This post is part of Gallup's ongoing series on the shifting landscape for financial institutions. It provides insights into channel optimization, emerging customer behaviors and preferences, product penetration and relationship growth, engaging the most critical affluent and business customers, and reshaping banks' overall value proposition.
Sales incentives are "easy"-- meet your goal, get your payout. But when you delve into how most banks incentivize on sales, red flags often appear in the nuances of these programs that cause misalignment between the desired behaviors and the desired outcomes.
Your Sales Contests Are Short Term, But Your Sales Philosophy Is Long Term
I have seen a lot of managers who "get it." They talk about sales and service as the same thing, the need to meet a customer's needs during the sale and not just sell any product, and they encourage their employees to build long-term relationships with customers. Then, in the next breath, these managers announce a new contest starting on Friday and the branch that gets the most credit card applications or home equity applications, or that signs the most customers up for mobile banking gets some sort of prize. Employees get the mixed message that they are only supposed to sell things to people that they need but the contest encourages them to sign up everyone who comes into the branch that day for a certain product, leading to many disengaging customer conversations that turn into the banking version of "Do you want fries with that?"
Overcoming this contradiction is not that difficult. The short-term fix is to stretch the contest out over a week and have the coaches in the branch use it as an opportunity to train front-line staff to meet the customer's need for the product and not just get the sign up or application. The long-term fix is to ensure that only loans or accounts that are funded or accounts that are actually used count toward the branch total.
Your Customer Measurement Program Only Incentivizes on Conversations That End in a Sale
If you are having the sales conversation correctly, it should end in both high customer scores on your current measurement program and a sale. But most customer measurement programs we see measure maybe three things: 1) teller transactions for service, 2) banker transactions for service, and 3) banker transactions for sales. What about all those conversations being had by a teller or banker that involved them trying to sell something but that ended up in the customer declining? Most programs don't measure the sales conversation part of that interaction, only the part where they serviced the customer. Typically, this is because of a technology issue -- banks can't capture the transaction code "had a sales conversation but didn't end up making the sale." However the beauty of a customer survey is that we can ask customers with one simple question if their interaction involved a sales conversation. If a customer says yes, then we can take them through the sales conversation battery. Incorporate both conversations that did and did not end in a sale into your overall customer score and voila -- problem solved.
Your Goal Setting Process Is Mysterious and Ever-Changing to the Field
You probably have a team of people who have been working for months to set the appropriate goals for each branch based on hundreds of data points. You are confident in your numbers and top-level field leadership is confident in the numbers because they understand the process, but has this message appropriately trickled down to front-line field leadership? When it does not and those charged with executing it don't understand, they ignore it and gripe about it because they feel set up for failure. On top of that, if you want a real revolt on your hands, change people's goals multiple times a year. You may think you are meeting current conditions, but often times these changes aren't communicated well and result in the front line feeling that nothing they ever do is good enough and they won't be able to meet these goals. Even if you lower goals, you risk disengaging people from the process because they may feel like you'll just do the same next year, so why bother this year? Unless something is really going wrong, it's often best to stick to your goals for the year and fix any issues next year. If you do need to change goals mid-year, over-communication is the key to success.
I see many more pitfalls than this, but these three are common and relatively easy to fix. In all cases, communication is key. Clear, simple, upfront communication with employees that has a point and doesn't waver is always needed, particularly around incentives. And you can work around technology blocks simply by asking the customer what type of transaction they had -- no more excuses.