THE DISCIPLINED SALES PROCESS

THE DISCIPLINED SALES MODEL: THE WAY TO WIN LOCAL MARKETS

What do you need to do to meet the challenges you face every day in your marketplace, such as price crazies, market crazies, kamikaze pricing etc.? You need to ark your employees with the right tools and weapons to go out there, make war, and win. Sending them unarmed to battle will not get the job done. Those banks that effectively integrate the sales process into their local delivery will become invincible players. The combination of local delivery, centralized production, high efficiency and a fully integrated sales process is so powerful that it should prove to he the winning formula against mega-banks, market crazies and category killers.

One of the key challenges facing banks today is how to optimize their share of the customers' wallet in local markets, thereby increasing the profitability of even very small branches by turning them into sales operations. This is a tough challenge, especially since we continue to hire bankers not to be effective sales people but effective order takers and operations specialists. Some banks that started looking for true sales people have u-turned as the regulatory burden (can you spell BSA) intensified in recent years.

Some of our bankers are natural sales talents, yet even those are repressed by capped incentive programs, high compliance expectations and, sometimes, the willingness to sell without the competence to do so. All of us have personal bankers eager to do battle yet without the weapons to win or, if they have the weapons, not enough knowledge as to how to use them.

The challenge to local market execution is building a sales discipline (not just a culture) that is action and results driven and that will expect and cause behavior change. Analytics have their place, but they are not enough. You can get the best market segmentation gong and target every single customer that offers you the most potential, but if your people don't know how to attract those customers, offer them the right service level and profile their needs to optimize the relationship, that information will go to waste.

2007 is expected to be a tough year. Many are expecting eroding profits, mounting credit issues and continued margin pressures. Many respond to this challenge by reducing costs and resources. Effective sales discipline doesn't call for more resources, but rather for the redirection of resource activities. The same people need to produce more sales. As you face the challenge, beware of the downward "flogging" spiral, when a manager flogs their depleted staff to improve sales and service, putting more pressure on the people to perform. Even our best people cannot perform in an environment where greater workload is imposed on fewer people continuously. Resignations, medical leaves and stress increase and productivity decreases.

The way to stop the spiral is to install a clear to-do list, a set of behaviors and actions that will show our bankers the way to improve share of wallet, our ultimate objective. We can assure them that, if they follow the prescription, they will get the job done. Further, we need to remove impediments, especially administrative processes, and recognize that our people need to spend their time selling, not administering.

Most branch managers spend 80% pf their time in their office, administering. Is this really what we want them to do? At Sears, for example, studies revealed that their sales management and staff were too busy doing reports, which got in the way of sales results. The right approach is that sales are non-negotiable, and if some things fall through the cracks, so long as they are not regulatory compliance or control related, so be it. Freeing your people to do what they are really supposed to do, i.e. service and sell customers, is one of management's key jobs. How do you get the job done?

1. Develop local goals and accountability. Expecting your people do incrementally improve performance might not be the best way to achieve sales results or job satisfaction. A 10% improvement will not enhance local market management; it ignores local market potential. In some markets, growing 5% a year is mission impossible. In others, it's a cakewalk. Therefore, local market goals enhance success, since they air at optimizing each market's condition and opportunity. Have each branch or market manager develop their own goals based upon true, quantifiable market potential. Give them one more guideline: low-balling doesn't work. If you achieve 150% of goal, perhaps you set your goals too low. If you reach 95% of a stretch goal, that's OK. You will be surprised when you allow people in each market to tell you what they can do to win in their local market and fully capitalize upon their position. Across-the-board targets squelch the entrepreneurial spirit and show your market managers that you don't practice what you preach.

2. Give your team the prescription. Many bank employees are eager to succeed; they just don't know how. Even natural-born salespeople need some guidance. The first step to success is shortening the time frame in which you measure performance. Daily assessments at the branch level are appropriate and necessary. Once local market goals are established for the year, they need to be translated into daily goals for each employee.

3. Institute active sales management. In every line of business - banking products, consumer loans, mortgages, investment product sales etc. - the sales manager (or the branch manager) needs to monitor, recognize and support daily individual performance relative to goal. The role of the branch manager must be defined as sales manager and coach, providing advice and guidance to sales staff, not an administrator. Many branch managers do not have the experience to manage sales; that's where regional and executive management comes in, filling in the gaps to assure sales discipline and culture.

4. "Everyone has a customer". M&I Bank has been known for requiring every bank employee, including executive management, to make a certain number of customer calls. This is good discipline. No one at your institution should ever forget that without the customer there will be no bank, something which so many of us forget too often. Many think in their heart of hearts, "Life would be so nice if it weren't for those pesky customers&". True sales culture means that the bank is geared toward the line, where the customer is number one, and the people closest to the customer get help in taking best possible care of that customer. Everyone's job is to facilitate, not to build impediments, by making the customer contact staff's life as easy as possible so they can focus all their energy on the customer and their needs.

Several key ingredients come to mind as I consider a disciplined sales culture:

• Clear performance-based accountability at all levels.
• Minimum performance standards. If people don't deliver, they need to move to a different position. You can't afford to have front line people who don't build customer relationships.
• Multilevel participation. Accountability at each level of the sales management process generates teamwork and shared responsibilities. Everyone from the president down should have clear accountabilities to provide daily feedback and insights on individual and team results.
• True behavior change. Time-based accountabilities generate immediate visibility of managers' and sales people's performance. Stars rise to the top immediately. Providing specific behavior expectations, such as number of calls to prospects, number of appointments etc., will give you the results you need because there is an immediate and causal relationship between activity and results. There is nothing random about sales. Sales are activity-based. If you reach 10 people you're likely to get one sale. If you reach 20, you'll get two.
• Keep it simple. Intricate sales processes are too overwhelming and create too many opportunities for excuses and non-performance.

Like Nike said: JUST DO IT!