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Kenneth Cline Sep 20, 2011

Combining Sales and Service on the Frontlines

As banks struggle in today’s environment of reduced fee income and weak loan demand, financial institutions need to figure out a way to sell more products to their existing customers. Shifting branch staff away from their transaction functions to more of a sales role is commonly seen as one tactic for accomplishing that.

Been there, done that, says Oregon’s Umpqua Bank, which is unusual in the industry for its use of “universal associates,” or branch employees who are trained to handle both service and sales at the same time. As Executive Vice President and Chief Information OfficerColin Eccles put it, “We don’t spend a lot of time talking about how to deal with transactions versus sales; as far as we’re concerned, it’s one experience.”

Eccles will elaborate on Umpqua’s branch sales strategy in detail next month while participating on a panel discussion at this year’s BAI Retail Delivery on the topic of “The New Sales Model and Staffing Paradigm for Branch Sales.” He offered up the following highlights prior to the event:

Q: Your panel discussion at BAI Retail Delivery will focus, in part, on shifting branch frontline personnel from transactions to more of a sales role. How do you handle that issue at Umpqua?

Eccles: Umpqua’s entire strategy and approach is focused on integrating sales and service in order to build relationships with our customers that go far beyond the transactional. As a result, we refer to our employees as “associates” and within our stores we have universal associates, who can handle both transactions and sales. So, any customer coming into our store can go to any associate in the store and have their transaction needs taken care of. These employees can handle any aspects of service that the customer is looking for, whether it’s opening a new account, cross-selling or making referrals, such as bringing in mortgage or investment experts.

In other more traditional banks, you’ll walk up to the teller row for your transactions and those employees may ask if you’re interested in other products and services, based on what they know about you. But then they send you back to the customer service representative who handles those issues. Our people are trained and empowered to do all of the above, so it’s really mixing the transactional side with the selling side into a single experience.

Q: Do you at Umpqua feel that you’ve basically solved the transaction versus sales issue?

Eccles: We don’t spend a lot of time talking about how to deal with transactions versus sales; as far as we’re concerned, it’s one experience.

We lead with service first and foremost. We see the transaction side as the opportunity to really get to know our customers. So, for us, it’s all about building that customer relationship – understanding the customer’s transactional needs but building that relationship and cross-selling at the same time.

Q: Is the bank generally happy with the level of sales that it gets out of this model?

Eccles: We do incent associates to increase the cross-sell ratio. But, I think we’re happy with the fact that asking them to handle transactions does not take away from the sales opportunity. We want to know our customers and provide them with the best service, whether that involves transactions or sales. And the numbers demonstrate the success of this approach – we consistently outperform our peers in cross-sell and retention.

Q: Do you think that the issue of branch sales has more urgency today in the slower economy?

Eccles: The preferred choice for most consumers is still the store. Bankers do have to think more about sales and how to increase their cross-sell ratios. The more products and services the customer has with you and the happier they are with you, the stickier they are. You definitely want the total relationship. So, you want to track your cross-selling.

Every banker is thinking that way – what can they do to sell more? However, it’s equally important to remember that in order for them to stay with you, you need to make your customers happy – and banks also need to have a strategy to do that, too.

Q: Why do you think other banks resist the idea of putting universal associates in the branch?

Eccles: Typically because of cost, entitlement issues and the need for specialization. I came here from the former Washington Mutual Inc., where we had both tellers and sales reps. Having universal associates instead does introduce complexities. There’s a lot more training involved, for example, because the associate needs to know both the teller system and the account origination system.

However, I think the benefits that come from that are significant enough to justify the additional training. It provides a better experience for the customer and you have smart associates who are building a career not just doing a job. As transactions start to decrease in bank branches, banks will need to look at another model, one where bank associates are able to discuss and advise on more complex financial questions. At Umpqua, we’re already in that mode.

Q: What do you do in terms of your branch design or layout to promote or to enhance sales?

Eccles: First of all, we’ve designed our branches as stores. We believe that if you’re selling bank products and services, you need to make it a retail experience and put the products out on display so people can see and touch them.

We also knew back in 1995, when we built our first prototype store, we had to give people a reason to come in beyond banking. So, our stores are designed as community hubs. They’re open, invitating places where customers and others are invited in to enjoy a cup of our coffee, read the newspaper, watch the news, surf the Internet, learn about their community – and how Umpqua is giving back in that community – and perhaps bank.

But the environment is only half the equation; you can’t make this kind of change if you don’t pay attention to how you operate and that comes back to your culture. At Umpqua, we focused on delivering at an extremely high level of service. Universal associates are not only trained on all products and services, but by the Ritz Carlton. Together, Umpqua’s store environment and operating approach create a culture of service that results in meaningful relationships with our customers that inspire loyalty, and, as a result, sales.

Mr. Cline is managing editor of BAI Banking Strategies. He can be reached at kcline@bai.org.

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