumer behavior. Branch visits are declining. Maybe that’s because of a drop in service-related transactions. But, it’s also due to a decline in sales-related interactions. For 20 years now, consumers have increasingly researched their financial product decisions, a behavior that is both caused by, and enabled by, technology.

Yes, many still come into the branch to apply for products, and open accounts. But that doesn’t mean they were sold in the branch.

If you want to improve the sales competency of your organization, you have to make a decision: How much do we invest in improving how well our people sell, and how much do we invest in improving how well we sell through digital channels?

If you allocate the lion’s share of your investment to the former, I hope you know what you’re doing. If you realize that your investment is best spend skewed towards the latter, I hope you realize that “building a sales culture” probably does little to help you improve your digital marketing (and selling) capabilities.

***

Over the past few years, there has been a vocal group of management pundits who have put forth the notion that “customer service is the new marketing.” (I don’t really need to find you examples, do I?)

If they were right, you wouldn’t need a sales culture, would you? Your “superior service” and your “people” would be good enough. But, as I have argued a number of times (here and here), those pundits are wrong. Customer service is not the new marketing.

***

At this point, you might be thinking that I’m missing the point of a sales culture. As the author of a Credit Union Magazine article put it:

“Having a sales culture is consistent with the mantra of ‘people helping people.’ A positive and productive sales culture reinforces employees’ duty to help members with all their financial needs, not just the ones they ask about.”

If you believe this, you’re misunderstanding consumers’ financial service behaviors and attitudes.

I don’t expect my endocrinologist to help me with all my medical needs. I expect him to help me with my thyroid problem. In turn–and I’m sorry for you that this is the way it is–many of your members don’t want, let alone expect, you to help them with “all their financial needs.” In a consumer survey I conducted in 2013, just half of credit union members listed their credit union as their primary financial institution.

The big question here is this: What can you do to become their primary financial institution (which, I’m implying, would make your members more amenable to your serving all, or at least more, of their financial needs)? Is it improving your sales ability, or improving your product set and service delivery capabilities?

If you believe it’s the former, then fine, go out and build that sales culture. My money is on improving the products and service delivery.

***

Bottom line: The bottom line is that you need to generate more revenue–i.e., sell more of your products and services. And you’re thinking that if you develop a culture of sales, that will lead to more sales and more revenue.

But there is an alternative: Build better digital marketing capabilities.

It’s going to be a helluva lot easier to change your website than change your people. You might think that the digital investments will be big–and they will be–but I’m betting they won’t be as big as the investments you’ll have to make in changing your staff and changing your strategy.


Ron ShevlinRon Shevlin is Director of Research at Cornerstone Advisors. Check out Ron's book, Smarter Bank.. According to Brett King, “Ron is famous for his snarky sense of humor, and his well-researched, well-considered takes on banking and customer behavior. If you are in banking, you should read it — you will come away smarter and better informed." New! The Kindle version is here!

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Comments

  1. Ron… I have been able to draw correlation between the ways banks and credit unions position themselves right along side that of commoditized “full service” advertising agencies.

    You noted that about 70% of CE0s would say “our people” and 29 would say “superior service” is what makes their bank/CU different. I concur as this is a standard question we ask in our assessment process and I also ask during speaking engagements: what makes your bank or credit union different that everyone else?

    Thousands have answered “our great rates” and “our amazing service”.

    This is no different than the positioning of “full service” advertising agencies, working in multiple verticals, doing everything from branding to creative to digital, while touting their “people” and “creative abilities” is what makes them different from everyone else. My take: That’s BS.

    I also agree with you that sales and service training is out of step with changing consumer behavior.

    As Google has reported with their Zero Moment of Truth research, the average consumer takes more than 30 days when shopping to open an account. And during that time they use more than 8 resources during the buying process with the majority of them coming from the digital space.

    My take: If you want to build a sales and service culture… go ahead… but did it with a focus on digital sales and service. But to do this banks and CUs would be better off looking for inspiration outside of the industry for companies who have built a sales and service culture on digital.

    Zappos comes to mind and they have inspired another bank with their digital sales and service model.

    http://mashable.com/2010/07/30/banksimple/
    https://www.simple.com/support

  2. David Kreiman says:

    Two words – thank you!

  3. Ron,

    Thanks for sharing your thoughts about sales culture. It is certainly an overused crutch at many credit unions and banks. In fact, most service and sales training is pretty lame (use the person’s name, smile, offer a product they don’t have). Duh. Rather than offering some generic sales and service training program, credit unions and banks are better off developing a customized training effort around their brand.

    Mark

  4. I have no argument with your point that credit unions need to get better at digital marketing and sales. There’s no doubt about that. Many do not provide their websites and mobile services the reverence they deserve. At the same time, that does not mean that you do not work to develop the staff. Sales is about listening to what someone is saying and determining whether the credit union can provide a solution. When someone is enthusiastic about their role in the credit unions’ success, like when the credit union invests in them, they’ll genuinely and enthusiastically talk about how the credit union can help a members’ particular need. A sales culture will/should not turn credit union front line staff into used car salespeople.

  5. Sarah: I’m not arguing against providing sales training. I’m arguing against the need to have a sales “culture”. You (and others) may think I’m mincing words, but I don’t.

    A firm’s culture sets the norms and guides behaviors. A sales culture is different from a service (or other kind of) culture, and I don’t believe you can (successfully and peacefully) have two cultures at the same time.

    You can say that “sales is about listening to what someone is saying and determining whether the credit union can provide a solution” but I bet that at your publication sales people are NOT paid “to listen and determine” but are paid to SELL. I would certainly agree that a customer who is listened to and gets what they need is likely to be more satisfied than customers who don’t, but salespeople get paid to bring in the money.

    Have a sales culture, or being sales driven, is not the same as being seen as used car salespeople.

  6. Gene Blishen says:

    Always enjoy your take Ron. “Culture” seems to be the expanding concept that we attach our predefined stamps for some quick and easy solutions. Culture in a business sense has a vast number of dimensions that need time, sometimes-long term, to understand, nurture and embody.

    From a cooperative standpoint I believe we work from a “needs” culture. We ascertain the need and subscribe the appropriate product or service. It can evolve in understanding and attempting to fulfill “wants” of the members at times. We also live in a business that has been commoditized to a large extent, which does change our strategies whether they are needs, wants, sales or whatever.

    There are huge opportunities to establish unique cultures that include objectives that revolve around sales goals. But the underlying reason for the growth, the results that the growth model gives and the reasons to develop better products and services can most easily be understood from a viable cooperative culture.

  7. Ron, if the client/member isn’t satisfied with what they received they aren’t coming back. Only a short-sighted sales person would just SELL. Believe me, we’ve run into that issue in the past. Our sales team has been trained, quizzed, tested, and role played to diagnose and find a solution that fits. If the overall culture of the credit union is to serve for the good of the member/client, then sales is a part of that culture.

  8. Sarah: I’m losing sight of why you’re arguing with ME. Shouldn’t your argument be with the countless number of CUs who seem to think that instilling a “sales culture” will fix their problems and generate oodles of revenue?

    p.s. There is no shortage of short-sighted salespeople out there, btw. I know you know that.

  9. I love to be helped… I hate to be sold. I think most folks feel the same way. Sales culture doesn’t fit with our members or our long-term staff. Who’s setting those sales goals anyway? Management; who benefit with a bonus? Where’s the member-service part of that? Misalignment indeed!

  10. Jeff Warren says:

    Finally, someone has the courage to speak the truth! The number of organizations, both banks and CU’s, who say they’ve moved or are moving to a sales culture is staggering. The number who actually deliver financial performance above their peers is dismal at best. And, in spite of the move to a ‘sales culture’. Does anyone else see the disconnect here?

  11. Ron,

    Great piece, Ron! Your point about sales cultures is bang-on in my experience. When I probe bank and credit union executives to explain what they mean when they say either, “we implemented a sales culture” or, more commonly, “we’re implementing a sales culture,” they make three points: We launched a cash incentive system, we established “sales goals,” and we are working to build accountability for those reaching those goals. These measures are almost always works in progress and no one in my experience reports satisfaction with their “sales culture.”
    The reasons for the failure of “sales culture implementation” are numerous and you cover them very well. (We should ask, “Can we implement culture at all?”)
    Community and regional FI brands have become increasingly high-minded. Serving your best interests…taking a long-term view to your financial success…our community’s financial health, etc. These can be compelling public promises, but they don’t survive a “sales experience.”
    Today, consumers are begging for authentic, honest and transparent financial services. And virtually all FI’s promise to deliver the same. Few even make a effort to demonstrate what these promises mean! And consumers are not fooled. Applying traditional sales training to community and regional FI brands is a recipe for disaster and even digital channels will not save us.

  12. Your comment that “strategy isn’t just about what you sell — it also encompasses how you sell and how you deliver what you sell” reminded me of my experience many moons ago when I attempted to sell warehouse pallets to purchasing agents. I talked and talked and talked them into buying my product and then kept right on talking and talked them back out of buying. I was probably the world’s worst pallet salesman.

    I moved from there to selling books for one of what are now the Big Five publishers, and I was a great book salesperson. It was all about working in a different culture. You say, “I bet that…your…sales people are NOT paid to ‘listen and determine’ but are paid to SELL.” Why can’t you do both?

    I didn’t listen at all when talking to purchasing departments; all I did was talk. With books, though, I learned to listen — a lot. I actually had conversations with book buyers about books, authors, and the publishing industry — long conversations. And it paid off. My sales in Ohio, Indiana, and Kentucky, states not generally known as big book markets, were second only to those in Manhattan, the country’s largest book market.

  13. Jim: Thanks for commenting. To your question…you CAN do both (and I’m sure the right answer is that you SHOULD do both).

    But from the perspective of your employer…who is paying you your salary and commissions….they’re paying for RESULTS. They’re paying for the SALE.

    You might find that listening is key to making the sale. But employers aren’t paying for the “listen” — they’re paying for the “sale.”

    Sorry for mincing words here — but the differences between the verbs and the nouns are importannt here.

  14. I wholeheartedly agree with your contention, Ron, that sales cultures are not the answer. We see many symptoms of just how broken these “sales cultures” are, e.g. a monthly product focus, call nights to pitch loans, onboarding calls that repel customers, over incentivizing etc. One retail exec at a client told me, “I knew we were incenting the wrong behaviors when an FSR resented helping a member with a problem because she knew she couldn’t make a sale.” Ironically, we recently wrote a blog post on what we feel is wrong with sales cultures, Do You Have A Broken Sales Culture?

    I’m not against selling – selling will never go away. Banks and credit unions simply need to redefine how they sell and how they generate revenue. I feel the emphasis is misplaced with conventional selling techniques that focus on short term transactional selling and cross sell goals that turn off staff, customers and members.

    Instead of trying to build a sales culture, we believe financial institutions can generate more revenue by making these priorities: building trust, investing in relationship building and re-engaging with customers who no longer visit branches. That includes monitoring and rewarding key activities and behaviors, not just month-end results.

    Many bankers still don’t like to sell but they do like to serve and once a trusting relationship is established, customers and members are more apt to think of you when a need arises. Staff will still will find a need and fill it, but the difference is the relationship is more conducive to selling. The good news is we believe the tide is slowly changing in a positive direction away from sales cultures to relationship cultures. I know this is a long response but I feel strongly about this topic.

  15. Thanks, Barbara. To reiterate my position on this, I’m not against “selling” — I’m against trying to instill a sales culture. What many FIs need (both banks and credit unions) is better-defined sales process. Not just sales training, but a process. A competency selling. It won’t require or produce a “used car salesman” mentality.

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