How Banking's Best CEO's Build Revenue by Jim Schneider

Sales revenue is the lifeblood of a business, even a banking business.

That's why banking's best CEO's and business unit managers have a passion for selling and a well-defined process for managing sales. They treat great selling as one of their few sustainable strategic advantages. If a company's CEO isn't managing sales, who is? Someone has to drive this marvelous chariot.

The Stakes Are High
Once an effective sales management infrastructure is in place to support sales, sales management just begins, and the stakes are high.

With its sales direction left to chance, a bank can easily sell its way out of business if its employees don't generate enough revenue to cover their salary and benefits. For example, at many banks the least profitable products are the best sold; their employees' inability to differentiate the value of their products results in low margins; and their loan officers are forced to fish at the bottom of their markets among the poor credit risks. These are just a few of the many serious consequences of not actively managing the sales process.

By contrast, senior executives at many of the nation's best performing banks have added millions of dollars in sales revenue to their companies with their active sales leadership.

Good selling improves customer satisfaction and retention of profitable relationships, increases net interest margins, and pumps into a bank the sales revenue that drives profitability.

Only the CEO can affect the company wide integration of sales functions that's necessary for well-focused selling. But you can't lead a calvary charge if you think you look funny sitting on a horse.

Why Most Bank Sales Programs Aren't Working
The most effective sales management processes are simple, but they're not easy to sustain. Effective sales management requires a continuing commitment of time and focus by senior managers.

At one of the nation's best performing large banking groups, the president makes over 300 sales calls a year and meets regularly with field sales managers. At another high performing bank, the senior retail banking executive personally coaches every one of his 120 retail salespeople in selling for an hour each quarter as a model for his managers to follow.

Most bank CEOs are comfortable with selling or they wouldn't have achieved so much success in their careers. But, often, they're not comfortable with the time required to manage sales or with the func-tional skills of sales leadership such as sales planning and sales coaching. As a result, they're often persuaded to champion easy, non-integrated solutions to sales problems. That's why bank sales pro-grams aren't working.

Single event sales programs are easy to champion because they require minimal change or time commitment by senior managers and little interdepartmental co-operation. Middle managers love these programs because they provide virtually no accountability.

Examples of traditional bank sales practices that don't work include the industry's popular cross-sell measures, product sales incentives, and officer call programs which typically focus managers on activity rather than on effectiveness in producing sales revenue and customer satisfaction. Similarly, the structure and detail of activity-driven sales training and mystery shopper programs (some even modeled after the poor customer service practices of industries such as health care and retailing) make CEO's feel that a lot is being done to increase sales despite any hard evidence of substantial improvement in sales production or customer satisfaction.

My twenty years of analyzing bank sales reports and of observing, training and coaching bankers in selling has convinced me that these and other popular "quick fixes" for the banking industry have actually encouraged formula selling and product pushing and have relieved man-agers of their sense of accountability for managing their employees. None of these "easy" sales interventions by themselves can provide the focus, motivation and accountability that's provided by a fully integrated sales process. Most line sales managers in banking know that these traditional bank sales pro-grams aren't that these traditional bank sales programs aren't working, but few managers will say so aloud because so much money and senior management prestige is invested in them.

Only the CEO Can Drive a Quan-tum Leap in Sales
Sales effectiveness begins at the top of the organization chart.

Research at Harvard Business School established that clear sales task is the most important factor in sales motivation. Es-sentially, clear sales task amounts to well-focused roles and goals combined with feed-back and accountability. If this is true, only the CEO and other senior executives can influence large gains in sales production.

If a CEO doesn't communicate a clear vision of success and clear role definitions for selling or doesn't hold line managers accountable for sales revenue production and development of salespeople through coaching, this lack of clarity filters down throughout the bank. When this happens, employees lose their motivation for selling, and average sales revenue per employee declines.

The new school of business leadership espoused by CEO's such as Jack Welch of General Electric stresses the motivational role of a shared vision among all employees.

Yet, repeatedly, our surveys of bank sales employees have demonstrated that bank employees don't know what they're supposed to do relative to sales and cus-tomer satisfaction. Bank sales employees also tell us that they're receiving virtually no sales coaching, no feedback, and no meaningful consequences for performance, good or bad.

For a bank to make a quantum leap in sales, its employees must believe that se-nior managers are placing a consistent focus and priority on sales and customer satisfaction. Only the CEO can drive the type of interdepartmental change neces-sary to integrate sales within every aspect of the bank's operations.

How a CEO Can Increase Sales Revenue Fast
With so many banks failing at sales, what are the CEO's whose organizations are succeeding at sales doing that is pro-ducing such outstanding results?

The answer is surprisingly simple. Banking's best CEO's treat sales as a primary business function, giving sales the same time commitment and attention to detail that they give to pricing and expense control.

In banking's best sales organizations there is a sense of urgency and accountability for sales production and customer satisfaction that isn't present at other banks. This is driven by the CEO's uncompromising insistence that sales revenue contributions and customer satisfaction be considered as key factors in decisions affecting all functional areas of the bank.

This means that impovements in sales revenue production and customer satisfaction are measured and rewarded, that sales and customer satisfaction are key agenda items for senior level management meetings, and that the CEO and business unit managers are visible in articulating clear goals, strategies and preferred ways of selling and in serving as models of personal selling and sales coaching of their managers.

None of this is "rocket science." A bank's line managers find great encouragement and motivation in simply being asked about their progress against sales and customer satis-faction goals, or in being reminded of the bank's strong belief in its preferred way of selling and servicing its customers.

The CEO's of high performing sales organizations also champion continuous improvement through training and systematic supervisory coaching, no matter how good their current performance is. That's one reason why a few select banks have been able to sustain a successful quality improvement program and why some of the best performing "Top 50" banks spend millions of dollars each year on training, often requiring a new salesperson to receive several months of training before he or she actually meets with customers.

For bank CEO's, the next revolution in bank management is here.

The institutions in the forefront of this revolution are discovering that the payoffs for active sales leadership by the CEO are substantial increases in sales revenue per employee, greater customer satisfaction and long term business survival.