The traditional branch sales model was based on cross-selling to customers who used the branch for transactions. In a typical scenario, a customer comes in to deposit a check or make a payment on a loan and the teller points them to a ready personal banker who might cross-sell a money market account or a home equity line of credit.
But transaction activity is moving out of the branches – fast. Between the ready availability of direct deposit, online and mobile banking, remote deposit capture and advanced function ATMs, many customers are finding that they hardly need to enter a branch at all. Check transaction activity has been declining an average of 7.1% per year and 39% of consumers expect to decrease the number of checks they write, according to the 2010 Federal Reserve Payments Study. Consumers still use branches – according to slide 25 of JPMorgan Chase & Co.’s 2012 Investor Day presentation, branch preference remains strong across all wealth segments. But declines in check transactions means that consumers – the primary source of branch traffic – have fewer checks to deposit or cash at the teller line.
Since most banks built their staffing models to support transaction handling, reduced traffic means cuts in branch staff. Managers are finding they must do more with less in order to grow sales in this difficult environment. Where to start?
The first and most obvious opportunity is to better serve the customers who do enter your branch. Unfortunately, most banks do a poor job of capturing overall customer potential, as we recently discovered by monitoring and measuring the sales process at over 1,000 branches. Our research revealed that 65% of sales interactions involved the prospective customer sitting through a monologue of simple checking account features. In 79% of those occasions, the sales person did not ask questions or gauge the customer’s interest in products outside of a demand deposit account (DDA). When a banker did ask about non-DDA products, 92% of the time the inquiry came because the banker was completing a profile of the customer.
These are lost opportunities that bankers can ill afford. So, what can bankers do to coach their branch sales teams to greater success?
Build the right team. Successful managers recognize that the cornerstone to performance is developing the right team. Simply put, not everyone has a high aptitude for financial services sales. We believe that standardized strengths-based assessment profiles are a valuable tool to improve the effectiveness of the recruiting process, and to target focused skills training for existing teams. As with any scoring tool, these widely used measurement techniques constitute just one piece of the puzzle. But without them, managers can be handicapped in their hiring and team development process.
Create the right sales process. Banks that train employees in a well-defined sales interaction, with a narrow scope of variability around the process, typically do a much better job at both discovering and meeting the needs of their customers and building loyalty and relationship “stickiness.” If the process discipline is not there, branch employees will fill in the gaps with their own language and goals, which can lack consistency, impair the sale, and significantly reduce effectiveness.
Use relationship profiles to unlock customer needs. Encouraging a customer to complete a relationship profile is the only way to consistently guaranty that employees are moving the discussion beyond the basic DDA. As noted above, our surveys and branch shops revealed that when branch staff probed for relationship needs, it was almost always because they were using a profile to assist them with the process.
Coach for success. While the ultimate result is sales success, managers need to maintain process discipline by regularly reviewing required activities on a daily, weekly, and monthly basis. Banks must consider whether their goal setting, process metrics, and financial measures are well focused and in line with industry benchmarks, or whether they need tweaking to provide their expected results.
The typical branch only sells about one new product per personal banker per day. With transaction traffic declining and continued pressure on staffing, it is critical that branch managers establish and maintain disciplined sales and service processes. Cross-selling is the key to creating deep, profitable and long lasting banking relationships. Having a well-defined sales process will give branch staff the tools and discipline to be successful and deliver the service consistency that customers expect.