Pat’s Blog

“In an ecology, the ‘whole” has to be seen and understood and the ‘parts’ exist only in contemplation of the whole.” — Peter Drucker

When traveling for my consulting business, too often, I see financial firms still using the standard measurement of volume and units to evaluate results. This approach may have been fine 20 years ago, but it is not effective now. Volume and units are short-term measurements which is like looking at a daily stock price of a company which doesn’t really tell you the company’s value and long-term prospects.
Granted, volume and units are easy to deal with but the truth is that calculating profitability is more involved than merely looking at volume. Any sales process approach should be rooted in data to provide the context, in which a sales force gets information, discusses problems, makes their decisions and takes action. Any data collection should be anchored on understanding the parts of the process and how they interact. Parts of the process can be simplified into activities that the sales people perform and the decisions they make and the actions that the customer takes or declines to take.

“People determine the performance capacity of an organization. — Peter Drucker

Many large financial institutions invest untold millions advertising their company brands. While publicizing a company logo and tagline tells prospects something about your company, what really defines a brand for customers is the quality of their interaction with the sales person.

Every encounter a sales person has with a prospect or customer is an extension of your brand. The quality of this individual connection can make all the difference between having a transaction-based customer or one who is truly loyal to your company.

What is the quality of your sales staff saying about your company’s brand? Do you have the sales talent onboard to create customers for life?

“What matters in any system is the performance of the whole.” — Peter Drucker

Every financial firm wants to improve sales but not every company has the necessary components in place to do so. In my experience, there are three fundamental elements needed for better sales results.

First, sales professionals must possess good character. Customers want to do business with people and companies who are credible and trustworthy.

Second, sales professionals must be knowledgeable about products and have consultative selling talent. Customers are more informed than ever and demand sales professionals who are not only well-versed but can make the process enjoyable.

Finally, sales professionals need good managers to help them reach the next level of success. Ongoing improvement requires the individual to receive coaching and feedback which is the primary role of the manager.

Does your company have all three components in place? If not, which area needs improvement?

“The spirit of an organization is created from the top.” — Peter Drucker

In the past few weeks, I have visited some large mortgage banking firms and it strikes me how many senior management teams have lost their enthusiasm for the business. While it is understandable that the industry has been in a major correction that is going on its third year, it does make me wonder: If the executives are less than enthusiastic, how do their employees feel and act when dealing with customers?

It is important to remember that everything a manager does or says makes an impression on the sales team — for better or worse. What kind of message are you sending to your team?

Have a Happy Valentine’s Day!

“Continuous improvements in any area eventually transform the operation.” — Peter Drucker

Let’s face it. No matter how well you run your sales organization, sometimes problems seem to come out of the blue: Your top producer decides to quit or retire, the market dips, underwriting standards change and the list goes on. When problems arise, it is important to look at how they get identified, analyzed and resolved. All too often, it seems that managers don’t know what the real cause is and as a result, they choose one of the usual fixes. You’ve heard these before: “Let’s change the compensation plan, let’s have a contest,” and my personal favorite, “Let’s hire some super producers from the competitors.” Regardless of the problem, what works is having a systematic approach to improvement. This requires management to define sales activities and the corresponding results. Problems can then be more easily identified — and corrected — when they are tied to specific activities.

“The proof of the sincerity and seriousness of management is uncompromising emphasis on integrity of character.” — Peter Drucker

Everyone knows high integrity is essential for success in financial services but few companies have practices and processes in place to ensure they’re hiring quality sales professionals. Sure, most firms use background checks and the majority of managers feel they are good judges of character but it isn’t enough to answer important questions such as:

• Will the salesperson take shortcuts in processing?
• Will the salesperson be a team player?
• Will the salesperson operate on the edge of proper policy?

The right integrity assessment can help hiring managers identify candidates with a high risk of counterproductive behaviors. Before your next hire, ask “How well do I really know this person?” The answer may be different than what you originally thought.

“No organization can do better than the people it has.” — Peter Drucker

According to the just-released 17th Annual Bank Executive Survey conducted by Grant Thornton LLP, 82% of those surveyed said the number of people their bank employs will either increase or stay the same in the next six months. While this may be an encouraging sign of stability in the short-term, it also raises a more universal issue: What is the quality of the sales professionals who will be coming onboard?

In any business, the people who work for you are your greatest asset. In financial services, the quality of the sales staff can make or break the organization. Future sales and referrals all rest on the sales person’s ability to forge a relationship with the customer and solve the customer’s problems.

What are your hiring plans for the next six months? What steps will you take to ensure that you are hiring the best quality sales professional for the position?

“The customer is the foundation of a business and keeps it in existence.” — Peter Drucker

Surveys and ratings in our industry may come and go but none are more powerful than those coming directly from the customer. In the just-released J.D. Power customer satisfaction survey for 2009, it is no coincidence that the top-rated companies also performed better financially than lower-ranked firms.

In addition to current business, customer satisfaction levels also have a significant impact on future and referral business. The report found that among customers with high satisfaction levels:

• 58% said they “definitely will” recommend their lender compared to only 8% of those with low satisfaction
• 60% said they “definitely will” recommend their lender when they refinance compared to only 13% of those with lower satisfaction rates
• They are more likely to use other products and services from their lender

According to the report, the quality of the relationship between the customer and the salesperson was one of the biggest drivers of customer satisfaction. Financial firms that focus on hiring the best sales professionals will go a long way to establish a strong foundation for excellent customer service and better sales results.

Read a press release about the J.D Power survey results.

“Find out what needs your customers want fulfilled today. Then determine how well you are meeting those needs.” — Peter Drucker

The annual J.D. Power customer satisfaction survey results are in and as usual, there are important insights to be derived from firms in the top positions. The Number 1 rated company in the study said, “Our goal is the perfect client experience, which means the company is reliable, responsive and empathetic to the customer.”

It is no coincidence that these are the same innate characteristics shared by top sales professionals and that this particular company has honed its hiring process to assemble a superior sales team.

Financial firms that want to improve their customer satisfaction levels need to first examine whether they are hiring quality sales professionals to create an unsurpassed customer experience.

View J.D. Power survey results for more details.

“All organizations need a discipline that makes them face up to reality.” — Peter Drucker

In my experience, companies attempt to correct sales problems by either adding more salespeople, training the sales staff or demanding better leads from marketing. While these solutions work at times, just as often they will not be successful because the problems may have different root causes.

A more effective strategy is to first, understand the company or team’s sales process and the activities that underlie it and second, view the situation quantitatively which involves having measurements. Herein lies the problem: Many sales organizations do not have any measurements except for the basics or more worrisome, they do not know the sales metrics that drive their sales results.

How do you measure your sales team’s progress? Do you have metrics in place to monitor important sales activities such as lead generation and prospecting?