Four more risky sales practices: Accent on accident avoidance
In the sales enablement world, leaders are learning a new language—the language of risk. Part two of this series discusses four more ways that sales enablement practices expose companies to unwanted dangers. To read the first four ways covered in part one, click here.
Five: Easy ethics
The expectations that well-trained bank associates will employ strong ethics can run high—so high that monitoring on the matter can fall short. Left to its own devices, unethical behavior can break out with a contagious, rapid spread.
Let’s define unethical behavior like this: breaking a rule for one’s own benefit. It doesn’t have to be as egregious as pocketing bills from the till or setting up your own loan under a customer’s name. More often it involves breaking rules in ways the rule-breaker perceives as benign. But every time this occurs, it means risk.
Consider this example: An elderly acquaintance opened a new DDA (demand deposit account) and was pressed to apply for a new credit card. After declining repeatedly, she finally gave in. No doubt the aggressive new accounts associate saw no real harm in hitting his goal by signing up a customer for an unwanted card. But later, the customer realized this could expose her to credit card fraud and negatively impact on her credit score. How could that not damage her trust in the associate—or make her feel that the associate prioritized his financial situation over hers?
Or a good customer might call in asking to send a wire transfer because he can’t come in and sign for it. So the associate, not wanting to refuse a good customer, executes the transaction—and later learns that the customer was under duress and did not want that wire sent.
Sometimes people break rules because they are too hard to follow; getting multiple signatures, for example, can take too long for the customer’s satisfaction. Sometimes they simply don’t understand the rules, especially as regulations proliferate faster than one can absorb them.
Don’t let good sales results blind you to ethics-related risks. Hold people accountable but also assess the rules you ask them to follow:
- Do you need to make the rules easier to understand?
- Do you need to make them easier to follow so that people don’t feel pressured to cut corners?
- Are you training them on an approach that customers find dated or objectionable that forces associates to choose between the customer and the rule?
Six: Complicated incentive plans
Incentive plans were once simple and easy to understand (with payment based on units or dollars). That meant more sales but often due to aggressive product pushing. Today, plans are more often based on profit and loss, customer profitability, account usage, verified dollars and other complexities. That’s a positive trend.
Yet this also makes plans harder for salespeople to understand and thus connect with their specific behaviors. And what happens if they don’t understand? Then you don’t get the behaviors you want to incentivize. You don’t get the return from your incentive plan investment.
Start with a clear explanation of the sales plan—in everyday language, not actuarial jargon—and make it readily accessible in Sharepoint or your sales portal: a place where your team can view it at any time. Make sure it has an FAQ and recognizable scenarios, reports where they can track their own progress, and sources to contact ibn case of questions.
Ask your salespeople if they understand the payments they receive in their checks: how they earned that money. Take special care with partner plans; for example, merchant services may pay a salesperson for a closed deal by adding it to their check—but not disclose which partner paid the award or which referral facilitated the deal. They see a flat amount but don’t know how much came from loans or from reaching the top 10 percent.
The payment should come with a statement that shows how much came from where and the math behind it. That way, salespeople will repeat the behaviors that generated incentive dollars.
Seven: Unclear sales reporting
A banker acquaintance realized he needed better sales reporting after a tour of several markets. He was proudly told in each, “We are the number one market in sales.” Still, he recalled, “How was I supposed to create a sense of urgency when each team believed they were already the best? Clearly, I had to take a long look at the metrics we used to measure achievement.”
For example, do you track percentage of goal achieved as opposed to total production? If you have sales teams in hot growth markets such as Dallas or Charlotte, you probably provide them with extensive resources and naturally expect higher production versus teams in, say, Philadelphia or Cleveland. Lower production numbers in slow-growth cities should not add up to failure any more than higher production numbers in fast-growth areas should be viewed as proof of success. And every team needs to know they were tracked on goal-achieved percentage.
What you then do with those reports can make a big difference. For example, you can create reports that graphically illustrate performance accompanied with stories that explain how the high achievers did it, highlighting best practices other markets can follow.
Above all, make the rankings clear. If everybody thinks they are number one then who feels any urgency to improve? When that happens, all of your coaching and training are at risk.
Eight: Sales team turnover
If unmanaged, all the preceding risk areas can culminate in one that every sales enablement leader dreads: sales team turnover.
When people leave—no matter what they say—it’s often because one or more of the areas discussed above (and in part one) have left them discouraged or unmotivated:
- training that doesn’t prepare them well for the job
- sales technology they don’t know how to use
- burdensome processes that take them off task
- lax ethics
- inadequate information tools and systems
- incentive plans they don’t understand, or
- misleading sales reporting
When any combination of these risk factors culminates in excessive turnover, it creates a whole new host of complications. Here are just a few of the possible negative consequences:
- loss of institutional knowledge
- lack of seasoned mentors for new people
- discontinuity with customers
- time consumed by management’s replacement efforts
- diminished morale, and
- shrinking revenue while new salespeople come up to speed.
Great companies focus on retaining their sales people by removing turnover risk. Yet as much as turnover and the other seven ways we’ve covered can act as yellow flags of caution, they can also take on a green-flag perspective: that is, staying on the right side of ethics, training practices and more can point the way to profits, performance and peerless teamwork. Spoken proficiently, the language of risk can translate into handsome reward.
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Mark Renfro is a founder and managing partner of Waypoint Consulting Services, the Dallas-based firm active in the financial services, healthcare, and energy sectors. He can be reached at [email protected].