A few years ago, I was asked to present on sales compensation plans for a bank client. The leaders of the bank were concerned that their current plan was too complex and just not getting the results they were looking for. As the day came and our meeting started, it became evident that what they were most concerned about was not the compensation plan, but rather, how to improve the sales results of their team.
This realization changed the conversation. While sales compensation plans, such as bonuses, incentives, and commissions, can be motivating factors, it wasn’t the reason this bank was struggling to improve sales.
I asked more questions and realized the bank’s approach to improving the organization’s sales performance was misdirected. Their main focus and the majority of their efforts to improve sales results were being spent on their lowest performing sales people and branch managers. Their current theory for why this group wasn’t motivated and engaged was the sales compensation plan. They admitted that they had “tried everything” and this was their last resort.What they didn’t realize was they were fighting a losing battle.
Banks are retail sales organizations. Every employee who interacts with a member is a salesperson and part of a sales team. But not all salespeople or sales teams are created equal. In fact, you can categorize your salespeople into three groups based on their overall sales performance. I will use the names of Star, Core, and Laggard to identify the three different performance groups taken from an article published by The Harvard Business Review titled, “Motivating Salespeople: What Really Works”.
We will define individuals in each of these groups as follows:
Star Performers are employees who always exceed sales goals, or at the very least, outsell their peers on a consistent basis. They are consistently at the top of sales performance and are sometimes well beyond everyone else on the team. They are the individuals who need very little sales coaching and direction to perform and are generally the ones you wish everyone else could be like. In many situations, Star Performers are never satisfied with their performance and are constantly looking for ways to improve and sell more.
Core Performers represent the majority of your salesforce. Often, these are the individuals who perform within 20 percent, above or below, expectation. When I say expectation, this may or may not be their specified goal, but rather what you consider acceptable and not warranting any corrective action. Core performers see themselves as contributors, and while they may be able to produce more, they are satisfied with their individual sales performance.
Laggards are those salespeople who consistently perform below the average performance of the sales team. They are the individuals who do not respond to motivational efforts, coaching, training, or really any other efforts directed at improving their sales performance. Laggards are not necessarily malcontents; they just simply do not produce sales results.Generally, a Laggard’s sentiment towards selling is negative.
With this understanding, it becomes very simple to place your employees and also your various sales teams into one of the threegroups. As you do, this is generally how your sales force will be broken out:
- Star Performers: 15%
- Core Performers: 70%
- Laggards: 15%
Core performers always represent the majority of your sales team regardless of the level at which the organization is collectively performing. Actual percentages can fluctuate; however, the percentage of core performers generally remains the same.
Bank leaders are often happy with star performance levels and generally satisfied with the sales levels ofthe core performers. So, this often leads them to identify Laggards as the target for blame when sales production is low and needs to improve. While an incorrect assumption, it is easy to understand how bank leaders could come to this conclusion. Out of the threegroups, Laggards have the greatest room for improvement, and between the three groups, they do miss a significant amount of sales opportunities. But focusing on the Laggards is still a losing battle.
Generally, Laggards are individuals with little to no sales aptitude or appetite. While anyone can sell, these individuals are simply not a good fit for a sales role. They are not inspired by the sales role, and often they are intimidated and fearful to sell. This doesn’t mean they are bad people or not a good fit for the bank. It simply means that investing time and resources will generally not make a difference in their performance.
In some situations, bank’s make an equally erroneous investment in Star Performers thinking they can incent employees to Star levels. It is also specious to believe that Stars can simply be recruited. While this can happen, and banks should look to hire individuals with a sales mindset and track record; it is just not easy to find Stars. Salespeople are the athletes of the business world, and if the sporting world has taught us anything, recruiting a Star is unpredictable, and when you do, there are many reasons you won’t be able to hold onto them.
Even still, on a team that can include dozens, if not hundreds of salespeople, adding a few additional Stars will not improve the overall sales production of the organization enough to justify the investment of time and resources necessary to recruit them.
So where should the investment be?
High performing sales organizations understand that Core Performers are the key to improving organizational sales results. Here is why:
- Core Performers represent the majority of your salesforce. A one to two percent increase in sales production will be a noticeable improvement.
- Core Performers are the most receptive to coaching and training.
- Core Performers are more likely to capture a greater percentage of the missed sales opportunities.
- Core Performers are more predictable, and it is easier to plan training and development activities for them.
When a bank wishes to improve the overall success of the organization, it is best to study core performance, assess what opportunitiesare being missed, diagnose the reasons for the missed opportunities, and then develop a plan to specifically address theproblem.
Here is how to go about that process:
DeterminetheRange of Core Performance
To begin, you must understand what core performance looks like at your bank. Using sales data, you will need to measure the average performance of each salesperson in the bank. Of course, you should break this out this by job type. You don’t want to be comparing the sales performance of your branch tellers with that of a mortgage loan officer.
To do this, measure the individual performance of each salesperson based on their average sales production over a specified period of time, such as the last year. Then place each individualinto one of the three groups based on where each one falls statistically. If an individual’s production is near the bottom 15thpercentile, they are a Laggard. If they are in the top 15th percentile, they are a Star. If they are in between, they are a Core Performer. It’s as easy as that.
This activity by itself should be extremely insightful and provide valuable feedback on the state of your sales team. But be mindful that this is just the beginning.
Often, banks will believe at this point they need to benchmark their team against the competition. They look at how their salesforce stacks up against a neighboring bank or bank. While benchmarking against the competition is critical at the macro level, it is actually a distraction at this level. The only thing that matters at this point is where your bank’s core performance is currently at and that there is always room for improvement.
Lift Core Performance
With the core performance range established, goals can be set to lift the range incrementally over time. Goals should be reasonable in the short term and audaciousover the long term. For example, a bank may wish to increase core performance by 10% over the next year and 60% over the next five years. The goals that are set then become the vision for your sales initiative.
Next, this vision should be communicated to all leaders in the bank. Leaders must understand and buy intothe importance of the vision, how it fits into the overall success of the organization, and, most importantly, how it will enable them to create more value in the lives of bank’s membership. In the end, your leaders will be the ones who carry the visionforward. Without their support and efforts, it will fail.
Finally comes the investment of time and resources into the team itself. To raise the individual performance of the team, there are a few things leaders need to do and provide.
First, leaders need to seriously address the performance of Laggards. Laggards hold down the overall performance of the bank, not only quantitatively but also culturally. Laggards are not a lost cause. There may be many core and even some star performers hiding in this group who simply need a shift in their mindset. Laggards should be invited to take initiative and show improvement in their sales results. When initiative isn’t seen, or where improvement isn’t significant enough, leadership must be prepared with an appropriate response.
Second, addressing sales performance will often lead to greater levels of attrition, often from the Laggard ranks. This is a great opportunity for the bank, and leadership should use this opportunity to fill sales positions with individuals who have healthy sales mindsets and track records of success in sales. This is a great way to bring in higher performing salespeople who will lift production. Be sure that new employees enhance the culture you are building.
Third, the bank will need sales training that teaches sales mindset, processes, and skills employees need to be successful. This training must be presented to all employees and immediately incorporated into the bank’s operational training programs and new hire onboarding process.
Don’t Try This at Home. Often, a bank that is going through this process does not have the expertise to build an effective sales training program internally. This is generally because they have not developed leadership with sales trainingor have key individual contributors with the skill or experience to develop such a program. As a solution, a bank can look to a third-party sales training company. There are many training companies that provide sales training,including retail sales training companies. The bank should look for a training company that specializes in financial institutions, and even more specifically, in bank sales.
Fourth, coaching must become a high priority for sales leadership. This may mean senior leaders address staffing needs and sales leaders delegate “non-management” functions to their staff. The goal is to free up time for sales leaders to spend consistent and predictable time coaching their team. Leaders that should be included are all of those in positions like team leads, assistant managers, managers, regional managers, and senior managers of any member-facing employees. Coaching is the foundation needed to help employees develop the sales mindset and skills necessary to reach the banks’ sales vision.
Fifth, leadership must continue to measure results and be consistent in holding their employees accountable for their actions and performance. Results will also provide leadership with the information they need to assess the bank’s progress towards the goals and vision.
By focusing attention on lifting core performance, a bank can drastically improve its sales results over time. The bank may be reaching for a certain goal at first but will soon find that the pursuit of sales excellence will become part of the bank’s culture, and even its identity. And, what might seem like Star Performance today, could become core performance tomorrow.
SalesCU (formerly Nick Brown Consulting) is a credit union-specific, sales training company dedicated to bring a proactive sales approach to every credit union. SalesCU accomplishes this by providing sales consulting and training to enhance branch sales, contact center sales, outbound sales, and lending center sales. The goal of SalesCU is to empower credit unions to cultivate primary financial relationships with their members. Engage Nick Brown directly at 801-860-5807 and firstname.lastname@example.org. Ask about his credit union specific workshops and online sales training, featured at www.salescu.com.