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