the reality of selling in banking in the 21

Cornerstone Performance Solutions (Pty) Ltd. Copyright Reserved © 2013. This material may not be reproduced or copied by any means except under

license from the owner.

aha! High Impact Banking Sales Behaviours

aha! HIBSBt501 ©Cornerstone Performance Solutions 2013

Contents

High Impact Banking Sales Behaviours Contents ............................................................................................................... 2

Introduction .......................................................................................................... 8

The banking business context ..................................................................... 8

Selling in banking: The pressure is on 8

The changing shape of selling in banking 9

High Impact Banking Sales Behaviour ....................................................... 13

Cluster I: Banking sales acumen 13

Cluster II: Planning and focusing for value 16

Cluster III: The value conversation 17

HIGH IMPACT BANKING SALES BEHAVIOUR CLUSTER ONE ...................... 20

Creating a banking sales context ............................................................... 21

Section 1: Aligning to the banking sales role ...................................................... 25

Introduction .............................................................................................. 25

A brief history of the sales profession ....................................................... 25

Common myths about sales ...................................................................... 28

Article 1: Seven Sales Myths You Need to Stop Believing 32

Article 2: Seven Lies Salespeople Tell Themselves .................................... 34

Article 3: Sales Vs. Service? - How a Business Can Build World Class Customer Service ...................................................................................... 36

Self-efficacy and sales ............................................................................... 38

Professional sales terminology ................................................................. 40

Section 2: Aligning to the banking customer (i) .................................................. 42

Introduction .............................................................................................. 42

Seven principles of financial product purchasing – why people buy ........ 42

Conclusion ................................................................................................. 56

Section 3: Aligning to the banking customer (ii) ................................................. 57

Introduction .............................................................................................. 57



The importance of using a buying and selling process in banking sales ... 57

Understanding the process consumers go through when buying............. 58

Using a sales process model to maximise sales ........................................ 62

The Banking Value Experience .................................................................. 70

Conclusion ................................................................................................. 72

Section 4: Aligning to the bank (i) ....................................................................... 73

Introduction .............................................................................................. 73

The emergence of professional sales in banking ...................................... 73

Banks’ success and the “full value” challenge ........................................... 81

Understanding value 81

Sales, service and full value 85

The exchange of value: The effect of sales on bank profitability .............. 86

The lifetime value of a bank customer 88

Sales objectives in banking 91

Share of wallet .......................................................................................... 92

The importance of cross- and up-selling 94

Customer relationship management 94

The buy-alignment model ......................................................................... 95

Conclusion ................................................................................................. 96

Section 5: Aligning to the bank (ii) ...................................................................... 97

The selling system ..................................................................................... 97

The banking sales system 97

Conclusion ............................................................................................... 100

Section 6: Aligning to the bank (iii) ................................................................... 101

Introduction ............................................................................................ 101

Sales management .................................................................................. 102

Sales territory management 102

Customer service and calling programme .............................................. 107

Sales territory design, development and allocation ............................... 107

Salespeople defined 108

Other considerations 109



Territory allocation 109

Territory today 110

Perfect territory design 110

Management information systems ......................................................... 110

Sales forecasting, targets and budgets ................................................... 111

Forecasting terminology 112

Sales forecasting process 113

Specific forecasting information to be assessed 116

Review and update 117

Managing the sales force ........................................................................ 118

Motivating the sales force 118

Performance evaluation 118

Evaluating performance 119

Criteria for performance measurement 120

Principles of evaluation 121

Compensating the sales force 122

Coaching to develop the sales force 125

Client database management ................................................................. 127

Conclusion: Sales management in the selling system ............................. 127

Conclusion to the sales acumen cluster of high-impact banking sales behaviours .............................................................................................. 128

HIGH IMPACT BANKING SALES BEHAVIOUR CLUSTER TWO ................... 129

Focusing and planning for value ....................................................................... 130

Introduction ............................................................................................ 130

Section 7: Marketing, prospecting, and sales calling ........................................ 131

The influence of marketing on buying and selling .................................. 131

The nature of marketing 131

Marketing: enabling sales 132

Prospecting as part of the sales process ................................................. 135

Forming an initial value proposition ....................................................... 137

Sales plans ............................................................................................... 140



Sales call planning ................................................................................... 141

Accurate sales reporting ......................................................................... 143

Conclusion ............................................................................................... 144

HIGH IMPACT BANKING SALES BEHAVIOUR CLUSTER THREE ................ 145

The value conversation ..................................................................................... 146

Introduction ............................................................................................ 146

Section 8: Presenting a professional image ...................................................... 149

Professional image .................................................................................. 149

Article 1 149

Article 2 151 Article 3 153

Conclusion ............................................................................................... 155

Section 9: Communicating persuasively ........................................................... 156

The basics of persuasiveness .................................................................. 156

Questioning 158

The role of empathy, listening and feedback in persuasive communication 162

Listening is one of the least developed sales skills 164

Feedback is the art of gaining a response or clarifying a customer response 166

Tuning in to non-verbal communication 167

Buying-related signals in non-verbal communication 169

Recognising and overcoming barriers to communication ....................... 174

Advanced persuasion: Crafting your message ........................................ 175

Discovering, positioning and delivering value 176

What makes behaviour persuasive? 176

So what does persuade? 177

Conclusion ............................................................................................... 178

Section 10: The value conversation: Discovering, positioning and delivering value ..........................................................................................................................179

Discovering value .................................................................................... 180

Discovering value and needs analysis 182



Product features and benefits 186

Positioning: matching products to challenges ........................................ 188

Three typical positioning value and product-matching scenarios .......... 190

Closing the sale ....................................................................................... 204

Handling objections ................................................................................ 205

Conclusion ............................................................................................... 206

Section 11: Maximising the bank’s share of wallet ........................................... 207

The importance of maximising share of wallet through cross-selling ..... 207

Principles of cross-selling 208

Up-selling ................................................................................................ 214

Conclusion ............................................................................................... 217

Section 12: Transacting and complying ............................................................ 218

Administration and implementation: the last hurdle to value ............... 218

Critical success factors at the point of completing the sales transaction219

Regulatory compliance ........................................................................... 220

Communicating compliance requirements to the client 222

Conclusion ............................................................................................... 223

Conclusion: Aha! High Impact Banking Sales Behaviours Programme ............. 224



This book

This book contains the body of knowledge the defines the Aha! approach to banking sales in the retail banking environment.

This book contains the knowledge base upon which a variety of learning experiences can be built. It is not a learning experience in and of itself – it is designed to support learning, not to drive it.

This book may not be reproduced in whole or part by anyone, nor used may

Solutions Learning Programme. Aha!, Accelerator Banking Sales Programme, High Impact banking sales behaviours, and other terminology in this book is the property of Cornerstone Performance Solutions (Pty.) Ltd.

Copyright reserved Cornerstone Performance Solutions ©2013.



Introduction:

Why the aha! High Impact Banking Sales Behaviours?

The banking business context Banks make their money by selling financial products and services. If the bank does not grow the amount of money its client base spends on these products and services, it will fail as a business.

It is not only the number of clients that is important but the amount of money (share of wallet) each client spends at the bank. Often this is overlooked in measuring sales success in a banking environment, but it is vital.

We know that most forms of business, including banking, are becoming increasingly sophisticated, fast-paced and complex.

An increase in people using technology, the number of marketing messages trying to get our attention every day and the ability of buyers to access information all contribute to this environment.

The nature of the bank’s interaction with the customer is changing, where certain groups of customers are encouraged to carry out their own banking using different transactional or mobile platforms.

In banking, there is a huge drive for customer growth and retention, and this depends on the ability to sell in this complex environment.

Selling in banking: The pressure is on

The reality of selling in banking in the 21st century is that it has become more pressured than it has ever been before, and this pressure can only increase. Competition and regulation are driving banks to work harder and harder to sustain growth and profitability.

In the customer’s world, financial product options have increased, and many customers have relationships with more than one bank. This means that the preferential relationship a bank may have had with any particular customer is increasingly under threat. Banks have to work harder to retain their customers, and to sell them multiple products to meet their many and varied financial needs, because it is becoming easier to find out about and acquire financial products from other banks.

Moments of contact with customers are also becoming less frequent, as more and more customers prefer digital interaction with all their service providers, including banks. This means that many banks are trying to create more and more sales value from instances of customer contact – the line between selling and



servicing in banking is increasingly becoming blurred. Service staff are increasingly called upon to generate leads that sales staff can convert into new accounts opened and new services offered to existing customers. In some instances, staff who focused exclusively on service are now required to sell as well as provide service.

The increasingly pressured banking sales environment translates into increasing demands upon sales staff, and also on all staff who come into direct contact with customers. Gone are the days when selling in banking was only responding to a customer’s request for a product with an efficient transaction, and service staff did not have to think about cross-selling.

The changing shape of selling in banking

These pressures are forcing selling in banking into a professional era. Being able to sell is becoming as important as any other kind of skill in banking. Sales consultants need an advanced level of skill to be able to generate leads, create value for customers in the selling process, and close multi-product deals. This advanced level of skill rests on great product, procedure and compliance knowledge – but it is much more.

The problem that sales staff in banking face is how to sell effectively. Generic sales literature, general sales training, and personal intuition about what works in selling are seldom enough to meet the increasing demands of professional selling in banking. So while consultants and service staff may want to – and NEED to – generate larger numbers of leads and gain access to opportunities, and staff with sales targets may want to hit or exceed those targets, they may struggle to do so because professional selling in banking is very different to selling in other environments. It is not simple to learn to sell consistently well in banking.

There are few banking-specific selling frameworks and programmes, and there have been few changes in selling approaches in banking to equip staff to meet the new and greater demands that are placed upon them.



There are some selling approaches that work better than others. This has been widely researched. The American Society for Training and Development has developed a comprehensive framework showing exactly what competencies salespeople have to master in order to be great – not just good. There is a wealth of research on the things that make a difference in selling.

But the problem is how to actually get to grips with them and translate them into banking so they can be applied to get far better results when selling banking products to banking customers. Few bankers have the time to try to figure out how to get this right.

That is why “aha! High Impact Banking Sales Behaviours” exists.

It exists solely to help bankers to sell better. It is not for selling items in a retail store. It is not for people who sell computer maintenance plans. Or insurance. It is not even for business bankers who sell financial solutions to businesses. It is specifically for retail bankers. It has taken some of the most effective approaches to selling in any environment and adapted them so that they can be applied specifically in retail banking to drive retail banking sales results.

Engage with this learning, use it to transform the way you know, think, decide and act in sales situations, and you will become the model of the new sales professional in banking. You will hit and exceed your targets.

You will earn the sales incentives on offer and your income, your lifestyle and your future prospects will improve. You will be more relevant to customers, create more value in their lives, and probably be far more satisfied in your job.

Not everybody is willing to become self-empowered. Some people will not ride the wave of professional selling in banking. It will not be because it is too difficult. These approaches can be mastered by ordinary people who are willing to learn. Bankers who do not master this programme will only be those who do not have the will to improve. We suggest you engage with, practice on and complete the journey and see the results before you decide. If you are doubtful, you could surprise yourself.

You may be asking yourself, ‘But why the name “aha!”?

“It is not necessary to change. Survival is not mandatory.”

W. Edwards Deming

(Founding father of quality management, statistician, professor, author, and lecturer.)



Great selling is based on insight. Insight into the customer, into how to sell; insight into the true value of products; self-insight into how to grow and develop… selling is not just about mastering some technique – it is about thinking better so you can sell better. Aha! indicates a moment of insight.

And when selling is done properly the customer has moments of insight that help them buy.

Hence the name.

Using the “aha! High Impact Banking Sales Behaviours” journey to change your sales behaviour and achieve sales excellence

In our experience, working with literally thousands of people who would like to sell more banking products, we have discovered that there is a small number of common problems that banking sales and service staff struggle with.

The aha! High Impact Banking Sales Behaviours journey is set out to systematically overcome those problems so that people can overcome all the obstacles to great selling, achieve sales targets and, if they want to, shoot the lights out and become a sales star.

The importance of the accelerator journey is that it leads to changes in sales behaviour.

A popular quote nowadays goes: “The definition of insanity is continuing to do the same thing and expecting a different result.” Any learning that does not lead to behaviour change – someone actually DOING something different – is not worth the time, effort and cost. Traditional sales training may at times be interesting, amusing, maybe even lead to new understanding. But if it does not help people behave differently in the sales arena it will not lead to a better sales outcome.

Apart from the fact that the accelerator programme focuses directly on selling in retail banking, it is also unique in that it utilises a sophisticated approach that enables people to know, think, decide and act differently in the retail banking sales situation, thereby generating far better results.

This unique approach enables people to not only master new concepts and principles, but gain the insights into how these concepts shape the world of selling in a bank, and also how they can be applied in order to have a great sales conversation and drive great sales results.

It would be useful to ask yourself how you could hope to be successful in the longer term and build a rewarding, enriching career in banking sales without real insights, without a banking sales mindset, without an appropriate toolset and without the right skillset.



Mindset:

What happened when Roger Bannister ran the 4-minute mile? (People believed it could be done, their thinking changed.) What happened because of that event? (More people ran a 4-minute mile; today you can’t even qualify for the Olympics unless you run a 4-minute mile).

Toolset:

What new tool did the pole-vaulters use? (Fibreglass poles. They did not change the way they ran down the path, they just changed the tool and the result was that they jumped higher.)

Skillset:

What new skill did Dick Fosbury introduce? (Fosbury Flop; everyone who participates in the high jump today uses that technique. You could jump in the old way but wouldn’t be able to compete.)

Tony Morris

http://www.franklincovey.com/academyarchive/AdamAcadem yArchivePDFS/Aug08ProgramVideoGuide233tipsheets/Program %20Video%20Tip%20Sheets/ClarifyingYourTeamsPurposeandSt rategy/MindSet.pdf

http://www.franklincovey.com/academyarchive/AdamAcadem



High Impact Banking Sales Behaviour Because your insight, mindset, toolset and skillset will be changed, you will notice new things and behave differently. In fact, the final aim of this book is to equip you with “High Impact Banking Sales Behaviours” – the behaviours that, through extensive research and analysis, Cornerstone has identified to deliver superior results in banking sales.

These behaviours fall into four groups or clusters. Each cluster groups similar behaviours together.

Cluster I: Banking sales acumen

Align to the bank • You have insight into how the bank is focusing on creating value for its customers with the products, channels, processes and technologies you use in the selling process. You are focused on achieving your targets.

• You have insight into why banks require professional selling, how they measure sales success, and how they organise and manage to achieve sales targets. You understand the organisational logic of your own role.

• You have a positive mindset regarding making the sales contribution that your bank requires from you.

• You are skilled at navigating the bank’s structures, systems and processes for product selling, as well as for sales management.



• You are able to make decisions regarding the allocation of time and effort in line with the value you are responsible for in the bank.

• You are a professional, ethical brand ambassador for the bank.

• You have insight into the basic aspects of sales management that create a context for your role.

• You have insight into the measurement of sales, how the measures that are applicable to your role shape your behaviour and how success is evaluated.

• You have insight into the motivational challenges in sales, and the basic aspects of how these can be managed.

• You generate a mental map of the components in your bank’s selling system and understand how they integrate to create value for the customer. You are able to use this mental map in order to plan how to align to the bank and to the customer.

Align to the banking customer

• You have insight into what value actually is in the banking customer’s world.

• You have insight into what drives the buying of banking customers and the problem-solving process banking customers go through when they buy.

• You have insight into the actual value of your bank’s banking products, and how they help customers achieve better financial results using products.



• You have insight into the role that selling plays in helping banking customers solve their financial problems by buying banking products.

• You have a positive, customer-centric mindset and focus on the value you create using products, and not the technicalities of the products themselves.

• You are able to distinguish between sales conversations that create value and those that do not.

Align to the banking sales role

• You have insight into the most important terminology and concepts in play in banking sales.

• You are able to visualise your sales role in the context of your bank and its customers, and have insight into how you facilitate the exchange of value.

• You overcome any outdated, negative stereotypes, misguided beliefs, and negative mindsets about sales.

• You move confidently, ethically, and with pride and purpose in the sales role, while balancing the interests of the bank and the customer and achieving great sales results.



Cluster II: Planning and focusing for value

Planning and focusing for value

• You understand marketing and how it relates to sales.

• You have insight into the relative value of different lead sources.

• You have insight into where your sales efforts will yield the greatest value, and how to plan to maximise value.

• You have a mindset to focus on optimising value by proactively creating a personal pipeline of opportunities.

• You build a hypothesis of value for a particular type of client.

• You build up a personal sales pipeline. • You understand your territory or portfolio and

what you have to do to align to these structures, and the bank’s objectives at this level.

• You align your efforts with those of marketing campaigns where required.

In this programme, planning for value drives only this sales behaviour. In more complex sales situations in banking (like selling financial solutions to businesses) there are other behaviours in this cluster.



Cluster III: The value conversation

Presenting a professional image

• You look the part – you have the appearance of a credible professional representing a leading brand. (This could be in person or in terms of telephone or e-mail etiquette.)

• Where applicable, your workspace organisation presents an image of organisation, order, efficiency and professionalism.

• You maintain a professional interpersonal manner. You maintain respectful politeness, you are focused and to the point, and you are not overly familiar.

Communicating persuasively

• You listen effectively. • You use a variety of questions to clarify the

client situation, problem, needs, and preferences.

• You use insight into the client’s world, and into the value that they require, to be relevant in your communication.

Gaining access to customer sales opportunities

• You use hypotheses of value to educate problems, gain attention, and position potential value. You use hypotheses of value to create interest in your products and offerings.

• You gain and proceed with the client’s consent.



Discovering value • You are able to structure and plan a customer-centric selling conversation by aligning to the customer’s problem-solving process.

• You are able to clarify a customer’s situation, problems, challenges, and needs using relevant questioning.

• You are able to offer banking insight that deepens the customer’s insight into aspects of their problems.

Positioning value • You are able to structure and plan a customer-centric selling conversation by aligning with the customer’s problem- solving process.

• You are able to offer insights and recommendations or suggestions regarding products and services so that the value is immediately apparent in relation to resolving the customer’s problem.

• You close deals.

Transacting and complying

• You correctly state the time requirements, managing customer expectations.

• You position transactional and compliance requirements with empathy, emphasising that they are part of a service designed to protect the buyer and the bank.



• You meet transactional and compliance requirements efficiently and accurately. This includes gathering information, completing documents, making required disclosures, printing documents where required, obtaining authorisation from the customer, etc.

• You correctly inform the customer on steps to fulfilment.

Cross-selling and retaining clients

• You identify opportunities where existing banking relationships may not cover possible client needs.

• You rapidly educate the client on the underlying problems, the value of a solution, and obtain consent to continue.

• You proceed to have the value conversation around the new opportunity, or when declined, politely close.

• You identify future events and milestones in the client’s life that may create changes that trigger needs and therefore may present cross-sell opportunities. You plan to follow up accordingly.



HIGH IMPACT BANKING SALES BEHAVIOUR CLUSTER

ONE:



Creating a banking sales context Many people who enter the sales environment can be overwhelmed with making sense of the sales situation.

On the one hand there is the organisation, with its products, processes, systems, and marketing. On the other, there are the customers, with their particular problems, needs and expectations. Sales people finds themselves in a sales role where they have to do something that meets the customer’s expectations, using the organisation’s products, within the organisation’s constraints and policies, in order to meet sales targets.

This is a can be complex space to work in, and balancing the equation of sales role, customer and bank can be challenging. To act effectively, the sales person must be able to make a mental map of how the pieces fit together, and behave in accord with this mental map or model.

Since no-one else will do it for the sales people, they need to create this map for themselves. The behaviour of making sense of the banking sales context we have termed “creating the sales context”.

There are three aspects of the sales context that are critical:

1. The bank 2. The banking customer 3. The sales role

The first learning challenge is to understand how these three fit together. That is the focus of this cluster.

The contents of this cluster relate to the insights, mindsets, toolsets and skillsets pertaining to three behaviours:



Align to the banking sales role

• You have insight into the most important terminology and concepts in play in banking sales.

• You are able to visualise your sales role in the context of your bank and its customers, and have insight into how you facilitate the exchange of value.

• You overcome any outdated negative stereotypes, misguided beliefs, and negative mindsets about sales.

• You move confidently, ethically, and with pride and purpose in the sales role, while balancing the interests of the bank and the customer and achieving great sales results.

Align to the bank • You have insight into how the bank is focusing on creating value for its customers with the products, channels, processes and technologies you use in the selling process. You are focused on achieving your targets.

• You have insight into why banks require professional selling, how they measure sales success, and how they organise and manage to achieve sales targets. You understand the organisational logic of your own role.

• You have a positive mindset regarding making the sales contribution that your bank requires from you.

• You are skilled at navigating the bank’s



• structures, systems and processes for product selling, as well as for sales management.

• You are able to make decisions regarding the allocation of time and effort in line with the value you are responsible for in the bank.

• You are a professional, ethical brand ambassador for the bank.

• You have insight into the basic aspects of sales management that create a context for your role.

• You have insight into the measurement of sales, how the measures that are applicable to your role shape your behaviour and how success is evaluated.

• You have insight into the motivational challenges in sales, and the basic aspects of how these can be managed.

• You generate a mental map of the components in your bank’s selling system and understand how they integrate to create value for the customer. You are able to use this mental map in order to plan how to align to the bank and to the customer.



Align to the banking customer

• You have insight into what value actually is in the banking customer’s world.

• You have insight into what drives the buying of banking customers and the problem-solving process banking customers go through when they buy.

• You have insight into the actual value of your bank’s banking products, and how they help customers achieve better financial results using products.

• You have insight into the role that selling plays in helping banking customers solve their financial problems by buying banking products.

• You have a positive, customer-centric mindset and focus on the value you create using products, and not the technicalities of the products themselves.

• You are able to distinguish between sales conversations that create value and those that do not.

Being able to align as set out above means that the salesperson can know, think, decide and act with insight, purpose and direction in the banking sales context, and not be overwhelmed or confused by the complexity of the situation. This translates into greater effectiveness, meaning that the actual activity of sales becomes easier, targets become more reachable, and sales becomes a more enjoyable, rewarding and satisfying job.



Section 1: Aligning to the banking sales role

Introduction The importance of this section is that many salespeople find that they may be saddled with perceptions about sales that are negative or disempowering. This may make it difficult for people to approach their job as salespeople with enthusiasm and confidence – and it may inhibit their ability to learn how sales really works.

In this section, we explore fundamental frames of reference around the sales role – with a view to correcting misguided beliefs.

To become a sales professional it is important to understand how the profession of sales has evolved to adapt to market dynamics, as well as to understand how it has evolved to what it is in today’s world.

This serves as a point of departure for understanding professional sales in banking.

A brief history of the sales profession The world of business has changed, the world of banking has changed, and the world of sales has changed.

Early salespeople were peddlers who carried trunks of goods from town to town. They sold in a transactional way and generally had only one or two products. Their sales techniques would be developed to sell those few products to as many people as possible. They would canvas an entire area, offering the product to everyone they saw or met. This method of exchange started with people’s basic need to communicate to exchange goods.

In the 18th and 19th centuries many people became salespeople, and as transport networks developed so did fully fledged trade.

In the late 1800s the first sales process was born. The simple philosophy used by the National Cash Register Corporation (NCR) was:

• Know your customer;

• Know your product;

• Be ready for the customer to buy; and

• Stay engaged with the customer after the sale.

This started “modern selling” and this process was replicated by many others, including IBM and other corporations across the world.



In the 1900s a major shift in selling started with a move from product-centric selling to customer-centric, or solution, selling. This was, however, still based on the processes and some of the techniques used before. This philosophy of understanding a client’s needs in order to develop win-win solutions still exists.

Today, a sales professional needs to become a trusted adviser – a competent professional with the expertise to clearly explain banking products or service benefits, thereby educating a buyer and enabling them to make a well-informed, responsible decision. This requires up to 29 specific competencies, including listening and communication skills, negotiation, relationship-building, integrity, self-awareness and the ability to build trust.

Professional salespeople also understand that a sale has been completed only when:

1. The full knowledge (value) of a product or service is transferred to the buyer (customer);

2. A transaction has taken place; and

3. The product or service meets or exceeds the customer’s level of expectation and need – when full value has been created.



Whether you are employed in a direct sales situation or a service situation, you are part of a system that creates the full value, which means a sale has been completed.

Transaction

Completed sale

Knowledge transfer

Value created



Common myths about sales There are many different opinions about salespeople. Some are certainly not the most positive, but what is the truth?

In reality, the sales profession is one of the most sought-after professions in the world – if you succeed you could be the highest earner in your organisation. In sales, you are the driver of your own destiny, with each day bringing a new opportunity to build new relationships and grow revenue for the bank.

Sadly, though, we have also all heard of the stories about poor salespeople and unfortunately salespeople are often seen as people with the “gift of the gab” or smooth talkers. They are compared to poor used car salespeople or pushy telesales people, and this reflects poorly on salespeople in general.

Many myths exist in the sales profession including:

All salespeople are shady

The negative view of salespeople is deeply rooted in society, and unfortunately most of us have experienced “bad” sales, which reinforces this negative perception of salespeople in general. There are certainly over-the-top, shady, high-pressure salespeople operating, but true sales professionals do exist.

Watch out for these behaviours when you sell:

• Pitching your product without talking to the client to understand his/her needs;

• Not preparing before a sales discussion/client interaction;

• Not explaining the value of a solution to a particular client but just dumping features;

• Not listening or asking appropriate questions; or

• Looking for shortcuts or the easiest way to make a sale without full regard for the customer.



Great sales professionals consistently do the opposite to these behaviours.

• Always be closing (ABC)

Sales managers over the years have pressured salespeople to “always be closing”. It is referred to as the ABC of sales. Unfortunately this mantra drives the wrong behaviour as it implies a close-at-all-costs approach, which in turn leads to a high-pressure sales situation. Of course, sales professionals need targets and need to achieve sales, but never at the cost of pressuring customers into a sale.

A good closer simply asks for the business at the right time. High-pressure salespeople are seldom good closers because they manipulate and build fake rapport as opposed to trust.

Sales ethics doesn’t exist

All bankers are faced with ethical challenges in conducting business. Ethical decisions mean making the right decision even with nobody looking.

A company’s ethics and integrity are directly reflected in the relationship between a salesperson and a customer. Sales professionals build trust and reputation through acting in an ethical manner at all times. This is the quickest route to becoming a trusted adviser, and being a trusted adviser is the fastest way to making targets on a sustainable basis. Always remember that the best decisions are those that consider the short-term and long-terms effects to the customer.

Marketing and sales are the same thing

Marketing and sales are separate but equal professions from a business perspective, but many marketers believe that marketing should play a dominant role. They believe marketing defines the product, decides the message and creates the tools needed to sell the product.

Salespeople believe selling should play the dominant role because this is where the real action is, and let’s face it – nothing happens until a sale is made.

The truth is that both functions are needed, but they are not the same thing. Marketers should be tasked with creating qualified sales opportunities, and salespeople need to understand client needs and expectations and propose solutions accordingly. They are completely different skill sets and wherever possible should not be mixed.



Sales is not a real profession

Many people are embarrassed to say they are in sales. Unfortunately this will stand in their way of becoming successful. Sales has long been seen as a job, whereas being an accountant, architect, doctor, lawyer or teacher is seen in a completely different light. They are seen as professionals.

All professions have five attributes, namely:

a) A unique body of knowledge – concepts and principles that are unique to the profession, and are documented so it is possible to study them.

b) Standards of entry – defined minimum standards of entry into the profession and to continue to operate in the profession.

c) A code of ethics – ethical standards defining appropriate behaviour.

d) Professional commitment – a commitment towards improving the profession itself, including sharing ideas, experiences, energy and other contributions to other sales professionals.

e) A sanctioning body – a self-policing agency that promotes research, administers the profession and acts when there are ethical breaches reported.

Anyone can sell

Selling is extremely difficult. In fact, it could be considered one of the most complicated professions in the world. You need to understand organisations and individuals clearly, and you need to build rapport with many different types of people and with people from different backgrounds and professions.

Often salespeople receive a high percentage of their earnings from variable commission, and in most sales roles your success resets to zero on a regular basis (often monthly).

Customer expectations have never been higher, and banking profitability demands salespeople need to do more with less.

There is no doubt that not everyone can sell, and certainly not successfully on a consistent basis. Only the top sales professionals can truly excel at this job.



Sales is a numbers game

Many people believe this to be true. The more calls you make, the more customers you see and therefore the more chance you eventually will make a sale – if you do 100 quotes, you should get 10 deals, etc.

This approach is short-sighted, and is certainly only a small piece of what determines sales success. This myth can lead to the dangerous misunderstanding that quantity beats quality. The real sales professionals get results regardless of what the numbers say because they focus on proper preparation, building relationships on trust and ensuring they spend time on the right activity.

More relevant in the sales profession are sales ratios, and we will cover these later in this book.

You must like rejection to succeed in sales

Rejection is a real factor in sales, and there are many books, articles and even training programmes that will tell you never to let a “no” upset you.

A better approach is always to bear in mind that we are helping people. If people choose not to open an account or buy a particular product it can never be your problem, as long as you have helped them in an ethical manner and provided them with the necessary information to make the informed decision.

This alone is not a rejection, although it could be an opportunity to improve on areas of your sales approach.

The following three articles are further resources that enable salespeople to consider their misguided beliefs, myths and downright errors in thinking about sales.



Article 1: Seven Sales Myths You Need to Stop Believing

During my career as a sales trainer and keynote speaker, I have been able to interact with thousands of salespeople and I have discovered that many of them still believe some myths about sales and selling.

Here are seven of the most common myths:

1. Price is the primary reason people make a buying decision

I will never argue the fact that price is a factor in every buying decision. However, it is seldom the primary reason people make a buying decision. It is important to note, though, that people will default to price if you fail to demonstrate the value of your product or differentiate yourself from your competitors.

2. Do whatever you need to do in order to get the sale

Manipulative, aggressive, high-pressure sales tactics work. But they don’t create loyal customers and clients. You may win the sale, but in the long run, you will lose the customer.

I once had a participant in a workshop proudly claim, “I don’t care what my customers want, I’ll sell them what I need to hit my quota.” {{{shudder}}} I don’t know about you but I take serious offence to this mentality and type of behaviour because it casts all salespeople in a negative light.

3. Buyers are liars

I’m still shocked by how many salespeople use this expression.

Do people mislead salespeople?

Of course. But it’s usually because the sales person has failed to earn that person’s trust.

Gaining someone’s trust means focusing your attention on THEIR situation rather than trying to close the sale. Earning trust means treating people with respect and dignity even if they are not prepared to make a buying decision right now.

4. Anyone can be persuaded to buy

This may be true for small purchases but in today’s business world, buyers are savvier than ever before. I once heard someone say, “If you have a strong case you will clarify it. If you have a weak case, you will try and persuade the other person.”



The real key is to determine whether or not the person or company you are speaking to has a genuine need for your product or service. If they do not, then your best strategy is to move on to someone who does need AND want your particular solution. Even if a company could benefit from your product but they are reluctant to give you the opportunity to discuss, your time is better spent looking for other prospects.

5. What works well for one person will work for everyone

Countless books have been written about one sales strategy or another and I have read dozens of them. In this search, I have discovered that we all have our unique personality and what works well for someone may not work as effectively for us. However, instead of discarding that particular idea you should look for a way to integrate it into your natural style and approach.

6. Close the sale as quickly as possible

This is one of the craziest beliefs.

Yes, it’s important to move people towards a buying decision. Yes, it is important to gain commitments along the way. Yes, it is important to include a call to action in your proposals and conversations. But it is also important to recognise that not every sales decision will be made quickly. Decisions can be delayed for a number of reasons, and in certain situations, trying to rush the other person to a commitment will actually cost you the sale.

7. Close the deal at any price

Too many people feel they have to close every deal, even if it does not make good business sense to do so. I have spoken to countless salespeople who will accept a deal that has virtually no margin just so they can get the sale.

I recall talking to a store owner who quickly matched the prices of her competitor in order to prevent people from going to her competition. However, this seldom creates loyalty and only conditions that customer to continue asking for a better price.

Decisions like this cost you or your company money.



Article 2: Seven Lies Salespeople Tell Themselves

Sales Lie #1: “I could reach my quota if my company lowered their prices.”

If I had a nickel for every time I heard this…

While price is a factor in every sale, it is seldom the primary reason people make their final buying decision. Very few companies set their pricing higher than the market will bear.

If you rely solely on price to close deals then you condition your customers to constantly push you for a larger discount or a better price.

Sales Lie #2: “I’ve got this deal in the bag.”

I think this is one of the most common lies salespeople tell themselves. In fact, I hate to admit that I’ve been guilty of this from time to time.

It’s easy to think that because someone says, “This looks good, let me get back to you in a couple of days” that they are seriously interested in your product or service. I’ve heard prospects say, “This is great, what do we do next?” only to baulk at making a final decision.

No deal is guaranteed until the other person signs the agreement, gives you confirmation, or places the order.

Sales Lie #3: “The competition is always offering better prices.”

While some competitors will consistently beat you on price, the reality is that most companies are competitively priced. It’s a rare situation when a competitor will out-price you on everything you sell unless the products are different.

Sales Lie: #4: “My territory is too big (or too small).”

In the 16-plus years I have worked with salespeople I have never heard anyone say, “I have the perfect number of accounts.”

In an ideal world, you would be able to see or meet with every account or customer in a perfect cycle.

However, the reality of today’s sales world is that companies are struggling to do more with less, which means most salespeople have to manage a big sales territory. The key is to manage your accounts more effectively.

Invest the bulk of your time managing your best and most profitable accounts (top 20%) and customers that have good potential to grow (next 20-30%). Wean yourself from responding ultra-fast to your high-maintenance, low-profit customers (bottom 20%).

http://fearless-selling.ca/7-lies-sales-people-tell-themselves/



Sales Lie: #5: “If I don’t set a sales target I won’t be disappointed.”

First of all, let me say that I’m surprised how many sales-based organisations don’t require their sales team to establish sales targets and goals. After all, how can you monitor performance if you aren’t tracking results?

Okay, now that I have that off my chest, let’s take a closer look at the lie.

In my eyes, people who don’t set sales targets are essentially saying, “I’m not sure what I’m going to do this year and I don’t want to work harder than I have to.”

Top performing sales reps always set high, ambitious goals and their targets are usually higher than those set by their company. They use these goals to inspire and motivate themselves to achieve more.

Sales Lie: #6: “No-one is buying.”

I recently spoke to someone who sells cars, an industry that has been particularly hard-hit in the last few years. However, his sales continue to increase even though many people in the same business complain of declining sales.

Regardless of the economy, people still make buying decisions. They still make purchases. Companies still need products and services.

Stop wasting time thinking about the people who aren’t buying and find the people and companies who are buying!

Sales Lie #7: “I don’t need to practice my sales presentation.”

Yeah, and professional athletes don’t need to practice because they are at the top of their game.

The best salespeople seldom take their sales appointments and meetings for granted. They rehearse the questions they need to ask. They run through their presentation to make sure they have included the necessary details and that their presentation flows in a logical manner and that it addresses their prospect’s situation and/or needs.



Article 3: Sales Vs. Service? - How a Business Can Build World Class Customer Service

By Brian Panichelle

If you were to perform a search on “customer service” on the internet, almost all of the information you find would talk about how customer service builds a business. Yet at most businesses the sales team and the service teams are separate. The sales team just ropes them in and then it is up to the service team to make the pay-off.

Often times it will even seem that the sales and service teams are at odds. The service team is angry at the sales team for the promises it makes. The sales team is angry at the service team for failing to provide an acceptable level of service to their clients. In reality, these two functions are one and the same.

It has been said in many books that a customer does not buy a product or a service but an experience. I just finished reading The E-myth Revisited: Why Most Small Businesses Don’t Work and What to Do About It by Michael E. Gerber. Throughout the book he stresses that it is an experience, a system that can be followed to provide a benefit to the customer. Not just a benefit but an experience and emotional appeal. How can sales alone provide this experience? It cannot! Sales cannot just paint the picture of an experience, but must provide the experience.

Conversely, service cannot merely answer questions or follow up on complaints. It too must provide the same experience that the sales team painted a picture of for the client. It must provide the same experience that sales provided for the customer. It must recreate the same effect.

The message must be the same. The result must be the same. The passion for the outcome must be the same. The vision of the organisation must not be segmented; it must transcend the various functions of the organisation.

The wise organisational leader must take several steps to ensure that this happens. First the leadership must determine why the organisation exists. Not how it is going to make money, but why it exists. What is the perceived need that it fills in the eyes of the consumer? Not merely a benefit but an experience, a longing that the customer has for security or to feel valued or cared about. Why does the business exist? What value is it going to bring to the customer?

Secondly, the wise organisational leader must be able to communicate these ideals throughout the organisation. Each system and function of the organisation must flow from this sense of purpose of the organisation. If a company is in business for the purpose of maximising profits and little more, this will show. Quality of all products and services of the organisation will begin to show that



the main focus is maximising profits. Corners will be cut, systems will be revamped, staffing shortened all in some misguided effort to make the company better. What will happen in reality is the business will suffer, and the customers will suffer. Keep the purpose in front of the organisation and make sure that all systems provide a consistent and predictable outcome – the desired outcome of fulfilling your purpose.

Finally, the wise organisation will hire the right people – people who will subscribe to its purpose. The people who share the purpose of the organisation as their own. These people need not be extraordinary individuals, just people who believe in the values of the organisation. The United States of America was not founded by great people, only a few good leaders who were able to share their vision of freedom and the American experiment with others – mostly everyday people like you and me. The outcome was extraordinary; it continues to be so today, not because of the extraordinary people but because of the unity of purpose of all the people.

In summary, it cannot be Sales vs. Service, it must be Sales and Service – the two must be on the same page, not just working together, but sharing the purpose and goals of one another and of the organisation as whole.



Self-efficacy and sales Many people have misconceptions about sales and can’t see themselves in sales roles. This is because the general public is misinformed, and there are many negative stereotypes regarding sales.

Sales requires certain skills – and they can be learnt! Sales does not only rely on natural talents such as a sociable nature or a persuasive way with words, it relies predominantly on skill and insight, and these can be massively improved through understanding and practice.

It is true that not everyone may be cut out to be a great salesperson, but most people can achieve good sales results by applying the concepts and principles in this module.

A lot of salespeople that the authors have interacted with are of the opinion that sales is the most fun and rewarding profession in the world. This may not be apparent if one is outside the profession, though.

It has also been said that everybody is put in some kind of selling situation from time to time – in the ordinary course of life we “sell” ideas, courses of action, plans, goods, services, ourselves as employees and potential employees, ourselves as partners, and we buy all the time. Understanding sales and buying is something of a life skill, and not just a technical skill that applies at work.

The challenge in sales is to learn and improve. The diagram on this page illustrates this process.

In the diagram, there are four blocks. The first one is labelled “Beliefs”. This is really where it all starts – your sales success is underpinned by your beliefs, all the insights and knowledge that you have about the customer, about the bank, and about yourself.

If you have appropriate beliefs – well-informed beliefs, and a positive mindset – your potential to perform in sales (the second block) will be higher than it would have been if you had misguided beliefs and a negative mindset.

The action you take is based upon your potential, and action leads to results, as the diagram illustrates.

The interesting thing about human behaviour is that it does not stop there. If your actions prove to be effective, your belief system will be reinforced, and your confidence will grow. Your mindset becomes even more positive, increasing your potential to achieve something. This in turn results in more confident action, and better results. This cycle is well-researched in psychology, and is known as the ’self-efficacy cycle’. It means what it says – it is the cyclical process by which people become increasingly more effective. It is a “virtuous cycle” that keeps getting better and better.



The opposite also applies: it is possible to have incorrect beliefs and a negative mindset, creating low potential, ineffective action and negative results, leading to further undermined self-belief and even lower potential. This is a vicious cycle into depression and burnout.

Please note that ‘self-efficacy’ is a much more sophisticated concept than the popular concept of ‘positive thinking’. It includes positive thinking, but on the basis of informed fact,

solid understanding, effective action, and

measurable results – not just on telling yourself great things in the mirror. It has been said that in sales “attitude determines altitude” – but this is only true if the attitude is based upon facts, and not on myths or mere opinions – and that it is translated into effective action that achieves results. The positive glow that a motivated and positive salesperson can create is all but useless in selling financial products if it is not backed up by real insight and solid, focused action.

The objective of this body of knowledge is to create the beliefs and mindsets that lead to the well-informed, effective action that leads to great sales results, and the cycle of improvement that turns people into winners.

That should be good reason to study the articles above and make sure you don’t fall victim to incorrect assumptions, misguided beliefs, myths and stereotypes about sales. In sales, as in other walks of life, your beliefs are central to what you end up doing and who you end up becoming.



Professional sales terminology There are many terms for the same thing in the sales profession. What one organisation calls a “prospect” another organisation might call a “suspect” or a “lead”. A “qualified opportunity” might be confused with a “qualified lead” – and the list goes on.

Within organisations terms can be as mixed up, so what someone at the bank calls a “client” others might call a “customer”.

It is incredibly useful to standardise sales language to avoid miscommunication at all levels.

Here are some definitions as defined by the United Professional Sales Association:

Buying organisation: Any company, association, team or governmental body that has identified the need to purchase a product and/or service. In the banking world, this could be a business in the corporate sector, or an SME business in the branch network.

Buyer: The person interacting with the sales organisation in order to buy a product and/or service. This could be an individual or a group of people representing either themselves (B2C) or their organisation (B2B).

B2B: An organisation that is focused on business-to-business transactions.

B2C: An organisation such as a bank, which is focused on selling to consumers (business-to-consumer).

B2G: Business-to-government.

Customer: A person or organisation that may buy repeatedly but is not regularly actively engaged by the bank.

Client: A customer who is regularly and actively engaged by the bank.

Lead: See “Suspect”.

Prospect: A buying organisation or buyer who has been qualified and is being actively engaged by the bank, and who has not bought previously from the bank.

Qualified sales opportunity (QSO): A specific opportunity that has been qualified and is being actively engaged by the bank. The opportunity is always linked to a prospect or an existing client.

Selling model: How the sales teams are organised within the bank. This includes organisation structures, processes and tools that enable the sales function.



Suspect: A buying organisation or buyer who has not actively engaged with the bank but falls within the target profile, targeting the efforts or corporate sales strategy of the bank.



Section 2: Aligning to the banking customer (i)

Why retail banking customers buy financial products Introduction

Aligning to the banking customer means understanding what motivates people to buy banking products and understanding what that means for selling. This is the first and most important set of beliefs that will guide you when you are selling.

The fundamental point is that customers buy financial products to make their lives easier by solving financial problems. The section invites you to explore the range and nature of financial problems that banking products can solve, and the kinds of life situations that can cause problems to come into existence.

Seven principles of financial product purchasing – why people buy

A customer has his or her own reasons for every purchase of banking products. It is therefore very important to understand why people buy so that the sales person can add the kind of value that is needed to satisfy the customer.

The reasons customers buy financial products are set out as seven principles below. These principles are extremely important. Anyone wanting to achieve sales excellence in banking cannot do so without complete clarity on these seven principles.



Principle #1: People buy goods and services to solve problems

Consider a few simple examples:

We buy… To solve the problem of…

Food Hunger

Water Thirst

Train tickets Having to go from A to B

A radio A lack of entertainment and information

A medical consultation Being sick and not knowing what to do to get better

An overseas holiday The perceived need or desire for variety, education and adventure

When people shop they are busy solving problems. (If one has the money, it can be fun as well.)

Buying behaviour is problem-solving behaviour. The importance of this principle can hardly be overstated – it helps to clarify why people buy, how they buy and how the sales process helps them solve the problem.

Principle #2: People buy financial products and services to solve financial problems

Banking is no different – people buy banking products to resolve particular banking problems.



Here is a brief overview of some of the types of problems people solve by buying banking products:

We buy… To solve the problem of…

A savings account Not having somewhere to keep money that is being set aside for later use, and having somewhere to keep it securely so that it does not lose value because of inflation.

A cheque account with an overdraft

Not having a way to receive and make payments securely and privately, or a way to access short-term credit to meet short-term needs.

A loan account Not having a way to pay for something that is wanted or needed now and pay it off in the future

An insurance policy, such as a funeral plan or car insurance

Not having a way to protect against insufficient funds to cover unusual needs that emerge from possible events that have a negative financial impact.

An investment product such as unit trusts

Not having a way to save effectively for circumstances that can be anticipated in the distant future, such as a child’s tertiary education or retirement.

A massive project finance deal put together by a project finance house

Not having a way to pay for a massive capital item, e.g. to fund the construction of a multinational dam, such as a project like the Khatse Dam in Lesotho.

An initial public offering of shares of a newly listed public company put together by investment bankers

Not having a way to raise capital in the financial markets to grow a company.



It is clear that when people purchase banking products and financial services they are solving financial problems. There is a massively wide spectrum of products and services that banks offer to solve a large range of problems – from minor problems (not having a way to buy airtime without visiting a shop, for example) to colossal problems, such as the last two examples in the table above.

This diagram illustrates the spectrum of problems that banking products exist to solve.

This is the only reason banks exist – they exist to solve financial problems for their customers. Not everyone likes the word “problem”, but once an existing state has become unsatisfactory, people engage in problem-solving behaviour. Buying is one form of problem-solving behaviour, and that is why the word “problem” is used in this module.

Principle #3 Changes over time create new problems and trigger new buying behaviour

When the environment changes, new problems can emerge, and sometimes these problems will cause people to begin shopping for a solution – i.e., to start a new buying process.



The table below contains a few examples of how changed circumstances trigger new buying processes:

Change over time

Imaginary buyer’s possible problem

What thoughts trigger the buying process (the need)

Become hungry

No food Where is the nearest place I can get the food that will satisfy me?

Become cold Warm clothes are worn out. No clothes that are warm enough for winter. No money for new clothes

Ask mom if she can buy me a jersey. (Mom begins a buying process)

Get first job I have a salary income but don’t yet have anywhere to stay on my own

Maybe I should try to get my own place

Get salary increase

Would rather not be paying so much rent

Maybe I should consider purchasing my own home

Would rather not be depending on public transport

Maybe I should consider purchasing my own vehicle

Plan to get married

How should I ensure I have enough money for the wedding?

Maybe I should save some money. Maybe I should see who can offer me a great savings account

Move out of parents’ home

Too much time cooking How can I spend less time cooking? Maybe I should get a microwave. Or maybe I should just eat more fast food

Bored on some evenings Maybe I should get a TV for entertainment in the evenings

Get a TV Programmes are awful Maybe I should get satellite TV with a wider variety of programmes



With regard to the relationship between changes and buying behaviour, it is important to note the following:

• For any change, the problem that emerges has to do with how the person faced with the problem sees the situation. For example, getting a first job may not trigger a buying process of looking for a residence for everyone. Some people’s parents may be unemployed and they may decide that staying with their parents and contributing is more important than moving out and starting an independent household. If this is the case no new buying process is triggered. And in the last example, getting a TV may satisfy the person’s need.

• In some cases we can see that the same event or change can trigger multiple buying processes. The desire to get one’s own place triggers purchasing behaviour for a TV and a microwave.

• In some instances, the buying process concludes with a purchase. But in other instances it may not – our buyer in the example may get a salary increase, look into purchasing a home and conclude that s/he still does not have enough money. S/he might then decide to save and open a savings account.

• In some instances, one buying decision can trigger another problem that results in another buying process. Our subject buys a flat, then discovers a new problem – it is too cold and lacks privacy, so s/he begins to consider buying curtains, and so on.

• In many situations a person has many alternative solutions to problems that arise. If I am bored in the evenings I can go to bed early, or spend time with my neighbours, or read a book. Good salespeople know how their solution is a good one for the person’s problem, and they know that they have to sell their solution to the buyer’s problem.

• A problem is not the same as a need. The problem is the thing that hurts; the need is the thing that that will possibly take the hurt away. If you have a headache, the problem is the pain. The need is for something that will take the pain away. It is the person’s view of the alternative that will most suit them: a headache pill or sleep or anaesthetic, perhaps. When people shop they could be trying to alleviate hurt – maybe there is not enough of something, or there is too much of something, or what they have is not the right thing. From a buyer’s point of view it makes no difference whether the need is real (cold – no clothes – need jersey) or completely subjective (get new job in swanky bank – but my car is not smart enough – it hurts my image – I need a Mini Cooper). Either way, whether the need is real or imaginary there could be a buying process to take away the problem.



It is clear that buying is part of a dynamic problem-solving process whereby people adapt to changing circumstances. That is why sales starts with the buying process, not the selling process.

The diagram below illustrates the principle.

Full value is either

realised or not

In some cases

purchases are made

Changes

occur

Problems

arise

Buying

processes commence

Principle #4 Financial life cycles follow certain patterns that have well-defined problems

Following on from the principle that people buy because of changes over time, it is clear that they will buy financial products from banks because of changes over time and the problems and needs that emerge from these.

The interesting fact is that there are some broad patterns in these changes over time in a customer’s financial life.

Financial planning theory tells us that there is a typical financial life cycle pattern that applies to most people. A life cycle is defined as a series of stages through which an individual passes during his or her lifetime. This life cycle pattern includes three stages. The amount of time it takes to move through the financial life cycle varies for every individual or household.



There are many ways of describing the financial life cycle. The diagram below is one useful way. It breaks the financial life cycle down into three stages.

The relevance of the diagram is that each stage tends to have problems and needs with which they are closely associated.

There is a rough correspondence between these stages and the age of the person.

The financial life cycle diagram below gives a rough guide.

Stage 1: Basic wealth protection This is when an individual may be beginning to earn money, continuing education, starting a job or career and/or starting a family. The individual should be focusing on building financial security.

Stage 2: Wealth accumulation The second stage goes beyond financial security and is where a person is "giving the money to self". The household head has reached peak earning years, is accumulating wealth and is approaching retirement.

Stage 3: Wealth distribution The last stage involves giving the money to your chosen ones. This stage involves the consumption of wealth, usually during retirement.



Please note that the boundaries between the stages are not exact. The diagram gives a reasonably reliable guideline, but it is just a starting point. Although it helps us understand clients and their needs in context, it does not describe all realities definitively.

The phase that a person is in will tend to have a strong influence on:

• The problems they have;

• The needs they identify; and

• Their buying behaviour for financial products.

The table below gives examples of life cycle needs (activities and events) that require financial planning and products for different age groups.

Age range Possible changes over time

Possible financial life cycle activities

High school:

Age 13-17

• Completing high school

• Preparing for a career • Developing a personal system of record

keeping • Developing a plan for eventual

independence • Exploring financial systems – banks, etc. • Getting first bank account • Evaluating future financial needs and

resources

Young adult:

Age 18-24

• Employment and building an independent life

• Training for a career • Establishing savings • Determining insurance needs • Developing a personal financial identity • Establishing a household • Establishing credit • Earning financial independence • Creating a spending plan (personal

budget)





Adult with or without children:

Age 25-34

• Raising a family and growing a career

• Child-bearing • Child-raising • Discussing and managing additional

insurance needs • Managing increased need for credit • Expanding career goals • Starting an education fund for children • Creating a will • Acquiring assets

Working parent or adult:

Age 35-44

• Becoming settled

• Upgrading career training • Building on children’s education fund • Establishing retirement goals • Developing protection needs for head of

household • Need for greater income because of

expanding needs • Expanding assets

Midlife:

Age 45-54

• Offspring becoming independent and middle age arriving

• Assisting with higher education for children

• Investing • Updating retirement plans • Developing estate plans

Pre- retirement: Age 55-64

• Peaking career and finalising retirement plans

• Consolidating assets • Planning future security • Re-evaluating property transfer (estate) • Investigating retirement, part-time

income or volunteer work





Retired:

Age 65 and over

• Retirement • Evaluating expenses for retirement and current housing

• Meeting responsibilities of ageing parents

• Re-evaluating and adjusting living conditions and spending as related to health and income

• Acquiring assistance in management of personal and financial affairs

• Adjusting insurance programmes for increasing risks

• Finalising estate plans • Finalising will or letter of last instructions

People in certain age groups tend to have similar life cycle needs.

With regard to these stages:

• This set of circumstances will not necessarily be applicable to lower-income segments. Some of the things may apply to all segments whereas others will be segment-specific.

• Activities could fall into other categories.

• Activities depend upon education and foresight – for example, a person with good foresight will start planning for retirement by putting away a proportion of their income from the time they get their first job. Therefore, some people will progress through the activities quicker than others.

The most important thing to grasp is that these stages have different implications in terms of buying processes for financial products. Seldom will a 13-year-old shop for investments; seldom will a 65-year-old apply for a home loan for the first time.

The financial life cycle concept gives clues as to what problems a person may be confronting and, critically, how your bank could help them resolve those problems. The salesperson can use these to begin to understand and investigate the kinds of needs a person may have.



The personal financial pyramid gives a broad overview on the kinds of needs that tend to be associated with each financial stage, and therefore the kinds of products and services that could be useful.

Principle #5: Financial needs from basic to sophisticated fall into various categories that are associated with a person’s financial life cycle

The personal financial pyramid allows us to understand an individual’s financial needs and their relationships.

It is important to understand the following points with reference to the pyramid:

• It starts with basic financial requirements at the bottom, focuses on wealth accumulation in the middle and moves up the pyramid to distribution of wealth as the final financial activity.

• The pyramid is based on a hierarchy where decisions at one level affect the other levels. As a person moves up the pyramid, their financial plan becomes more complex.

• At any stage of their life, a person could be concerned with any issue on the pyramid, but generally a financially successful person will move up the pyramid.

• Not everyone has an explicit financial plan. For those who have one, people either draw them up themselves using whatever resources and relationships they have, or they enlist the aid of professional financial planners or financial service provider staff – bank consultants, insurance brokers, etc.



• This does not mean that a bank consultant is a financial adviser or planner! The financial life-cycle supplies the background against which banks sell products and services. Strict legal compliance requirements (FAIS) govern who can give what type of financial advice – so be warned! This is not an arena for amateurs. Merely glancing at the pyramid shows that some of the services and products that people require to achieve financial success are very specialised. Any bank may or may not offer these products and services, and the salesperson in a retail sales channel will either be selling solutions that support the client, referring the client and generating leads for others in the bank or acknowledging that their bank does not typically offer those kinds of services. For example, a bank offering basic credit, savings and transaction products will not be able to help someone who is looking for estate planning.

• But any bank product or service that a bank sells is a solution to a financial problem, and many of those problems will be determined by the income of the client as well as the problems that emerge with the changes that occur naturally over time as people’s lives develop. In any sales situation it is useful to establish where the client is in his/her financial life cycle in order to understand the problems and needs associated with it, and to know which bank products and services might address them.

• When a sales consultant can understand these things, they can take the sales process from an order-taking process to a value-creating process that will help the client succeed financially, give them value and encourage them to come back when they have future needs. That is when sales consulting really is consulting, and when sales becomes a customer value-creating process.

This leads naturally to the next principle.

Principle #6: The role of sales in retail banking is to help customers solve their financial problems using the bank’s products and services

When a consultant closes a sale they have helped bring an end to a customer’s problem.

Banks have to do this and make a profit at the same time. The competitive environment means that all banks look for ways to create the same or greater value for customers and make more profit. If they succeed, they win.

Competition drives up customer value and drives down cost. (It is interesting to note that this is fundamentally the reason that free market competition is critical to the idea of an efficient economy, and why the topical subject of nationalisation is so contrary to productivity. Nationalisation attempts to remove competition from the economy and incentivises inactivity, driving down customer value and driving up cost.)



Principle #7: Sales are complete when the customer has realised full value from the purchase

It is important to understand that the customer receives the benefit of the sale only when the problem has gone away because the purchase has resolved it.

If one sells a current account for someone and they do not use it, they have not realised value from their purchase, and the bank has not gained a useful relationship. The concept of “quality sales” emerges: quality sales are sales in which the customer realises the full value of the purchase and the bank realises the full reward (income) for making the sale in the first place.

So one can conclude the following:

The objective of sales in banking is to create value for customers by resolving one or more problems, as well as to do so at a profit.

It follows that the process of selling is the process of helping customers solve problems by using a bank’s products, and paying a fee for this value. The more a bank can help a customer solve financial problems, the more it becomes a partner in the customer’s financial success, and therefore, it follows, the more income it can earn.

Banks that are particularly successful at doing this profitably succeed fantastically. Those that do not, flounder. The same applies to people in sales roles.



Conclusion

The following points are clear:

• People buy products for a range of reasons, all of them to do with solving a problem emerging from changes in their lives. These changes often reflect their position in their financial life cycle as well as their personal situation.

• The design of banking products allows them to solve particular types of financial problems and meet particular financial needs that may differ according to the financial life-cycle.

• However, sales is only one part of the system that delivers full value.

• The sale of banking products also generates value for a bank in various forms of income.

• There are various challenges associated with this, including that people use multiple banks and banks must therefore compete for their share of the customer’s wallet.

The goal of the sales consultant is to maximise customer value by selling products in line with bank targets.



Section 3: Aligning to the banking customer (ii)

How banking customers buy financial products Introduction

The key to good selling has less to do the sales person and the product, the price, than it has to do with the customer. As one author put it, selling is what happens when you immerse yourself in serving the customer. Does that sound like a paradox?

To really understand how to be customer-centric during a sales process (and to get great sales results because we know what to do in a sales situation) we need to understand how people actually buy financial products.

To this end, buying and selling process thinking is one of the most powerful innovations in professional sales. It allows salespeople to appreciate that when a customer buys it is not an isolated event but part of a process of problem- solving, and that this process has an identifiable structure.

The importance of this is to be able to sell more effectively by being able to link the sales process to the buying process, and work with greater ease to provide the value the customer seeks.

The importance of using a buying and selling process in banking sales

A sales process is a systematic approach and allows a sales professional to clearly know what to do next to facilitate a customer buying a product or service. This is important to shorten the sales cycle and to maximise sales results.

More important to understand is the buying process, because our role as sales professionals is to align our activity to where the customer is in his/her buying process.

At any stage of buying, potential customers who are badly or inadequately handled may change their minds and not want to buy, and thereby negate any chance of the potential sale proceeding further. If the sales process is long and this happens late in the sequence of events, a considerable amount of time and money spent on the customer will have been wasted, and a future sale may be lost. It also means that the competitor can easily come in at that point in the process.



This has implications for the way we organise the sales function: for example, a lost sale can result from a new, inexperienced or badly briefed staff member, having the customer contact at lunchtime in the absence of other personnel.

Another important factor relates to the many situations in which the buyer is not one person but a group, married couple or formal committee where more people are required to make a decision. This often happens in the complex product sale area.

In the sections that follow we will look in more detail at:

• The customer’s buying process;

• How the sales process aligns with the buying process; and

• How marketing supports the buying and selling processes.

Understanding the process consumers go through when buying This details the thoughts and steps of a potential customer as they conduct his/her selection of a banking provider.

This describes the steps people go through to solve the problem that triggers the need and the buying behaviour.

Understanding the buying process using this tool is one of the most critical skills for a sales consultant, because it allows the sales consultant to have the right conversation at the right time and to stay in step with the customer. This will result in more sales of a greater quality, and a greater probability of giving the customer full value.

This is the UPSA (United Professional Sales Association) buying process that is commonly accepted and universally applicable.



Buying process (UPSA model):

The buying process details how a customer buys any product, and understanding this can unlock a greater understanding of what happens when a customer buys.

The main steps are: initiating, communicating, implementing and measuring. Each of these steps is in turn broken down into sub-steps. BP stands for buying process, and the diagram shows how initiating has three sub-steps: BP 1 – plan; BP2 – recognise; and BP 3 – search.

It is important to note that a sale continues after BP6 (obligate), which is when the buyer signs the documentation and a sale is traditionally registered. The implementing and measuring phases are vital to ensure cross-selling opportunities, as well as to ensure customer expectations are adequately met.

Step Sub-step and keyword

Explanation

Initiating a purchase

BP 1 – Plan The client is considering how to adapt to changes

BP 2 – Recognise

The client is recognising needs

BP 3 – Search The client is searching for ways to meet the needs




Explanation

Communicating BP 4 – Assess The client is assessing options available to meet the needs

BP 5 – Choose

The client is comparing options available to meet the needs

Implementing the product

BP 6 – Obligate

The client is committing to the purchase

BP 7 – Implement

The client commences product usage

Measuring the product’s value

BP 8 – Track The client uses the product and services and begins to form impressions as to whether full value has been realised

BP 9 – Integrate

The client forms broad final and lasting impressions about the product – including the service associated with the product – and decides whether to integrate it into his/her life in future or not



A new potential banking customer could do the following:

Sub-step number and keyword

What is happening in the world of the client

1. Plan: Clients think about changes that are occurring in their world – e.g. their child has now started primary school.

2. Recognise: They now realise they may have a need for a bank (savings) account.

3. Search: They start to look for a bank to service their need.

4. Assess: They meet with possible suppliers (banks), probably coming in to a branch, doing research on the internet or asking their friends and relatives. They ask questions about interest rates, periods, withdrawal costs, etc.

5. Choose: They start to select or shortlist one or two banks and ask about the application process in detail.

6. Obligate They sign the documentation.

7. Implement: They are now a customer and they begin to use the account.

8. Track: They experience the service offered by the bank and start to evaluate their service experience. They evaluate how well the product or service fulfils their needs. (Is it easy to deposit money? Are account statements delivered? Can they understand the interest accrual? Is the ATM network working? Is the internet banking facility easy to use and secure?)

9. Integrate: They start to think about making more use of the bank and its services – e.g. they begin to consider opening an account for the needs of their next child.

As you can see, these steps are fairly distinct, but they can happen in sequence very quickly or each step could take some time. The buyer can also exit the process at any point.



Some phases are more important than others. The Assess and Choose phases in our example would be key, and this is where the sales consultant communicates the value the customer would get from a particular product. In banking, skilled sales consultants should close a high percentage of deals by performing well in this stage.

By understanding how a customer buys it makes the task of selling (or facilitating buying) significantly easier. The key is to quickly work out where the customer is in his/her buying process and align your sales activity (process) accordingly.

Using a sales process model to maximise sales Just as there are nine steps in a buying process, so there are nine steps in an aligned sales process. The key to increasing sales success is using the sales process steps in sync with where the customer is in his/her buying sequence.

Sales process (UPSA model):

SP1

SP2

SP3

SP4

SP5

SP6

SP7

SP8

SP9

Think

Market

Target

Support

Accept

Commit

Fulfil

Protect

Expand

As a sales consultant you move around the sales process, but always at the discretion of the buyer. The buying decision is made – resulting in a buy (or not) – at sales phase six – Commit. If the customer has chosen your bank you are now obligated to deliver the product and fulfil the service.



In brief, activities include:

Customer buying process

The selling process

The corresponding activity

BP 1 – Plan – the client is considering how to adapt to changes

Think Making sure that there is a good foundation to help customers. This could include branch preparation, creating the right customer environment and preparing the sales team.

BP 2 – Recognise – the client is recognising needs

Market The bank creates a need and awareness in the marketplace. This could include advertising as well as educational road shows and promotional events that talk about the need for certain banking services.

BP 3 – Search – the client is searching for ways to meet his/her needs

Target This is where most prospecting is conducted and the bank tries to create qualified sales leads. This could be via marketing or advertising, or simply with sales campaign activity in the local market area.

BP 4 – Assess – the client is assessing options available to meet the needs

Support The bank provides information to a prospective customer and starts to understand what that customer expects in terms of value. This is where the bulk of the selling happens, with value and benefit discussions.

BP 5 – Choose – the client is comparing options available to meet the needs

Accept The bank starts to accept the work, ensuring that the client has everything necessary to fulfil the service and product delivery in the timeframes agreed. All the necessary documentation is made ready. This could also include credit checking or other application processes.

BP 6 – Obligate – the client is committing to the purchase

Commit The customer agrees to terms and conditions and signs any contracts. The bank is now committed to providing the products or services.




The selling process


BP 7 – Implement – the client commences product usage

Fulfil The bank implements the product or service and ensures the customer is fully educated in their usage.

BP 8 – Track – the client uses the products or services and begins to form impressions about whether full value has been realised

Protect The client will track the progress and usage of the product or service, making sure it is a quality sale, and potentially follow up on customer expectations.

BP 9 – Integrate – the client forms broad final and lasting impressions about the product, including the service associated with the product, and decides whether to integrate it into future life or not

Expand This is where a full investigation of usage and analysis of other potential products or services can be done. You should be fully aware of the customer’s strategic process in using their chosen product or service.

Simply put, the more accurately you can synchronise the sales activity with the buying process steps, the greater the chance of the sale.

Let us consider an example to see how the selling process is linked to the buying process. It is the same example used above, with the selling process incorporated.




The customer example

The selling process


BP 1 – Plan – the client is considering how to adapt to changes

Thinks about changing something – their child has now started primary school.

SP1: Think

There is no sales interaction in SP1. It is the continuous preparation for customers that banks undertake.

BP 2 – Recognise – the client is recognising needs

They realise they may have a need for a bank (savings) account.

SP2: Market

At this stage the bank starts interacting with potential customers, including perhaps the one in the example. The bank creates a need and awareness in the marketplace. This is a continuous process, creating the awareness so that people think of the bank when they enter SP2.

BP 3 – Search – The client is searching for ways to meet his/her needs

They start to look for a bank to service their particular need.

SP3: Target

This is where most prospecting is conducted, and the bank tries to create qualified sales leads. This could be via marketing or advertising, or simply with sales campaign activity in the local market area. The bank may reach the particular customer. Here the interaction with the customer is broad and general. The bank, through marketing activities, establishes its credibility as a supplier of financial solutions. The customer may not contact a bank in this step – they may undertake it independently.





The selling process


BP 4 – Assess – the client is assessing options available to meet his/her needs

They meet with possible suppliers (banks), probably coming in to a branch, do research on the internet or ask their friends and relatives. They ask the questions about interest rates, periods, withdrawal costs, etc.

SP4: Support

The bank provides information to a prospective customer and starts to understand what that customer expects in terms of value. This is where the bulk of the selling happens, with value and benefit discussions. The interaction becomes more specific and more personal at this point. However, customers may go through this step on their own without the consultant’s help by researching options themselves.

BP 5 – Choose – the client is comparing options available to meet his/her needs

They start to select or shortlist one or two banks and enquire about the application process in detail.

SP5: Accept

The buyer is more serious about the purchase. The bank starts to accept the work, ensuring that it has everything necessary to fulfil the service and product delivery in the timeframes agreed. All the necessary documentation is made ready. The application forms and FICA requirements are explained and implemented. The consultant should facilitate the person to choose a bank using the sales skills covered in the balance of this module.





The selling process


BP 6 – Obligate – the client is committing to the purchase

They sign the documentation.

SP6: Commit:

The customer agrees to terms and conditions and signs any contracts. The bank is now committed to providing the products or services, and a legal and binding relationship comes into existence.

BP 7 – Implement – the client commences product usage

They are now a customer and they begin to use the account.

SP7: Fulfil

The bank implements the product or services and ensures the customer is fully educated in the usage of the products or services.





The selling process


BP 8 – Track – the client uses the product and services and begins to form impressions about whether full value has been realised.

They experience the service offered by the bank and start to evaluate how their service experience is rated. They evaluate how well the product or service fulfils their needs (Is it easy to deposit money? Are the account statements delivered? Can they understand the interest accrual? Is the ATM network working? Is the internet banking facility easy to use and secure?)

SP8: Protect

The bank tracks the progress and usage of the product or service, making sure it is a quality sale, and potentially follows up on customer use and expectations. Any kinks can be ironed out. The bank’s objective at this stage is to ensure that the customer’s expectations are being met, as well as the bank’s objectives.





The selling process


BP 9 – Integrate – the client forms broad final and lasting impressions about the product, including the service associated with the product, and decides whether to integrate it into future life or not

They start to think about making more use of the bank and its services. They begin to consider opening an account for the needs of their next child.

SP9: Expand

This is where a full investigation of usage and analysis of other potential products or services can be done. You should be fully aware of the customer’s process in using their chosen product or service. The customer is contacted by the sales channels to investigate whether further changes have occurred and whether there are further opportunities to add value.

• Note that the process does not always move in a straight line. Someone in BP 5 could discover new information that takes them back to assessing the options – a BP 4 activity.

• The process can go slowly or quickly. A person can go from BP 3 to BP 5 in five minutes or three months. One of the key things a salesperson will need to do is to link to the process the buyer is in to help them move on.

• When sales behaviour is out of sync with the buying process, problems usually occur. For example, if a person is trying to complete an application form – an SP5 activity – when they are still assessing the best option will result in the customer resisting and possibly going elsewhere. The client must finish each stage before moving on to the next.



The Banking Value Experience

We noted above that the buying process does not always unfold in a straight line. Another way of looking at the buying process is through the lens of the model above. It is called the Banking Value Experience.

It is another way of representing the customer’s total experience of the bank from the moment a problem occurs (BP1) to the point when the person has received the value and has evaluated the entire experience (BP9).

You will note that the buying experience commences with a trigger event – usually a change – and that that change leads to the formation of a problem (or opportunity). This problem then results in a buying process, which essentially goes through three stages. All of the buying process steps can be mapped onto the stages in the BVE.

• The person becomes aware that there is a problem (BP 1). At this point the customer’s problem-solving process usually commences.

• They enter a stage of recognising and exploring the problem. During this stage they may already be thinking about solutions, but they will be more



concerned with what the exact nature of the problem is. If they are thinking about solutions, they might even be learning more about the problem by exploring the available solutions (BP2-3).

• They enter a stage of confirming the exact nature of the problem and finding and choosing a solution that matches all the requirements and solves every aspect of the problem (BP4-6).

• Once they have made a decision as to the best solution, they make the purchase and then implement the solution and evaluate it (BP7-9).

This diagram of the process is more life-like than the straight line view of the buying process, because clients move through these spaces, not in a straight line, but typically in a circular fashion.

To illustrate: assume for a moment that you were a customer who had never bought a home before and had little knowledge of mortgage finance.

• The problem: how to buy a house when you don’t have all the cash for it. • Recognising and exploring the problem: You go to the bank to find out about

how to finance a house. There you discover the facts about affordability, rates differences, loan-to-value and so on. This gives you insight into the home that you can afford with your savings and your income. Your assessing a solution has helped you to clarify the problem of exactly what kind of home you can afford with your resources.

• Confirming and deciding: At this stage, you might start thinking about purchase dates, type of mortgage finance, your deposit. You might find out that purchasing a house under a certain value as a first-time buyer has certain benefits under a promotional package, but that you underestimated legal costs, so your view of the problem changes.

• At the moment that you purchase a home-loan product, you have worked to get the best picture of the problem and the best picture of a solution that fits that problem. You may end up with an access bond to the value of 80% of the house, using it for short-term savings as well as to finance the house.

The skill of the consultant in guiding you through the purchasing process will determine part of you banking value experience. The experience of dealing with the bank in the service delivery phase will determine your overall experience of banking value.

The crux is that sales and service are all components of helping a customer solve a problem and use the solution. Sales and service are equally important in determining the value that a customer attributes to your bank.



Conclusion The importance of understanding this section cannot be overstated. Trying to close a sale when a person is in BP 3 will be unsuccessful, for example, and doing a detailed needs analysis with someone who is in BP 5 and has already concluded that they need a specific solution from your bank will only jeopardise the sale.

These are key points:

• People buy financial products to solve particular problems by following a structured process. They move from step to step. Sometimes they move backwards before they move forward again.

• The consultant must understand the buying process and move in sync with the client for the greatest sales success.

The first actual challenge in making sales is often to find and engage with people who are engaged in a buying process. To achieve this, banks rely on marketing, which attracts customers once they have needs, and sales prospecting, which involves salespeople proactively contacting people to establish whether they have current or potential financial needs that the bank can address.

In many instances, where customers are not actually engaged in a purchasing process, the effectiveness of marketing and selling will depend on how well sales consultant can make a customer aware of a problem that had not yet occurred to him or her, thereby triggering a new buying process.



Section 4: Aligning to the bank (i)

Professional selling and the exchange of value with the banking client Introduction

To understand professional sales in banking, there are a number of critical principles to understand.

Against the backdrop of these principles it becomes far easier to understand sales in banking fully – not just as a series of targets that must be met but as a system of activities that generate value for the customer and the bank.

If these principles are not grasped and mastered, sales activities appear to amount to simply filling in forms. That is not professional sales; it is taking orders.

The sales approach required in banking today is something quite different – it is intelligent, professional, value-focused sales, keeping in step with and facilitating the customer’s buying process. This will make banks more successful by enabling them to use sales to help customers derive real value. It is also what will make sales consultants more successful.

The emergence of professional sales in banking

As sales has changed and evolved, so the world of sales in banking has also changed. Today professional selling in banking is not as simple as completing the transfer of products or services to a customer. There are decisions to be made, conversations to have and knowledge to be transferred.

Successful sales depends on finding the right balance between art and science, between skill and intuition.

On the one hand there are more informed buyers (customers) making buying decisions; on the other hand there are organisational processes in the banks. Sales bridges two worlds.



World of the buyer

• Problems • Wants and needs • Expecations of

value

Sales

Matches the bank and the

buyer

World of the bank

• Products • Services • Systems,

processes and technologies

The science of sales involves following well-defined sales processes to increase the chance of selling a product or service to a person or group of people. The art of sales involves understanding how best to communicate, persuade and gain insight and influence.

As noted above, there are compelling reasons for banks to become professional selling organisations.



The article below is published in the SA Banker Magazine, July 2012 edition.

It provides insights into the reasons selling is becoming increasingly professional in banking.

A new era: The retail banking sales professional

Derek Shirley, SA Banker, Volume 2, 2012

As the world of banking changes and the pressure on sales forces increases, it is going to become increasingly necessary for banks to professionalise their sales forces to sustain growth and customer value.

The demand for sales performance

There are always a range of economic factors driving a range of sales targets. The annual PwC analysis of the major banks’ financials 1 highlights the importance of deposits in 2012 to 2013. The report predicts that retail deposits will be cheaper than wholesale deposits as a source of funding for banks. Operationally, this will translate into aggressive sales targets.

Net interest margins on unsecured lending have been good over the past year. There is a market swing towards these products in the retail banking space. This will no doubt mean aggressive sales targets.

Then there is the annual quest for the bottom-line growth that meets shareholders’ expectations. Those requirements cannot be met through cost reductions alone. A better top line is imperative, conceivably generated by fewer, more productive staff, higher sales targets and offsetting the cost of Basel III.

All in all, the pressure is on for sales in a way it has never been before. And the world in which these sales have to be made is changing rapidly.

Sales staff in retail banking have to achieve more with less

1 “Maintaining stability amid uncertainty – South Africa – Major banks analysis: 31 December 2011 reporting period”, 14 March 2012, www.pwc.co.za/banking- analysis

http://www.pwc.co.za/banking-analysis

http://www.pwc.co.za/banking-analysis



A number of trends are continuing to make the banking sales environment more challenging than it has ever been:

• Bank brand differentiation and loyalty still does not provide access to customers when they purchase financial products. As reported in Time magazine, generally, brand and product differentiation in banks remains elusive. “A survey conducted by marketing research firm Brand Keys found that consumers make no differentiation – none – between bank brands. “They’re still among a group of brands where there is zero differentiation,” says Brand Keys founder Robert Passikoff.”2 In most banking sales situations consumers essentially believe they are buying commodities on a transactional basis rather than expecting a value-adding sales process, and no bank brand yet provides any degree of certainty that it will have access to its existing customers when they buy a financial product or solution.

• Competition is more focused and more vigorous when purchasers do decide to buy. Competition for share of wallet is intensive. To illustrate, Capitec Bank claimed about 900 000 new customers last year, primarily in the less affluent customer segments, and there are major initiatives to capture market share in these segments by the other major banks. When will the segment reach saturation? Cross-selling is more important than ever in this segment because there are fewer and fewer unbanked customers. The example serves to illustrate the more embracing reality – competition is increasing for all segments and all product categories. The proportion of customers who have an exclusive relationship with any single bank is declining.

• Buying behaviour is changing. Technology is exerting a dramatic influence on consumer behaviour, and this trend will continue. The internet is already enabling consumers in some segments to become more informed about competitive bank offerings and pricing, and, very importantly, service standards. Customers are more self-empowered and more able to buy comparatively, and as a result competitors are introduced earlier in the consumer’s buying process. This means that a proactive, informed and professional approach is required to win business, and that the

2 Time magazine, Martha C. White, July 12, 2011, http://moneyland.time.com/2011/07/12/consumers-distinguish-toilet-paper-brands-better- than-banks/ (Survey conducted on US banking customers.)

http://moneyland.time.com/2011/07/12/consumers-distinguish-toilet-paper-brands-better-than-banks/

http://moneyland.time.com/2011/07/12/consumers-distinguish-toilet-paper-brands-better-than-banks/



speed and agility of the sales force and the selling system become ever more important.

• Compliance requirements make the sales process more administratively demanding. With particular reference to the less affluent segments, a dramatic upswing in unsecured lending has already attracted the regulator’s attention amid concerns that indebtedness remains too high and savings too low. This illustrates the increasingly hawkish regulation of financial product sales, which is already ruled by acronyms: FAIS, FICA, NCA, and CPA. Although these acts have increased customer protection and helped manage other risks, they have also created considerable compliance requirements and diverted resources away from discovering customer value and into administration – and more can perhaps be expected. The ratio of staff training that is dedicated to compliance has become disproportionate, and is exerting a negative influence on banks’ ability to develop effective sales teams.

Sales consultants in retail banking need to achieve more, with more sophisticated customers to whom they may have less effective access, in a more competitive environment and in a regulatory context that is becoming ever more stringent. This reality is even more pronounced in business banking, where the solutions are more complex and the stakes higher.

One conversation: the difference that makes a difference

Many banks are investing heavily in their selling processes and technologies to match this emerging reality. Alternative channels, detailed micro-market analyses, elaborate MIS, exact performance targets, marketing integration, incentive schemes and sales portals are all being developed and deployed. The list goes on.

What does this mean for a sales force that must use new technology and new processes to sell in changing markets under new conditions?

Clearly the historical platform of passive lead sourcing for sales teams, and an order-taking mindset, cannot prevail. In the emerging world, more of the top line in retail banking hinges on the quality of one conversation – the sales conversation – than ever before.

A poor sales conversation leads to an order taken. A great conversation, on the other hand, leads to a multiple value opportunities discovered, value positioned, solutions or outcomes sold, a relationship built, cross-sell ratios improved and a greater share of wallet, as well as a more satisfied and better-serviced customer.



That one conversation should be so valuable is a sobering consideration.

What sales behaviour makes a difference?

This is a very different question to asking what new training is needed. Behaviour is what people do that makes a difference. Effective sales behaviour is empowered by systems and guided by performance support tools, but nothing can substitute for an agile, purposeful and skilled sales force. Training is but one component in shaping behaviour – but it is an important one.

Research and analysis over the past few years in South Africa, along with international benchmarking, point to the fact that there is a need for a new sales workforce in banking – a professionalised one. Developing this sort of workforce will be a new and unfamiliar challenge for learning and development, and for bankers in general.

Sales theory tells us that great sales results come from the “snap” formula:

(The skill of the sales force) x (the number of applications) x (the allocation of effort) x (the selling process).

Getting this right will likely require new behaviour at various points in the sales value chain. Over and above the compliance requirements and systems and product knowledge, the following behaviour in sales teams will have to be optimised:

• Decisions on where to allocate sales effort for greatest reward; • Understanding the customer life cycle and the changes that drive

buying behaviour; • Gaining access to customers at the right time; • Analysis of customer buying behaviour and what constitutes full

value from the customer’s point of view; and • The conversational skills to facilitating the buying process so that

the customer can realise full value from a range of products. This is not the same as selling products – it is a more sophisticated conversation that focuses on product only to the extent that these are the vehicles that deliver customer value.

The skill set underpinning this behaviour – and this is not by any means the complete set – is far broader than the skill set underpinning the traditional order-taking role fulfilled by many salespeople in banking. This behaviour does not emerge by tucking a couple of days of sales training into a curriculum that focuses on product, compliance and system knowledge; it requires a new approach with a focus on professionalising the sales force.



It is clear from the article that professional conduct is highly relevant to success for individuals and for banks themselves in the emerging marketplace of the 21st century.

For sales and service channel bankers

From the article it is also clear that in sales and service channel jobs a number of things are important:

• Professional levels of skill in sales will increasingly become necessary for people in sales roles. The most professional staff will earn the best bonuses and enjoy the greatest rewards.

• Sales team leadership and sales management are critical to the continued success of any bank. Professionalism in these roles is at the heart of continued bank success.

• For service roles such as tellers, a sales dimension will become increasingly important. Whether it is to identify leads and treat them correctly, or in planning and participating in campaigns that generate sales leads, or in supporting sales team members in whichever way possible, sales-oriented behaviour will always be a factor in personal career success.

In sales and service channel roles, it is unlikely that much progress is possible without at least an awareness of sales principles and concepts. Because the impact of service on sales is so great in terms of retaining customers and generating leads, service and sales are joined at the hip. Service roles have a sales element to them, and vice versa. In many respects, in banking sales and service channels, sales and service are Siamese twins and cannot be fully separated.

What is required is a new paradigm for learning and development for sales roles.

Perhaps the historical quest for differentiation through operational efficiency is being superseded by the opportunity for differentiation in the sales process, and hence in the service process. Detailed analysis shows that it can be done. It will, however, require a rethinking of some of the traditional assumptions regarding effective sales behaviour.

The bank that gets this right will certainly enjoy rich rewards.



In roles where there is accountability for both income and expenditure, like some branch manager and many regional manager type roles, it will be impossible to succeed without a detailed knowledge of sales management. At a senior level in channel jobs there are very few banking jobs that do not have sales and revenue as a primary focus.

There is ample reason to master sales for staff in channel environments.

In jobs where sales and service is not directly part of the role

In a large organisation it is sometimes easy to lose sight of the wood for the trees. That is why it is not always evident that everyone in a bank exists either to help someone in a sales or service role to achieve their objectives, or to help someone who in turn helps sales and service staff to achieve their objectives.

So, indirectly, everyone who works in a bank is involved with sales and service – either directly, in enabling sales and service, or in facilitating sales- and service- enabling functions.

There are few places where the effect of an employee’s contribution is not directly or indirectly related to the sales a bank achieves. An awareness of sales concepts and principles can be very useful. The bank, after all, exists to create “full value” for the customer. In the next section we examine what this means.



Banks’ success and the “full value” challenge Customer value – the value the bank delivers to the customer – is fast emerging as the most important consideration in banking sales. Full value is created when all expectations of value are met.

The sales focus will therefore need to shift from simply increasing sales to ensuring customers’ needs are met and that full value is delivered before, during and after the purchase.

Understanding value

The term “value” is one of the most overused and misunderstood terms in business today. “We add value”, “we provide value”, “we have value-adds” – the list goes on.

What, then, does “value” actually mean?

A useful definition for “value” is anything a customer can complain about.

In the landmark book Sales Chaos, authors Dr Brian Lambert and Tim Ohai explain that value has six basic elements (called customer expectations):



All customers have expectations in these six areas. The table below explains each expectation.

Expectation Explanation

Appeal The look and feel of the product, marketing, appearance and branding. Does the total bank offering satisfy the customer’s expectations of professionalism, class and elegance?

Cost The total cost of a product or service, including pricing, terms, discounting, fee structuring, etc. Does the pricing of the services compare favourably with comparable value available elsewhere?

Efficiency The service and how easy it is to do business with the selling organisation. Includes convenience, service-level agreements, operations, delivery, etc. How easy and quick is it to get products and how good is the after-sales service?

Quality The quality of the product being purchased. How well it is structured, built and created. How durable it is. Answers the customer’s question of whether this product delivers results now, and whether it is flexible enough to also meet future demands.

Accountability The risk and guarantee factors. Will the bank make my expectations and requirements come true if there is a hitch? If something does go wrong, can I access management, and how will the bank fix things? If I cannot access my bond money as promised, who will fix it and how quickly? Who will be responsible for making my expectations become reality?

Satisfaction The overall emotional experience of buying a product or service. This can sometimes be an irrational view of an emotional customer and is purely based on how the customer feels about the sales and service interaction. Am I happy I used this bank’s services?

Understanding individual customers’ expectations is vital in managing the delivery of sales and services. Each customer or customer group will have different priorities in terms of these expectations, so it is important to ask the right questions to understand which are most important.



Is total transactional cost the most important compared with the guarantee of a certain interest rate and service level? Or is this customer loyal to the brand regardless of cost or quality? Perhaps the customer wants the most flexible 32-day call account, with the best interest structure, even if it is harder to get and could include higher upfront costs?

Know this information and you will automatically sell more effectively. The bank that meets these expectations of value through sales and service will be the most successful.

Full value means satisfying all these expectations.

Increasing the amount each customer spends (share of wallet) is a key strategy for banks, and this can be achieved only by nurturing the right relationships through the real and consistent delivery of customer value.

Sales is complex, and buyers are becoming more selective in how they buy products or services.

Many buyers, however, still buy transactionally (they believe they know exactly what they want, and the banking consultant should just facilitate their paperwork to “sell” them the product or service). This type of selling is really a form of order-taking. In this situation, the sales process does not create any further value for the customer.

Consulting- based buying

and selling

Specialist solution-

based buying and selling

Transactional buying and

selling Full value

Outcomes- based buying

and selling



But order-taking behaviour is not always the kind of behaviour that contributes to full value and maximised share of wallet for the bank. There is often an opportunity to respond to an order-taking service request with a more needs- based approach. For example, a person requesting a savings account may be “placing an order” for a product that that will not give them full value. The consultant must establish what full value would be through questioning – there may be a better solution than a savings account. On the other hand, full value may be realised through simply fulfilling the order – if the customer has done an analysis of his/her own needs and weighed up the pros and cons of the various alternatives him/herself, and has reached the right conclusions.

Other buyers look for more detailed advice and the banking consultant should adequately understand their situation, needs and expectations to give them the appropriate solution to their needs. This consulting approach allows the banking consultant to position products or services skilfully to conclude a sale that is often larger than those done in a transactional manner. This approach creates value for the customer, helping him or her make choices that increase the value of the purchase.

In other approaches the person may require a specialist solution to a specific, more complex problem – such as how to finance a fleet of vehicles or how to plan an investment portfolio for retirement.

When the client’s needs are complex and there is a wide range of possible solutions, the sales consultant needs to be able to sell in an outcomes-based manner. This outcomes-based approach requires the consultant to be highly skilled in order to craft the right product and service mix to meet the client’s stated objectives (outcomes), as well as create maximum value for the customer.

The relationship between the sales consultant and the buyer does not end when the sale is agreed. There are a number of key steps after each contract (sales agreement) is signed, and going through these steps well will generally result in maximising the value each client gets from the bank. This in turn generates additional sales opportunities (cross-sell opportunities) for the bank.

The amount of customer value delivered by the bank before, during and after each sales interaction determines whether there will be continued or expanded business.

If banks aim for a greater share of wallet they must address full value. A professional approach to sales in banking puts full customer value first.



There is legislation in South Africa that regulates how financial products should be sold. This includes regulating what kind of information a person or institution is accredited to give, what process should be followed when selling, how long records are to be kept and, above all, that the sales process is honest and transparent. Customer protection is paramount and responsible selling in a compliant and ethical manner is required at all times.

These are all necessary if full value is to be provided.

Sales, service and full value

There is a growing realisation that most companies are primarily service- orientated businesses, even if they manufacture products. Says Harvard marketing guru Ted Levitt: “When we know enough about business, it becomes clear that its products are much more than what’s generally at the core of what is expected by the customer and offered by the seller.”

The product is no longer just the item itself; it includes service, word-of-mouth references, company financial reports, technology and even the personal image of the CEO and the company’s senior executives. As a result, product and service, formerly two distinct fields, are largely a single hybrid of value.

The competitive nature of banking, increased consumerism and legal compliance has required that the banking industry review the way it looks at sales and service. There has been an increasing need to move away from a focus on product sales alone to a comprehensive approach that understands customer groups and their differing needs and offers relevant products and services to customers.

The value a customer derives from a bank is not merely the product – it is the complete banking experience, from the moment the customer begins the interaction. This includes the look and feel, the people, the processes and requirements, the product itself, and the service associated with owning the product.

There is a growing realisation that most companies today are

primarily service- orientated businesses,

even if they manufacture



To make this possible, a strong focus on efficiency and effectiveness is required. The operational requirements to ensure smooth service delivery to a customer is also a key focus of banks. Can you think of a time when you wanted to purchase a product but the service experience made you decide against the purchase?

These are all-important aspects in the endeavour to retain and grow customers.

One of the most important considerations in professional selling is aligning the selling process to the buying process. How to do this will be set out in more detail later in the module.

The first step towards aligning the buying and selling process is understanding what triggers the buying process. To do this we need to be able to answer the question of what people are doing when they buy goods and services.

If we understand this, specifically in the banking arena, we have already taken a significant step towards sales professionalism, as we are able to respond not merely as order-takers but with insight into what the customer wants to achieve.

The exchange of value: The effect of sales on bank profitability We have seen that banks exist to create value for customers. Now we move on to consider the money that banks earn in exchange for this value.

It is important to appreciate that banks earn income from a range of sources. These include:

• The fees that are levied when customers use bank products and services;

• The interest that is charged on loans made – the profitability of a loan is the difference between the rate the bank pays for the money (the cost of capital) and the rate at which it is lent to the customer (the interest on the loan), adjusted for a variety of risks. Interest charged minus interest paid = net interest income;

• The capital gains and returns from investment holdings; and

• Profits made in a very wide variety of financial market trading activities.

This is not necessarily an exhaustive list, it is just a list of typical scenarios.

Banking sales create additional revenue of all these types.

For example, at its most basic level:

• Sales of new loans creates new interest income;

• Sales of new transactional accounts create additional fee income; and

• Sales of new savings and investment products generate fee income.



Transactional and savings accounts also allow the bank to raise capital that it can lend out at a higher rate in the form of new or increased loans.

Therefore, sales has a fundamental effect on bank sustainability and profitability by influencing the bank’s fee income, interest income and cost of capital for lending.

Given this, there are six main ways in which the sales function can influence a bank’s profitability. It can:

1. Increase turnover (total income) and hold costs steady (sell more loans at a particular cost of capital, for example);

2. Increase turnover and reduce costs (sell more investment products in the retail market, resulting in lower cost of capital rates than those on offer in the wholesale market, and increase deposit fee income, for example);

3. Increase both turnover and costs in a controlled ratio (sell smaller loans at a higher interest rate but also at a higher risk, keeping the risk- adjusted margin constant, for example);

4. Hold turnover steady while reducing costs (maintain the same volume of credit sales at the same risk, but find cheaper sources of capital to lend, for example);

5. Sacrifice some turnover and bring about a substantial cost reduction (discontinue a product that has become less profitable, sacrificing some business but freeing up resources to be used elsewhere more productively, for example); and

6. Alter the product mix in favour of more profitable items (encourage clients to make more use of credit card debt, rather than using cheaper, longer-term access-bond finance to cover short-term needs, for example).

The growth aims of a bank are closely linked to its profit requirements.

A decision to increase the growth rate is likely to require an increased profit, but there may not be such concern with profits if it is decided to stabilise growth. The sales function will also contribute to growth aims by such methods as:

• Obtaining new customers in an existing market;

• Breaking into new markets; and

• Gaining increased sales from existing customers (for example, by improved frequency of contact and cross-selling).



It is clear that the sales function can have an immediate and considerable impact on the profitability and growth of the bank.

To further understand the impact of sales on the profitability of bank customers, it is necessary to understand the lifetime value of a customer. One decisive sale early in a customer’s life cycle, followed by great service that retains the customer, creates opportunities for future sales that make the relationship increasingly valuable to the customer, as well as increasingly profitable to the bank.

The lifetime value of a bank customer

Once a client buys a bank product and uses the services that the product offers, a business relationship is established. This relationship has certain important properties:

• It is potentially a long-term revenue stream if it continues to meet the needs of the customer better than the alternatives the customer considers; and

• It could include multiple products that solve multiple problems and generate different types of income for the bank provided they meet the needs of the customer better than the alternatives the customer considers.

An initial relationship gives potential access to a customer for future sales, as their life and financial circumstances change. As changes create new problems (whether they are real problems or merely hopes and aspirations), new needs for financial products emerge and new buying processes are triggered.

If a bank is able to align its selling efforts with these changes, events and buying processes, it will be able to offer value to the customer and will make sales. If it cannot, it could end up irritating people more than creating value.

Considering the significant lifetime financial value of a customer to a bank, it is important to appreciate the varieties of banking revenue associated with different products.

The products a person can use over their lifetime contribute different types of revenue. While the specific types of revenue generated by specific products vary between products and banks, the table below illustrates the income that can be derived from various product types:



Product category

Possible sources of fee income (“unfunded income”)

Interest income (“funded income”)

Source of capital

Current account

• Service fees • Cash deposit

fees • Cash

withdrawal fees

• Electronic transaction fees

• Withdrawal fees

• Stop order fees • Debit order

fees • Dishonoured

payments fees • Merchant fees

for point-of- sale transactions

• ATM fees and Saswitch fees

• Loyalty scheme fees

• Only when in overdraft, at overdraft fee rate on offer

• Current account balances are cheap sources of loan funding as they typically attract little or no interest

Overdraft, credit card, personal loan, vehicle finance, home loan

• Administration fee

• Origination fee • Assessment fees

(home loans)

• At rate paid by customer

• Only if there is a credit balance on the overdraft or card

Short-term insurance policy (e.g. insurance for buildings)

• Policy fees • Underwriting

margin

• NA • Source of funding for investment reserves that ensure liquidity in the event of claims



Product category

Possible sources of fee income (“unfunded income”)

Interest income (“funded income”)

Source of capital

Savings account

• Administration fees

• Transaction fees • Cash deposit fees

• NA • Retail deposits are a massively important source of funding

Investments • Brokerage fees • Commissions

payable by fund managers

• Management fees

• NA • Retail deposits are a massively important source of funding

The table illustrates how different categories of products provide different bank income combinations.

Once a sale is made, the bank begins to earn different types of revenue that can endure for many years and can be expanded upon by creating multiple product relationships with the same client.

The graph below illustrates this:



• The graph shows that in year one the customer may not even make a profit because of the cost of the sale to the bank in time and other resources exceeds the value of the sale to the bank.

• In year two a basic profit is made.

• However, in year three the customer begins to contribute other forms of revenue: s/he begins to increase the balances in his/her accounts, giving the bank an opportunity to earn more money on the deposits.

• S/he begin to open more accounts – i.e. purchase further products – generating fresh fee and interest income, for example from opening savings accounts, using housing finance, etc.

• The cost of operating one client as opposed to multiple clients reduces as the time and effort invested in one customer is increasingly rewarded.

• The person refers others to his/her bank if s/he is happy with the products and the service – for example, children may open savings accounts, and employees or family may use other services, etc.

• The price premium means that the person may be enticed into purchasing more expensive premium services from the bank, such as private banking, which may mean that a price premium can be charged.

Over time a relationship with one client can become ever more profitable.

Although the first sales challenge is to acquire new clients, the second sales challenge is to maximise the lifetime value contribution of a customer to a bank. It can do this only if it continues to create value for the customer by helping the customer solve the problems that financial products are designed for. The longer a customer stays with a bank, the more profitable s/he becomes.

This understanding of the lifetime value of a customer lays the foundation for a proper understanding of the sales objectives in banking.

Sales objectives in banking

There are a range of sales imperatives or objectives that must be achieved in banking. In a sales role you could have responsibility for any combination of these types of outcomes.

Generally, business theory teaches that there are three types of sales objectives in any business:



Type of objective

Definition

Increase users • Increase user’s means to increase the number of people using the products so as to derive new revenue from an increased customer base.

• The only option for banks in this regard is to acquire (“bank”) previously unbanked people, or acquire business from existing customers of other banks.

• An example would be to open a point of representation in a rural setting and gain entry-level banking customers.

Increase usage • Increasing usage means persuading existing customers to use a product more frequently.

• An example would be for Bank A to persuade customers to use a current account (already held at Bank A) for salary deposits and debit transactions, where the account may have been dormant.

Increase uses • This would be to encourage an existing user (customer) to use your bank’s products to solve other problems.

• An example would be for Bank A to encourage a current account holder to use Bank A’s home loan when they buy a house.

Bank sales objectives will typically try to increase revenue through all these means. The aim of the sales consultant would be to apply professional selling to meet these objectives.

The complicating factor is that many people have relationships with multiple banks. Banking sales take place in an extremely competitive environment and the bank has to compete for its share of the customer’s business: the “share of wallet”.

Share of wallet It is more profitable to sell five products and services to one customer than one product or service to five customers. Customers who use a number of products and services are also more likely to remain customers.

Therefore, banks compete for what is known as “share of wallet”: gaining a greater share of the financial services business that a customer generates.

Here is a typical diagram of the banking relationships of a hypothetical customer in the middle segment:



Who is taking care of this customer’s financial needs?

In this diagram:

• Each bubble represents a different bank.

• Each bank has a certain share of wallet. That means multiple banks have this customer for various products and derive some revenue from the customer.

• The primary banking relationship is the account into which salaries are paid and which is used to make most day-to-day transactions.

• The customer has other relationships because the primary bank has not been able to offer value at the points the customer was engaged in buying processes to meet needs other than the most basic financial ones. These points will have related to changes over time and life-cycle-triggered problems and needs.

• The client has a dormant account with another bank. That bank believes it “has” this customer, because their name is on its books. But it has not succeeded with this relationship because there is no activity on the account.

• These relationships do not reflect the relative value of the various products. They simply reflect how the customer bought when problems or needs emerged. When the customer bought a home loan it was bought through an originator. A second bank offered the loan at the best rate. The primary bank will probably not even have known that it was bidding for a loan to one of its own customers!

Note that other service providers will probably also have a share of wallet of this customer – a life insurance policy not affiliated to a bank, a short-term insurance provider, an asset manager looking after investments, a credit provider who financed a particular asset, another credit provider that issues a white-label store card for a clothing chain, a forex merchant that is conveniently situated, etc.

Current account,

overdraft, credit card, basic savings

Retirement annuity,

investments

Home loan and buildings insurance

Hypothetical customer

Dormant current account

Vehicle finance

Deposit on call



This clarifies the sales challenge in banking. Banks often compete against other banks that also have relationships with the same customers.

The importance of cross- and up-selling

To increase share of wallet and derive further revenue, banks do not only want new customers – they want to “cross-sell” other products to the same customer to increase the lifetime customer value. They want to “up-sell” or increase the value of their current products by encouraging customers to buy curtains for their new home on their bond finance, for example, or by encouraging them to meet all their needs from one bank by using cross-product loyalty schemes that incentivise use.

Customer relationship management

To keep buyers happy (meeting their expectations), the salesperson needs to maintain constructive interaction with his or her customers, which includes maintaining a relationship that involves managing complaints and future needs. Repeat business will go to those sales professionals who have done the best job to nurture these relationships.

Not all products and services require the same degree of relationship cultivation; the longer the period of time over which the service will be extended and the more complex the product being sold, the more attention the seller must give to the relationship.

It is also not cost-effective to dedicate resources to cultivating relationships in all segments. Lower-income, mass-market segments are typically far more product-orientated than relationship-orientated. On the other hand, private banking offered in wealthy segments is very relationship-orientated and involves a high degree of personal service. It is extremely expensive for a bank to offer this, and it must therefore be worthwhile for the bank in terms of the income the exchange of value produces. Private banking is an example of this.

The relationship between a sales professional and a buyer seldom ends when the sale is made. Increasingly, the relationship intensifies after the sale and helps determine the buyer’s choice the next time around.

Managing and nurturing relationships should be synonymous with banking.

Overall, therefore, the sales function and the service associated with nurturing a relationship with the client throughout their life adds value to the client by way of satisfying clients’ needs through helping clients to manage their finances efficiently and effectively, and thereby create wealth for them.



The buy-alignment model Piecing together the different elements of the sales acumen cluster, we begin to see the following picture emerging:

This diagram depicts the act that effective selling results in when there is alignment between the seller, the bank and the customer. The seller creates value for the customer by educating the customer on the nature of the problem and the best solution to it, while the bank creates value for the buyer by providing products that solve problems.

The bank and the seller are aligned by virtue of the employment contract and how the bank enables the seller to perform in the selling role.

The key to this set of relationships is that, if they become skewed, the exchange of value does not take place as intended. If the seller is pushing product and not selling the solution, the exchange between the buyer and the seller becomes skewed and less value is created for the buyer. The seller is working in close alignment with the bank, trying to reach targets, but not in close alignment with the customer who is not actually interested in product, but rather in the solution of the problem that the product was designed to solve.



Conclusion Professional selling in banking has become an important business requirement.

Banks that can sell better will create a greater value banking experience for their customers. That will result in a competitive advantage.

Great selling is customer-centric and helps customers solve financial problems with bank products.

Great selling focuses on the exchange of value for the client, to whom value is first and foremost the resolution of the problem that made them buy in the first place.



Section 5: Aligning to the bank (ii)

The selling system Bank sales are achieved by a complex system with many interacting parts.

This module teaches aha selling to enable sales employees who are part of that complex system to become professional and to achieve great results.

As an introduction to understanding how to apply aha selling techniques in a bank, it is important to understand the complex selling system, which includes all the parts of the bank that are necessary to make a sale. This helps to bring the tasks of the sales consultant into focus.

The banking sales system

To understand sales (as a science) it is useful to visualise the components of the sales system. This allows branch or sales managers, sales team leaders or supervisors and sales professionals to better understand situations that occur or initiatives that are driven by the bank.

Support functions

Business strategy

Sales management

and leadership

Sales

professionals

Customers

Bank sales and service system

(capacity)

Bank products

systems

As the diagram shows, the sales system in a bank has a number of components.

These systems all interact to produce sales excellence.



System component

How it influences sales

Customers • They interact with the bank all the time, solving a range of problems with bank products.

• They can be divided into different types of groups – income segments, geographical groupings, product use groupings, life stage groupings and so on.

Business strategy

• Marketing strategy defines the markets to be focused on, and how they are to be segmented and addressed to generate interest and opportunities.

• Sales strategy defines how the sales channels will be configured and operate within the various markets and channels.

• Territories are defined, targets are set, sales forecasting is used, reporting is implemented, team development takes place and a range of other management activities ensure that sales is focused and effective.

Sales management and leadership

• Results are the main consideration. • Sales management and leadership focuses on all that is

necessary to achieve results on building business capability and delivering results with that capability.

• This includes planning, monitoring performance, focusing resources and efforts, driving sales campaigns that focus on specific segments and/or products and/or areas or local markets, and building the sales team.

Bank products systems

• Produce the bank products and packages that the business sells.

• May include distinct product supplier units, or “product houses”, as they are sometimes called (e.g. home loans, vehicle and asset finance divisions, etc.).

• Product IT systems and processes form the administrative backbone.

• Loyalty schemes encourage product usage and customer retention, and are designed to drive up the lifetime value of a customer by increasing users, usage and uses.



System component

How it influences sales

Bank sales and service system and associated processing functions

• Channels are the means used to make sales and deliver service.

• Sales channels and service channels include physical branch networks, agencies and other points of representation, as well as virtual banking networks such as call centres, mobile banking and internet banking.

• Different channels have different features and benefits from a customer’s point of view, and different cost structures from a bank’s point of view.

• There are also back-office functions that support the sales channels – these could include the credit function, cash handling and transaction processing operations.

Sales professionals

• Sales professionals are the people who interact with customers.

• They have the skills, tools and processes to make sales.

Support or enabling functions

• The risk management system includes the risk and compliance functions, etc. They ensure that the bank does not expose itself to undue risk in the course of business and that it stays within the law.

• Other support functions include HR, L&D, finance, etc. All of these functions have a role to play in enabling sales to achieve its objectives.



Conclusion Excellence in banking sales does not emerge from the superhuman efforts of sales professionals.

It emerges when a complex system consisting of multiple components works together.

The implication of this is that the sales consultant role works in harmony with other parts of the banking sales system, as well as the service delivery system.

It is not possible to understand the sales consultant’s role without this kind of holistic picture.



Section 6: Aligning to the bank (iii)

Sales management in the selling system Introduction

Banks have a variety of systems and processes for managing sales. These include methods for planning for and reporting on sales.

It is important for the consultant to be aware of good practice in sales planning and reporting.

Many salespeople find themselves embedded in the sales system, being managed but feeling disempowered because communication does not convey the reasons for decisions and initiatives. This can leave them feeling disempowered.

The best solution is for salespeople to take command of their own empowerment and build up a mental picture of how sales is managed, thereby gaining insight into decisions and Initiatives, and building up a further element to their positive cycle of self-efficacy.



Sales management Sales management consists of a number of important tasks. The diagram below gives an indication of the tasks of the sales management function:

We will discuss the role of sales management more pertinent to the aspects of selling, service and products in this section.

Sales territory management

The definition of a sales territory is as follows:

“A sales territory consists of current and potential customers, for whom a designated salesperson is responsible at a particular time.” In many banks today, a territory could be a portfolio of clients rather than a geographic space.

Sales territory (portfolio) management

Sales forecasting and budgeting

Sales planning process

Recruiting, selecting training salespeople

and Motivating salespeople Leadership and

supervision (Incentives)

Performance evaluation and reward for good performance



Regardless of how the sales force is organised, the management of the salesperson’s time and territory starts with the company’s objectives and the role personal selling plays in attaining those objectives. The size of the sales force is influenced by the role of personal selling in the marketing mix, the sales unit’s budget and the need for a sales force as determined by the sales forecast. Once the total sales budget and the total size of the sales force have been established, then certain other decisions must be implemented. The results of these other decisions, in turn, affect both the sales budget and the size of the sales force! Of course, the whole process must also be commensurate with the top management’s objectives.

Another important decision is the whole issue of distribution – that is, managing the territories in which salespeople need to operate. It would not be appropriate to leave territory to chance. All it would do would create conflict and unfairness in the sales operation.

The sales manager needs to optimise the most effective distribution channels. For example, if the bank is selling funeral insurance, it is likely to use the medium of a telephone, whereas if the bank wishes to sell a personalised share portfolio management service, it would only be done face-to-face by a specialist in that area of expertise.

The benefits of territory management

• The territory is more efficiently and effectively managed; • Optimum time will be spent with each class of potential client, thereby

optimising sales; • Customers receive and use most relevant products, optimal to customer and

bank; • Sales costs should be reduced; • Management will have benchmarks with which to compare their

performance in the marketplace and against their competitors; and • One should obtain maximum results from the territory.



The basic procedure for designing a new territory

Here are some of the factors that should be considered by the sales manager:

• The territory should have sufficiently large potential that a salesperson can make a good living working it. The potential should have sufficient credibility that it can be sold to the salesperson;

• The salesperson should be able to work the territory efficiently and economically – and the company should make an adequate return on that investment;

• If possible, the territory should have a number of ongoing accounts that are easy to sell. If all the accounts or potential accounts are tough to sell, it is difficult to keep any salesperson motivated;

• The territory should be sufficiently compact to minimise overnight travelling; and

• Income opportunities in each territory should be approximately the same, to minimise conflict.

The difference between today’s site selection process and yesterday’s is that banks need to be smarter and more cost-effective in their choices of distribution channels when selling to and servicing their target markets.

1 • Identify the number of current and potential

customers that make up a territory or portfolio;

2 • Prepare a customer analysis within the territory;

3 • Prepare a salesperson workload analysis;

4 • Design the sales territories including the actual

sales routes; and

5 • Apportion territories to salespeople.



Large banks recognise that to cut costs and align delivery channels to emerging customer preferences is a number-one objective.

Cognisance may also have to be taken of the following:

Unprofitable customers have to reduce their personal transaction frequency and increase the use of the bank's technology whereas profitable customers should receive more value for the high revenues that they provide.

Banks have to downsize their distribution capacity and determine at the same time how to provide important contact points to service their most profitable customers. This means that a sales manager will no doubt have more ATM access points or more face-to-face contact, but at a lower net cost than the traditional branch distribution system.

Using in-store branches to expand a distribution allows a bank to enter a market where a captive audience is easily accessible. The sales manager must also not forget that the location of a point-of-representation has a significant influence on the products or services customers will want. Lifestyles in the different areas will be different. What is important here for the sales manager to grasp is the need to ensure that the right salesperson services the right area. In other words, there must be a match in terms of professionalism, knowledge, expertise, and social and communication skills.

Demographics, customer behaviour, potential profitability, product usage, distribution access preferences and proximity of competition are some of the components for selection of a salesperson for a particular territory.

The process today is much more complicated than previously, and a sales manager’s job in this regard is probably more complicated than in many other industries.

There are a number of reasons for the target market to be divided up into sales territories:

Market coverage

The sales manager must ensure that all of the current and potential customers mentioned in the definition of a sales territory are covered by the salespeople.

Workload equalisation

Each salesperson should have an equal workload to be fair;

Morale

A salesperson takes possession of their territory and usually s/he becomes very protective about the sales territory allocated;



Evaluation and control

Only with the assignment of a territory, no matter how designated and structured, can the outputs of a particular salesperson be monitored against performance objectives. Without the ability to monitor, it is impossible for the sales manager to evaluate performance;

Analysis and planning

The sales manager needs to be in a position to analyse all the actual performance criteria by the salesperson, which means that the inputs and the outputs per salesperson can be conveniently worked out via assigned territories where costs, sales, enquiries, and so on, can be allocated;

Focus of effort

With an assigned territory, a salesperson can concentrate his or her efforts within defined boundaries. He or she knows what is happening in the area and does not dissipate efforts over too wide and undefined an area;

Disputes and conflicts

With each salesperson operating in a territory, any disputes as to whether a customer/sale belongs to one or the other is easily identified. There are occasions when sales may be shared between one or more salespeople. For example, if a customer has a banking account at a Durban branch, but happens to be visiting Cape Town and is sold a financial product in that area, there may well be potential conflict. It would of course, depend on how the bank has laid down its policy regarding “poaching” or “encroaching”, as it were, but without any physical borders or territories drawn up in the first place, conflict could not easily be resolved. In this case, the sales manager can resolve the problem of shared commission or fees by allocating a percentage of the fees generated by the sale in proportion to the efforts made by each salesperson.



Customer service and calling programme With each sales territory being allocated to a particular salesperson, the sales manager can ensure that all customers and prospects should be called on in proportion to the potential business available. Leads generated can be allocated to a particular salesperson for attention.

The key to reaching the sales potential of any given territory is management – the management of both the salesperson’s time and the territory. The optimum time must be spent with those customers with the greatest potential.

To reach that optimum period, a systematic process coupled with information must be used. This process involves an analysis of the specific territory’s potential, identification and classification of prospects, analysis and development of the workloads, the determination of how many salespeople the territory should ideally support and the territory’s actual boundaries.

The emphasis must be on helping the individual salesperson work smarter, rather than harder.

Sales territory design, development and allocation While electronic and telephonic channels are available to clients, there are still many products and services that can only be sold (especially wealth/investment products) face-to-face.

A sales territory is not necessarily a physical location or place. Obviously the banking branch, business unit or outlet or some point of representation from which the salesperson operates, will be in the physical area in which he or she operates. However, the “sales territory” may well be the number of banking accounts that the salesperson is allocated to service and cross-sell, rather than physical.

For prospecting, however, the salesperson may well be given a certain physical area to find prospects, or be given a number of names of businesses, for example, taken from a business directory. It would very much depend on the bank and how it is structured. As with so many of the other aspects of sales management in banking, you would be wise to find out how the sales territory is divided or serviced in your business unit.

Although the remaining aspect of this module will primarily refer to place, allocation could, of course, refer to cheque accounts, or home loan accounts held at the point of representation, or any other type of accounts.

Before any changes or new territories are affected, there must be good communication with those involved. It is far less trouble to discuss the benefits of the proposed changes prior to the introduction than to explain after the fact.



Explanation of the thinking behind the establishment of formal territories will gain the support and confidence of the sales team and carry their support for the changes.

Salespeople defined

Banks generally require three types of salespeople and this will affect or help to decide how the sales manager defines his territories:

“Ticket” salesperson

This may be a strange name to call a salesperson in the bank, but refers to those salespeople who service a certain market (i.e. certain profile of a customer) in a certain way. Because the customer is not considered a high-profile customer, but still needs to be serviced, the kind of financial products sold are not of a complex nature. Perhaps the client requires a credit card, a small loan or a funeral plan.

Banks usually apply some form of “scoring”. This means that there is a form that the bank salesperson fills in by means of asking questions on the form and then “ticking” the answer alongside it. The “ticks” represent a score and these are then added up. If the score totals to the bank’s requirements, then that person is granted, say, a credit card with an applicable limit. An example of a question is, “How long have you stayed in your present home?” Obviously, the longer you have lived at a particular address, the higher the score, because it indicates stability and the risk to grant (or sell!) the credit card is less. “How much do you earn?”, “Do you have parents living here?” are all examples.

These salespeople, therefore, do not need a lot of expertise or problem-solving skills, or need to make a decision. The scoring on the card does that for them.

These salespeople do need to know relevant products and the features and benefits of those products or services.

The name “ticket” is not necessarily accepted industry terminology and is simply used to describe the duties of certain salespeople.

Sales consultants (also known as customer consultants in the industry)

Again, the terminology is different in every bank, assuming they do have the segmentation of selling referred to here, but so-called sales consultants tend to have more knowledge and tend to be more experienced. They are primarily interested in cross-selling the bank’s products or services to existing and new clients. They concentrate on the average banking client (average income customers) to ensure that they have as many of the bank’s products and services as they need. The more products and services that a client has with a particular bank, the more difficult it is for that client to “leave” the bank. That is their goal.



Relationship bankers in sales and service, for example, relationship managers/private bankers and/or financial planners.

These salespeople are especially appointed for their expertise in investments, knowledge of banking products and level of sophistication in dealing with high- net-worth clients. Their objective is, of course, to ensure that the client buys as many of the bank’s products or services as possible, by cross-selling, but their primary aim is to ensure that the customer’s head is never turned towards the competition. This takes a special amount of effort in building up a relationship with the client and literally being his or her overall “financial adviser” and using the bank’s product support divisions in the customer’s best interests.

Other considerations

• Competition – The intensity of competition is important. The more intense, the greater would probably be the requirement to meet it.

• Intensity of market coverage – Should it be intense, or should the market just be skimmed? This would be affected by the types of customers and sales potential of each territory.

• Market potential of a market segment – To assess the sales potential, the sales manager needs to know what the market potential is.

Territory allocation

There are four main goals that need to be achieved in this respect:

• Complete coverage so that each and every possible user/consumer of the product or service is identified and recorded.

• A sequence of calling on clients planned for each day in order that calls are made with the minimal amount of time spent travelling from call to call.

• The calling sequence ensures the maximum productive selling time in each day is spent face to face with customers and prospects. Every call or visitation must have a finite objective – or it should be questioned why it was made in the first place.

• The calling plan should incorporate a measure of flexibility to allow for the emergency calls that are unavoidable in ensuring customer satisfaction. The plan should allow for calling within the route according to the size and importance of the customer. Some customers need calling on at different frequencies depending on their sales potential, i.e. different times of day and different days of the week and even varying weeks in the month.



Like salespeople, customers must also be assessed as to the positive contribution to the benefit of adding value rather than costs. Some customers provide the bank with a positive contribution (profit) others may contribute negatively (make a loss). It is important to understand the profitability of your customers and adopt your sales plans to your sales territory accordingly. A lot has been said about profile and segmentation already and this is simply a reminder of its importance.

Territory today

By blending self-service electronics to high technology with “high-touch” personal service, banks are attempting to satisfy all their customers’ distribution preferences. The cost of sending people out of the traditional banking branch to interact with clients is high and can therefore only be applied in the area that will make a profit.

This is why private banking is able to deliver high-touch relationship/contact with clients: their profit margins on the placing of wealth-type investments and fees for managing clients’ equity portfolios are more than a retail bank will make on charging service fees, etc. for managing transactional banking.

Perfect territory design

The perfect territory design must provide:

• Effective, regular and efficient field sales service within any sales area, no matter how defined and on what basis;

• It must also ensure that there is a clear definition of customer assignment as well as territorial boundaries;

• The balance between territories of travel requirements, active customer and potential accounts;

• A method of determining the number of salespeople that would maximise the sales unit’s contribution to profits;

• A basis for fair and equitable evaluation of each salesperson’s performance which provides the foundation for a sound compensation programme.

Management information systems The sales manager in a business unit or outlet will have in place a management information system that can act as an early warning system that will alert him or her to any area of operating responsibilities which is in need of specific attention. Perhaps costs are rising or being incurred for justifiable reasons, but whatever they are, these matters must be given attention quickly before they become major problems.



The kind of management information that a sales manager requires:

• Database of clients organised in customer segments; • Database of clients broken up into sales territories; • Sales targets per territory for the year (or whatever time period is chosen); • Sales targets broken down into months or quarters or weeks (as the sales

manager wishes to monitor sales); • Sales target – per product, per customer segment in each territory; • Sales territories matched per salesperson (per product and expertise, per

customer segment); and • Sales budgets with income/costs broken down per territory or business unit.

However, the sales manager wishes to have the information to monitor the progress of the business unit.

The important point here is that there should be sufficient systems (be it Excel spread sheets only!) to allow the sales manager to manage the business unit. Without this kind of information, the sales manager would be hard pressed to run an efficient sales operation.

Sales forecasting, targets and budgets The sales forecast is the starting point for the short, medium and long-term plans of a company. In the short or medium term, the sales forecast is the basis for determining a company’s production schedule. In order to fulfil customers’ orders, a minimum production schedule must be maintained.

This, in turn, means that certain raw materials, semi-finished materials, and/or parts, as well as the necessary tools and labour must be available when needed.

For example, today it is too expensive to maintain a large inventory of finished goods – expensive because of storage, deterioration and money invested. Such an imbalance may also result in laying off people and/or selling goods at a loss.

The financial director must continually predict the flow of cash in order to pay accounts. The sales manager assigns individual sales targets to the various salespeople or sales units. These decisions are all based on sales forecast. In the long run, the company uses sales forecasts to determine what new facilities will be needed, what skilled labour will have to be hired or trained and what funds will have to be planned for or borrowed.

When the product is a physical one, it seems quite simple, but what about financial services?

While there may not be physical products to make up an inventory, there are definitely sales targets for salespeople to achieve. The products and sales- related services have to be sold and, as such, sales forecasting has to be done.



The official sales forecast is the means by which the business converts the uncertainties of its market environment into the specific goals and plans for operating the business.

There are many variables that affect the bank’s sales: it’s the marketing mix, competitor activities, the structure of distribution, legal restraints, costs, technological change and general industry demands – which, in turn, are affected by economic, ecological, sociological, cultural and psychological factors. Any sales forecast must, in some way, reflect the influence of these variables.

Forecasting terminology

Many of the terms used in sales forecasting are used interchangeably and too often haphazardly. In order to have consistency, a number of the more commonly used terms are defined below:

Market potential Market potential is the maximum possible sales of a given product, product line or service by all possible sellers in a given territory during a given period of time.

Sales potential Sales potential is the maximum possible sales of a given product, product line or service by one business in a given territory during a given period of time.

Sales forecast Sales forecast is the actual estimate of either rand or physical unit sales of a given product, product line or service by one business under proposed marketing plans and under an assumed set of economic and competitive conditions, in a given territory during a given period of time.

Sales targets Sales targets are the sales goals, in either rand or physical units, of a given product, product line or service assigned to a particular individual, or part of the sales force in a given territory during a given period of time.

Market index Market index refers to a mathematical expression of one or more market demand determinants that influence the market potential for a given product, product line or service.



Sales forecasting process

The ultimate goal of any sales forecast is to obtain the best estimate of future sales that can be made from present knowledge. There is a process that has to be followed for sales forecasting:

Set the objectives for the forecast

Marketing would want to answer the following questions: What is the purpose of the forecast? For what will it be used? Is the forecast meant to estimate the potential of its market that the bank plans to enter in the near future? Or is this forecast designed to show cash flow for budgeting purposes? How accurate does the forecast have to be?

Make a preliminary forecast

This preliminary sales forecast may be made in a number of ways. It involves starting with the known – past and present sales – and working towards future sales. It may involve the whole country, industry or business or various geographic, product or customer entities. This simple projection is made into the future, based on the past.

Modify on the basis of internal changes

What is the company going to do differently during the forecast period compared to the past? Will new products be introduced? Are prices going to be raised or lowered? Are new channels of distribution or new or additional outlets going to be used? Will promotional marketing costs be more or less? Are more salespeople required? Will more training make a greater effect on sales?

Modify on basis of external change

What is happening to the national, regional or local economy? Are general economic conditions improving or deteriorating? What is the competition doing? Are new competitors moving in, or are some going out of business? Are they introducing new products? Are they lowering or raising prices? Are they expanding into new channels or outlets? Are they going to initiate a new and larger advertising campaign? Will they be hiring more salespeople?

Adjust preliminary forecast

Based on the changes that will or should affect company sales during the projected future period, the original forecast will need to be adjusted.



Compare the resulting forecast with management sales and profit objectives

Do the projected units and rand sales meet management’s objectives? Will the profits of the sales be sufficient? If the forecast of sales and profits do not meet management’s objectives, then some hard tough decisions have to be made. Either management objectives have to be lowered or plans have to be made for increasing the business sales and profits beyond those or reduce the forecast.

Review and evaluate

A sales forecast is not a static instrument. The conditions under which the forecast is made are constantly changing. As conditions change, either internally or externally, adjustments should be made and/or or additional steps should be taken to meet the business objectives.

Banks use several specific techniques to forecast the sales and all forecasts are built on one of three information bases:

1) What people say:

Involves surveying the opinions of buyers, or those close to them such as salespeople, or outside experts. Information is gathered using three methods, namely surveys of buyer intentions, composites of sales force opinions and expert opinions.

2) What people do

Building a forecast on what people do involves another method – that of putting the product or service to test in the market place to assess buyers’ response.

3) What people have done

Involves analysing records of past buying behaviour or using certain kinds of analyses. The objective of the sales manager is to co-ordinate and to provide a basis upon which a number of other plans within the bank can be determined. This forward planning provides for the requirements in terms of money, equipment, premises, products and manpower to be brought together effectively.

The sales manager needs to use all forecasting tools available to him or her, but in the end, the skill lies in limiting the amount of errors.

The sales forecast is the hub around which the process of this planning revolves. Sales management’s first task is to determine what is likely to sell, to which market and when. Sales potential, and to a lesser extent service or product capacity, sets the scene for the entire sales planning process.



The sales forecast attempts to answer the question: “What can this business unit reasonably expect to sell in the next year and in need in the following number of years based on my research of the market?”



Specific forecasting information to be assessed

Economic trends

A comprehensive review of world economic trends and the potential impact of South Africa’s own economy and fiscal situation (the tax implications) are given and a sales manager will have to understand the impact that any of these factors may have in his or her own identified markets. For example, a change in interest rates will seriously affect home loan sales (if this were not factored into his or her forecasts); a drop in the share market such as was experienced during the 2008/2009 worldwide recession, will affect investors in this market.

Competition Every sales manager should keep information on the other competitors affecting his/her area and industry and should be able to make a well-founded forecast on the likely moves of the competitors and how these moves could affect the planning. The sorts of things that the sales manager needs to look out for are:

• The range and depth of products and services offered; • Where the offices are located, how long they have

been there and the capacity and productivity of the operation;

• Their levels of experience; • Price competitiveness; • Advertising and promotional effectiveness and

merchandising at the points of representation; • Effectiveness of their sales force and sales distribution;

and • Market share or potential market share.

Customer profiles

Customers’ needs are always changing and should be given ongoing attention.

Past sales records

The importance of sales statistics, by territory, by salesperson, by customer class, is crucial. The balance between past sales targets and achievements should be noted. Equally important are the definitions of and allowances for seasonal and cyclical demand, although this may seldom affect the financial services industry. The sales manager will have to consider and evaluate the sales used in achieving those past results as well as the necessary resources to maintain those results.



Conditions that already exist internally

Conditions that exist within the bank will impact on future sales efforts, restructuring or motivation, as will the state of the premises. The scale and capacity of the entire workforce, changes to products and services and any innovations, will all have a part to play.

Secondary data

As you already know, secondary data can be available externally as well as internally and we have already focused on past sales records.

Resources Of particular interest to the sales manager will be the nature of the labour market. The sales manager’s ability to attract and hold capable employees is essential to the success of the business unit. However, the bank’s recruitment and selection policies are often influenced by the nature of its operating environment. The sales manager’s access to needed personnel is affected by the bank’s reputation as an employer; remuneration offered and the ready availability of people with appropriate skills.

Review and update

The sales manager should always review the actual results achieved at the end of the forecast with the forecast figures. This will enable him/her to evaluate the reliability of the data and method used in creating the forecast. In this way, there is an opportunity to identify areas, discover new integrated information between data and learn what to do and what not to do in future forecasting exercise.

Comparison with total sales

This test consists of a simple comparison of projected and actual sales by units, rands and percentages. Certainly benchmarks should be set. Since absolute accuracy is improbable, tolerable limits must be established. Subsequent forecasts should decrease the variations.

Comparison with actual change in total sales

In this test, the predicted change in sales for the forecasted year is compared to the actual change. The results may be stated in units, rand value or by percentages. This comparison may actually be more crucial that the comparison with total sales.



Managing the sales force Motivating the sales force

Sales executives in general have over the years assumed that the best motivator for a sales force is money. But behavioural scientists have indicated that after some individually defined standard of living has been reached, additional money is not a proper motivator for improved performance.

The key to motivation is to recognise that each person is different – each salesperson is different and each salesperson may be going through a different phase in his or her life. So rewarding and motivating each salesperson needs to be done on an individual basis. Salespeople therefore cannot all be treated the same. What motivates one salesperson today may not motivate that same person tomorrow. However, measuring performance has to be strict in terms of evaluating people fairly for what they have achieved, irrespective of their personal situations. While those situations need to be correctly and empathetically managed, reward or compensation does not follow if the job has not been successfully performed as set out in the business plan/job description.

Performance evaluation

There are seven areas of performance evaluation that will be important to the sales manager:

• To monitor sales performance; • To plan the development of salespeople; • To discover factors that contribute to superior sales performance; • To provide a logical base for promotion, development and remuneration

adjustments; • To forestall potential problems; • To facilitate the total sales management process; and • To improve attitudes and lift morale.

Performance evaluation is a key aspect of management. To be successful, the evaluation of performance process must be a part of the formal sales plan. The sales manager is constantly striving to discover the magic formula of success and then to encourage the other members of the team to use the same techniques. The sales manager must ensure that the evaluation procedures are not based on any elements of favouritism or subjective opinions. The process should help with the early identification of potential problems. Weaknesses can be eliminated and deficiencies corrected.



Evaluating performance

The results of good performance evaluations will empower the sales manager to take corrective actions early, in anticipation of future needs in all aspects of sales unit responsibilities, especially training. Effective sales performance evaluation makes a material contribution to the morale of the sales force and it will have a profound influence on the discipline of the business unit.

Orderly behaviour is an essential ingredient in an effective, vibrant sales unit. It is up to the sales manager to establish the acceptable standards for his or her unit, with consistency being a key element. Timeous discipline is necessary to earn the respect of the team and a respected manager will always get better results from the sales force that knows exactly where it stands.

There are three broad types of performance evaluation:

1) Informal monitoring

The monitoring of the regular daily activities of the sales force takes place on the job and it is unstructured and informal. The sales manager can then take whatever action is appropriate in the circumstances.

2) Routine evaluation

Routine evaluation is carried out periodically – probably at monthly intervals on an agreed day of the month. The sales manager will review the past month’s sales volumes against the targets and costs incurred. This would be relatively formal and structured and will include the measurements of actual performance against targets and performance norms. The evaluation would be a two-way discussion, with both the sales manager and salesperson agreeing on corrective measures. They will be recorded, implemented and the progress reviewed at the next month’s routine meeting.

3) Formal reviews

This is highly structured and should take place at least once a year, normally bi- annually. A great deal of planning is required and each person is reviewed according to a structured appraisal.

An appraisal not only looks at sales performance in tangible forms, but looks at the behavioural issues also, such as communication and commitment. It also includes the key result areas that were to be achieved by the salesperson and any training that had to be undertaken during the year. If these key result areas were not achieved, reasons have to be given why and obviously the problem will have to be addressed in the following year’s key result areas.



Criteria for performance measurement

The salesperson’s performance in all areas is measured overall in terms of efficiency and effectiveness.

Effectiveness

This is the achievement of objectives that are set for the salesperson and discussed in the formal review. In other words, how well were the resources allocated used with regard to the salesperson’s overall performance in his or her main areas of responsibility (key result areas).

Efficiency

This is the use of his or her time, expenses and effort. The detailed criteria that a sales manager would typically analyse, could include the following:

• Actual sales results versus budgeted sales; • Internal relationships within the business unit and outside of the business

unit; • Customer relationships; • Job and customer knowledge; • Competitor awareness; and • Personal characteristics and attitudes.

The performance evaluation can only be carried out after:

• The business unit’s sales policies are established; • The acceptable performance standards have been established; and • Detailed items have been covered, namely:

1. Inputs

• Number of sales appointments made and kept (if out on the road); • Effective sales calls made per day (leads turned into sales); • New prospects identified with sales potential assessed; • Number of sales presentations made where appropriate; and • Number of sales quotes given.

2. Outputs

• Number or value of products and services sold; • Number of cross-sells achieved; • Percentage of various targets achieved; • Measured as a value % of the business brought in; and • Average value of sales.



Essentially these are the basic performance evaluators which can be evaluated only after the evaluation policies and standards have been established and accepted by the head office sales management team.

The sales team must know what the basic performance evaluators are and there must be no lack of clarity and no points which are subjectively interpreted. The sales manager will need commitment from the entire sales team – internal and external – to the achievement.

These inputs and outputs will vary from bank to bank and probably even from one business unit to another.

Again, it would be in your interest as a student of sales management to ensure that you explore how your bank measures performance with regard to sales.

Principles of evaluation

The five evaluation principles that the sales manager should employ in performance evaluations are:

• Planned evaluations that team members are aware of, not unexpected or sprung on team members;

• Constructive, to establish areas that are in need of improvement; • Motivating and stimulating with the goal of acknowledging good

performance and opportunities for improved performance; • Informative, by providing a platform for two-way communication; • Participation by involving the salesperson in the evaluation discussion.

The salesperson should never feel threatened as performance measurement is a way of differentiating the better performers from the poor performers. Banks are paying for good performance and the salesperson therefore has a good chance of regularly improving his/her salary and benefits.

The sales manager should set down a number of ground rules to ease the tension of the evaluation procedure, which is:

• The sales manager needs to evaluate his or her own performance first, for example, “Am I contributing in a meaningful way to help my sales force get sales?”

• The sales manager should take the time and the trouble to establish a relationship with his entire team long before the perceived ordeal of an evaluation.

• The sales manager should develop the skill of active listening.



• The sales manager should build on the salesperson’s strengths. It is totally incorrect to adopt the principle of destroying a person prior to building him up.

• Rather, the sales manager should start at the level the salesperson is at, and develop from there – upwards!

• The sales manager should always be honest with the salespeople.

Compensating the sales force

The specific objectives for a compensation plan (possibly incentives) depend on the particular needs of both the business unit and the salespeople.

Needs of the salespeople

Equitable

From the standpoint of the individual salesperson, any compensation plan should be equitable in at least three ways:

• It should be equitable internally – that is, in relation to compensation paid to other employees;

• The compensation should, at a minimum, be comparable to that received by salespeople working for direct competitors; and

• The compensation received should be commensurate with both the amount of effort expended and the results obtained from such effort. Remember to take service issues into account as part of the sales plan.

Stability

It should protect salespeople from loss of income to some degree due to circumstances beyond the control of the salesperson. This should be taken into consideration.

Provide incentives

Every salesperson should have the opportunity, through greater and/or more effective effort, to earn compensation beyond that provided by the regular plan. Superior performance should have its rewards.

Needs of the company

• Attract and retain staff • Encourage specific activities

Through effective management of the sales function and salespeople, companies can encourage good sales performance. This should be adequately compensated for, for example, incentives could be used by a business unit to encourage selling to profitable customers, selling products and services with higher margins, taking note of the restrictions under the Financial Advisory and



Intermediary Services Act (FAIS), performing essential services such as educating clients on the use of products, and very importantly, ensuring the customer receives excellent service.

Competitions

When salespeople attain success and meet objectives, such achievements should be recognised and positive behaviour reinforced. The rewards and recognition that come from winning a short-term competition can provide such reinforcement. The recognition comes not only from the company and peers but also from family and friends because the prizes can be taken home.

Most sales managers would incorporate some form of competition in their annual planning and budgeting. The measure for success of any competition depends totally on the ability of the sales manager to generate a spirit of friendly rivalry among the team. It is generally accepted that salespeople like the addition of competitions to their sales programme.

Certain factors need to be considered:

• There must be an objective for the competition. This has to be well thought through and in good time. There must be a set objective, and a budget, which analyses the costs versus the expected benefits;

• The shortest possible time should be set to achieve the objectives of the competition. The maximum length accepted as a norm would be about three months;

• A theme is always an ingredient in a successful competition and bank products provide every opportunity for that;

• To be successful the prize/s must be worthwhile; • Merchandise is far better than cash as rewards. The effect lasts much longer.

Note that cash rewards and incentives are fully taxable in the hands of the salesperson, whereas gifts are tax free;

• Every participant must be able to easily assimilate the applicable rules. They need to be simple and clear; and

• The sales manager should plan for a memorable whirlwind finish, the memory of which will outlast many other considerations.

The sales manager will quickly appreciate that sales contests are not limited to the sales force only. Particularly in the banking branch or other distribution channel, there are a number of other reasons that can be incorporated in the contests. These are: arousing customer interest, arousing other staff interest, increasing volumes on neglected products or services, or kick-starting a new product or service.



The essentials of a well-planned competition are:

• The objectives need to be well defined; • The participants need to know how the competition will work; • The period must be limited and not longer than three months; • The planned results should be evaluated before the competition kicks off;

and • The sales manager needs to be creative with the type of rewards offered.

Rewards and incentives

These are the types of rewards (taxable) that can be offered to salespeople (given as a guideline only):

• Monetary rewards (but note that tax has to be deducted); • Merchandise gifts; • Tours and excursions; • Badges, emblems and certificates; • Notices of success in publications; • Letters of congratulations from a member of senior management; and • Election to an achiever’s club.

Banks tend to prefer rewards as indicated above. These are also called incentives – to incentivise salespeople to perform. Some of the principles that a sales manager needs to keep in mind are as follows:

• Be fair. No two territories or market segments are alike. The sales manager therefore has to be careful about whether there is, in fact, the same amount of potential for each salesperson to achieve his or her incentives or win the competition. Competition between individuals or units is about as dangerous as advertisements that use humour, sex and politics – many people can be angered and react negatively. “Every person a winner” should be the goal.

• The sales manager should not substitute a temporary incentive for a sound compensation plan overall. One of the benefits of systematically developing a complete incentive campaign is the accurate definition of the type of business needed and the probabilities of that being achieved.

• An incentive is also not a substitute for a sound sales plan. “Why do I need it?” should be asked by the sales manager whenever an incentive is proposed. If the reason lies in product shortcomings, inadequate selling tools or non-competitive pricing, then a special incentive is not the answer.



• The best plan for both salespeople and the business unit is to solve the basic problems first and thereby make the sales targets attainable. After that is done, a well-timed incentive programme could spur the salespeople on and make the changes even more effective.

• An incentive should be customised. If an incentive or competition is worth its cost, then the sales manager should take the trouble to customise it. The salesperson wants to feel that the contact is related to his or her individual selling situation and that the rewards have been scaled correctly.

Recognising individual accomplishment

We all want recognition and salespeople thrive on it. It is not enough for the salesperson to know that he or she is achieving the set targets, or to even have the sales manager tell him or her so. The salesperson wants customers, prospects and fellow salespeople to know. Some banks recognise these individuals, including area sales managers and branch managers who have exceeded their targets by far, at annual conferences. Every man or woman should be permitted to win if the job is done.

It is worth repeating here that better performance on the job cannot be attributed to rewards and incentives alone. Clear definitions of objectives, empathetic counselling where appropriate, employing motivational techniques as discussed earlier (which is inherent in the aspect of reward and recognition), and dynamic leadership mean far more than a plaque on the wall.

If, however, the award is seen to be fair and attainable, and the sales team does not react negatively when the idea is given, then a reward or incentive programme will have merit. If there is any doubt, it will be wise for the sales manager to drop the idea altogether.

Coaching to develop the sales force

It is clear that sales is a type of behaviour that enables customers to identify, understand, analyse and solve problems. We have seen that when the sales process enables the customer to derive full value, it is sales at its best.

Sales is like dancing. You have to be in step with the customer. And just as we can be great at dancing or poor at it, so it is with sales.



No sales force can be consistently good at sales without coaching. One of the key roles of a sales manager is to coach to shape or change sales behaviour so that it becomes effective. Standard sales behaviour is often too focused on the product, and not enough on the customer. Great sales is effective communication that helps the customer to a banking value experience. Coaching is the feedback on the effectiveness of sales action.

To be effective, coaching must at the very least determine the effectiveness of the sales person in helping the customer identify and solve problems. It is based upon observation of the sales person in action, wherever possible.

A detailed review of sales coaching is beyond the scope of this body of knowledge. The best advice, though, is for salespeople to open themselves to the feedback of a knowledgeable coach. It will give objective feedback of the effectiveness of action, increase results, and straighten out misguided beliefs.

But remember: practice does NOT make perfect, it makes permanent. With the wrong feedback, your journey of self-efficacy will go nowhere. Only coaching that is itself based upon the right beliefs, potential and action will give you a good result.



Client database management The customer profile (usually obtained electronically from the client database file) should provide information such as:

• Account information – demographics • Cheque and investment account balances • Employment details and earnings • Client background • Perhaps competitor involvement with the client • Balance sheet / personal financial statement information • Borrowings, if any • Account risk profile (dishonours, if any) • Comments by banking staff around customer requests/instructions and any

difficulties experienced • General

The salesperson or service consultant must gather all current information on the client before visiting or interviewing a client. By gathering such information, the salesperson prepares himself or herself for establishing customer needs during the sales interview.

The salesperson or service consultant must update the client profile on the system after every client interaction.

Conclusion: Sales management in the selling system Understanding how sales is organised and managed in a bank adds to the insight of the consultant, making it easier to understand decisions and to solve problems, and leaving the consultant with less mental work to do to figure out the puzzle on his/her own.

It also prepares consultants for progression through the levels of sales management.



Conclusion to the sales acumen cluster of high-impact banking sales behaviours

We have now considered how to align to the selling role, the banking customer and the bank itself, including some of the complexity as to how a bank will organise itself to manage sales.

This has created the insight necessary

to focus and plan for value.




TWO



Focusing and planning for value Introduction

Sales is like any other sphere of banking. Effectiveness in sales relies on good planning.

Because sales activity is often based on untested assumptions, beliefs, and myths, it is often not planned for methodically. When this is the case, the sales process is inefficient, meaning that fewer sales come from the available time and effort.

When you have a good plan in banking sales, your behaviour will look like this:

Focusing and planning for value

• You understand marketing and how it relates to sales.

• You have insight into the relative value of different lead sources.

• You have insight into where your sales efforts will yield the greatest value, and how to plan to maximise value.

• You have a mindset to focus on optimising value by proactively creating a personal pipeline of opportunities.

• You build a hypothesis of value for a particular type of client.

• You build up a personal sales pipeline. • You understand your territory or portfolio and

what you have to do to align to these structures, and the bank’s objectives at this level.

• You align your efforts with those of marketing campaigns where required.

These behaviours will keep you focused and you will waste less time. You are less likely to become demotivated, and you will reap the rewards of your focus. There is too little time to do everything – focusing is everything in the longer term, when it comes to really achieving sales success.



Section 7: Marketing, prospecting, and sales calling

The first step of engaging with customers is when the bank seeks business opportunities. This is when the bank engages with the client buying process for the first time.

To make new sales, banks need to find new customers and new opportunities to sell to existing customers. Marketing plays a significant role in this, as does sales itself.

It is important to understand the relationship between the two to make sense of the sales consultant’s role, and what may be necessary to achieve sales excellence.

The influence of marketing on buying and selling

The nature of marketing

“Marketing” has become one of the most popular words in business, but it is frequently misused and seldom explained to people who work in banks. It is a term that has evolved through business, becoming increasingly complex. Many people wrongly use the term as another word for selling, whereas others use it as a more impressive title for advertising. Marketing is concerned with selling, promotion and with advertising, but it involves much more.

Its place and purpose may not be as immediately obvious as finance or production, mainly because it covers so many facets of business.

It is easier to appreciate its function if we consider an old one-man craft business, such as the village blacksmith or carpenter. Such a man could easily see his working life being made up of two major activities – making and selling.

Because he knows his customers (the market for his goods and services) as well as he knows his product, he would know whether he could supply or make his products or services and for how much (he could suggest products to his customers and he would not spend hours making a new product if he were not certain that he could sell it), and sell it for a price that makes the process worthwhile.

When the one-man carpenter becomes a big company, that once instinctive feeling for customer awareness and consideration has to be systematically planned, organised and controlled.

Marketing covers all the arrangements and activities that go on to keep this combination of customer satisfaction, saleability and profitability coordinated and alive.



Marketing: enabling sales

An overview of how marketing enables sales in banking is set out in the diagram below.

• Research the market and

understand its needs. • Identify the target market

segments. • Define the products and

pricing that will meet the market needs in the target segments.

• Strategy focuses the bank on where the most important revenue will come from, providing an overall focus for all sales activity.

• Use general promotions – such as sponsorships and advertising – to generate interest in the target market segments, making them aware that their problems and needs could be dealt with by the bank.

• Promotions generate a stream of leads that sales will attempt to turn into new business.

• Support sales with marketing collateral and focused campaigns and events on a national, regional and local level.

• Work with sales force • This enables the sales force

to communicate with the customer.

It is clear that marketing enables sales in various ways: it helps to generate leads, it helps customers set expectations and helps sales communicate with customers. It also plays a role in shaping the environment in which sales take place – the look and feel of the branch, for example.

Sales professionals at various times may find themselves involved in marketing activities in order to generate new leads. They could also be the people who engage with the leads that marketing activities generate.

Marketing strategy Promotions Sales support



Considering the link between sales and marketing in slightly more detail, marketing can influence the buying and selling process, as summarised in the table below:


Influence of marketing promotions on the buyer

Exploring and clarifying the problem

BP 1 – Plan From general promotional activities, the person has background awareness that there is a brand of bank that can help them solve financial problems. At this stage, there is no movement towards the bank yet, as the person is still unravelling and appreciating the effect of changes over time.

BP 2 – Recognise Because of ongoing promotions, at the time the person recognises the problem and the need they are aware that Bank A may be able to help them. The brand offers something that promises the possibility of value.

BP 3 – Search As the person searches, so marketing acts to encourage the person to approach a particular bank through its product and service offering, its offer of value, its credentials, etc.

Confirming and deciding

BP 4 – Assess – and BP 5 – Choose

Sales collateral (brochures, for example) helps the person see what benefit they can get from various offerings. At this stage, marketing is relevant to the extent that it helps the person assess whether their needs are going to be met. Marketing should help the value messages be clear – i.e. the relative benefits of a particular offering – so the person can choose a product that offers full value. This could be in the form of sales support materials.




Influence of marketing promotions on the buyer

BP 6 – Obligate The value of marketing diminishes during these stages in the buying process. The buyer is more focused on the purchase they have made.

Implementing the solution

BP 7 – Implement , BP 8 – Track and BP 9 – Integrate

Marketing can help the purchaser reach the conclusion that a good purchase has been made, and should be integrated into the person’s ongoing lifestyle. In other words, marketing supports the perception of full value.

The diagram below gives another view of the relationships between marketing, sales and service through the buying process.

Changes over time occur and new problems emerge that

require solutions

Marketing alerts customer to

possible solutions and places to look

for them

Through service, customer value is

created and expectations of value are met

Sales discovers value – exact

nature of customer needs

Expectations are fulfilled through

the service system

Sales positions products and

services for needs



Prospecting as part of the sales process Prospecting concerns the generation of new leads. The word comes from mining – prospecting is the activity where miners explore where they should mine; they are looking for a new place to begin mining activity.

Prospecting means looking, or hunting, for a customer, and is a key step in the selling process. Potential leads are generated by prospecting in your target market segments. Once you have seen the lead initially you are able to qualify them as a sales opportunity – termed a qualified sales opportunity (QSO) or qualified lead.

A consultant in a bank deals with two scenarios as far as new business opportunities (leads) are concerned.

1. Other functions in the bank – such as the marketing processes – or other roles in the sales and service system generate enough leads for the salesperson to achieve their targets.

2. In the second scenario there are not enough leads coming in from other parts of the bank, and the sales consultant has to engage in activities that generate new leads.

There are two reasons a salesperson must look constantly for new customers:

1. To increase sales; and

2. To replace customers that may be lost over time.

As a salesperson you can ask yourself questions to determine if an individual is a qualified (suitable or worthwhile) lead, including:

• Does the prospective customer have the ability to buy (does the customer suit your target profile by having sufficient money for the investment you wish to sell)?

• Is the prospective customer his or her own decision-maker, or do you know the decision-maker too (e.g. the wife / husband / father of the prospective customer)?

• Does the prospect customer have a defined problem you are solving?

A true prospect must have the financial resources, money and credit to pay and the ability to make the buying decision.

Sources of customers can be many and varied or few and similar, depending on the service or goods sold by the salesperson. Naturally, persons selling different services and goods might not use the same sources for customers.



A salesperson of oil-field pipe supplies would make extensive use of various industry directories in a search for names for drilling companies. A life insurance salesperson would use personal acquaintances and present customers as sources of new business. A pharmaceutical salesperson would scan the local newspaper looking for announcements of new physicians or the opening of new hospitals, medical offices and clinical laboratories.

Where would a banking salesperson look for leads?

• Watch the news for appointments of high earners (a private banking sales consultant could, for example, do this).

• Prospect from:

• Relationship managers or other banking consultants to get introductions to customers;

• In-house insurance brokers for investments and home loans;

• Vehicle salespeople for potential asset financing business and leasing;

• Trust services, should customers be setting up trusts and/or potential investment opportunities; and

• Estates department (or follow the Government Gazette) to be aware of beneficiaries receiving large inheritances.

The examples given above mean that banks actually “farm” their own database for cross-selling opportunities.

One of the most important ways of getting leads is through what is known as endless customer referral:

• Satisfied customers are likely to buy again from the salesperson. That is why it is vital to emphasise the importance of building a relationship with the customer. It is critical to your success; and

• The customer often refers the salesperson to someone he or she knows. This is known as the endless chain referral method. This is an effective method of finding customers. Customers and customer referrals are two of the best sources of future sales, with repeat sales from customers being the best.

Another way is to prospect using the influence method. This method involves finding and cultivating people in a community and/or other organisations.

At times your bank or financial institution will have a direct mail or telemarketing campaign that is directed at specific customer profiles or market segments. However, networking within your territory and observation will also help you to get leads.



Given the ways in which you can prospect and given the understanding you should have of why people buy, a key factor in the selling process is how to obtain an interview with the prospect.

Another important element of prospecting will be to prospect in line with the financial life cycle. The example quoted in a previous section – relating to approaching schools to promote loans for school clothes – is an example of a mini-marketing campaign carried out a local level, inspired by understanding the financial life cycle, and shows how this framework can be used to guide salespeople to prospect for leads.

Many banks have internal systems that screen existing clients, analysing their accounts and account behaviour to identify new opportunities where the client may have a need that has not been met. Some of these systems can actually determine whether a client qualifies for a particular product, and others analyse whether a client with their profile has a propensity to buy a particular product – i.e., a leaning towards purchasing that type of product.

Forming an initial value proposition When planning to approach a new QSO, a key to success is the initial value proposition. The initial value proposition is the approach that the salesperson uses to gain interest.

There are many approaches to the initial value proposition – the salespeople of many companies use statements such as “We would like to talk to you about your needs for ABC product or type of product”. While this may have worked in the past, generally people are bombarded by so much information nowadays that they do not want to take the time out to chat about their needs.

A more direct approach is required.

A great initial value proposition achieves a couple of things:

• It indicates a problem that the client could have; • It offers to resolve the problem; • It states the value of resolving the problem.

Marketing is often the initial value proposition. The better adverts make people aware of some problem, offer to resolve it using some product, and communicate some benefit from solving the problem.

When planning sales, it is important to consider the specific people that are being targeted and to create an initial value proposition that focuses on a problem that they may have.



A very simple example would be when selling entry-level banking. The problems that a banking salesperson could offer to resolve would be the inconvenience and danger of carrying too much cash around and the extremely negative consequences of being robbed or losing money (the problem).

The problem could be resolved by offering the client a transactional product that allows the person to store their money safely, keeping less cash while the balance is securely stored by the bank. This would mean that the customer stood to lose less money in a robbery and did not run the risk of having to spend a period with absolutely no money because it had all been stolen.

(This example does not rely on any specific aspects of a specific product, and in this sense it is somewhat weak because it does not demonstrate how a particular bank’s solution may be better than the alternatives available to the target customer.)

In call centre situations with outbound calls or when selling to inbound service calls, the strength of the initial value proposition is all-important. Many people are not patient – but they are far more likely to stay on the phone when there is some clear value being proposed.

The key consideration with an initial value proposition is that it cannot be about the product: it MUST be about the client’s world becoming easier, simpler, cheaper or better in some tangible respect. That is the attraction of a great initial value proposition.

The same holds true of advertisements. Very often, a good advertisement succeeds in quickly and creatively communicating the solution to a problem.

The initial value proposition becomes the opening sentence in a sales campaign.

Where a sales consultant is prospecting for leads in a situation where they have no idea regarding the customer, the principle still applies – there is seldom time to explore needs randomly and aimlessly, hoping to stumble upon an opportunity to be relevant. Great initial value propositions lead with relevance to a customer problem.

Here is another simple example: “Hi sir, I see you standing at the enquiries counter. If you are waiting to collect a statement, we’ve been able to help many customers spend less valuable time in the branch by e-mailing them a statement. Would saving be important to you? Could I interest you in an e-mailed statement?”



The importance of a well-crafted initial value proposition to a customer cannot be overstated.

The diagram above is a model for planning an initial value promise. On the left we consider the client’s position, while on the right we analyse what problems it solves in the client’s world.

Working with this template allows one to structure very simple, direct and effective initial value conversations.



Sales plans A sales plan is the series of steps that a sales team or individual consultant will follow to achieve a sales objective – e.g., to sell a certain value of deposits. The sales plan typically sets an objective, identifies where the sales are likely to come from (which areas, customer profiles, lead sources), how many people will be contacted in what period, what the sales approach will be, what the target conversion rate will be, and what the targeted sales value will be.

A sales plan focuses efforts, and a good sales plan focuses effort where the most value lies.

It is important that each sales team (or branch, geographic area, or targeted market team) has a good understanding of its sales plans.

The plan may be drawn up at a senior level, but will it deliver the desired results at a grassroots level? The detail in a sales plan can differ, but it is essential that a practical, sensible and achievable plan be drawn up, and that every salesperson is aware of the plan and his/her role in it.

Sales plans should detail the required results and elements of how the results will be achieved. This normally includes breaking down the targets into smaller pieces, understanding what marketing support is needed, what resources are needed and some form of tactics (steps to be taken) to achieve the numbers.

One of the key things a sales plan does is that it focuses effort on where it is most likely to be rewarded. Selling private banking solutions in a lower-income area will have limited success, whereas selling personal loans might be a runaway success. The sales plan allocates resources (people, time, effort, money, and marketing resources) where they will most likely be rewarded.

Sales consultants often find their day-to-day activities guided by sales plans.

A sales plan would typically include sales objectives, who to contact, what type of offer to make, what volumes of calls to make, an expected conversion or close rate, and a time frame for all of the above.

Generating value from a sales plan depends upon the accuracy of targeting a relevant market, having the right conversations, and being able to close deals. To do this, all the skills in the remainder of this body of knowledge will be required.



Sales call planning At the individual level it is important to apply planning principles to each sales call, especially if it is not transactional selling.

Sales call planning is proactive. (You will appreciate that if a customer comes to a salesperson without any effort from the salesperson, the type of sale is indeed welcome but is termed reactive.)

The sales call is the key to sales success, and planning a sales call is the foundation of a successful sale. You would never consider going on a long- distance trip without a roadmap or GPS. Similarly, you should know what to accomplish on any sales call and later measure yourself against that plan.

Although salespeople say there are numerous reasons for planning, four of the most frequently mentioned reasons are:

1) Planning helps to grow confidence

By carefully planning your approach and presentation, you increase confidence in yourself and your ability as a salesperson.

2) It develops an atmosphere of goodwill between the buyer and seller

The salesperson that understands a customer’s needs and is prepared to discuss how a product will benefit the customer is appreciated and respected by the buyer. Knowledge of the customer and concern for the customer’s needs demonstrates a sincere interest in a customer, which is generally rewarded with an attitude of goodwill. This goodwill gradually aids in building the buyer’s confidence and results in a belief that the salesperson can be trusted to fulfil obligations.

3) It reflects professionalism

Good business relationships are built on your knowledge of your bank, industry and customers’ needs. Therefore, it is important to show customers that you are calling on them to help solve their problems or satisfy their needs. These factors are the mark of a professional salesperson that uses specialised knowledge in an ethical manner to aid customers.

4) It increases sales

A confident salesperson that is well prepared to discuss how products will solve particular needs will always be more successful than the unprepared salesperson. Careful planning ensures that you have diagnosed a situation and have a remedy for the customer’s problem.

Such thought and planning ensures that a sales call and presentation is well thought out and appropriately presented.



Like other beneficial activities before the sales call is made, planning is most effective (and efficient) when done logically and methodically. Some salespeople try what they consider to be planning, later discarding the process because it takes too much time. In many cases these individuals are not aware of the basic elements of sales planning.

Two initial aspects are required in the first approach:

• Determining the sales call objective; and

• Developing or reviewing the customer profile.

The sales call objective is the main purpose of a salesperson’s contact with a prospective client. When evaluating the importance of setting pre-call objectives, ask yourself the following questions:

• “Is it possible to make a sales call without having a sales call objective?”

• “Why can’t salespeople just jump in and see what happens?”

Selling is not a complex process, but it is difficult to sell consistently. That is why, whether you regard it as an art or a science, the discipline of selling starts with setting a pre-call objective.

If anyone doubts this, remember that, by definition, a sales call must systematically progress towards a sale. We’re not talking about elaborate planning. Sometimes it takes only a few seconds before a call. But on every occasion it is vital for the salesperson to answer one simple question: “If this is successful, what will result?” Taking the time to do this starts the selling process. Before every call, ask yourself, “What am I going in here for?” “What is the result I am looking for?”

Writing down your pre-call objectives increases the focus of your efforts. With today’s rising costs, this focus is essential. If salespeople are just visiting customers to see what develops, they are merely well-paid tourists. If you are a professional salesperson you should think of moving your customers only in the direction of a predetermined goal.

Knowing where you are going increases the likelihood of success. Obviously, if the pre-call objective turns out to be inappropriate as the call develops, it is easy to switch tactics. Often such changes involve redirection. Just because a salesperson is asking for only an interview does not mean that the call shouldn’t be planned. Even planning for the assessing of needs for the first interview is necessary. Sometimes the sales call has a limited objective. Guiding the customer in the direction of that pre-planned outcome is what is required.



Don’t let anyone tell you that selling is so repetitive that the next step becomes a matter of course. Knowing where you are going may be routine, but getting there requires thinking and skill.

Even veteran salespeople sometimes skip the pre-call objective step in favour of just seizing whatever opportunities present themselves. But as a professional, it’s your responsibility to check yourself in this regard. Commit to having an objective for every call, and after that call check your results against the objectives.

This is the simple truth that the best sales professionals have known all along that often the most important step in a sale takes place without the customer even being there.

Careful work on the initial value promise makes sales calling a great deal easier. Many people experience a type of fear or anxiety at the thought of cold-calling for sales. But this is really because they have the wrong mindset. When you approach a call with a proper plan, all you are doing is using your hypothesis of value to establish whether the value you have on offer is relevant to the customer. Nothing could be simpler – it does not rely on natural charm or any superstition. It relies on careful analysis and a complete commitment to using bank products to solve customer problems.

Accurate sales reporting Most planning starts with what has happened previously, so budgets, forecasts and targets are built with a view of history in most instances. This makes it critically important to be accurate in sales reports.

Sales reports are often seen as a headache by salespeople, and they are a total waste of time if they are either not analysed or are inaccurate. Also, it is important that sales reports are not used only to measure activity and then used as a big stick with which to beat salespeople.

If sales reports are used clearly they can provide the sales team with vital information to learn and grow, and will in turn generate better results.

An example would be where the reports can clearly show how a territory is not profitable or if a bank is spending too much energy promoting a particular product that simply is not selling in a particular market area.



Conclusion Marketing and prospecting work hand in hand to generate new leads.

Prospecting can frequently be a vital part of the sales consultant’s job. The need for sales consultants to prospect will be increased as people interact more frequently with technology and not with branch staff. Branch footfall will continue diminishing as the bank migration strategies drive more and more people on to cheaper service channels. The sales consultant who knows how to prospect successfully will be extremely valuable.

The leads they generate could be customers at any point in the buying process. The banking sales professional will use Aha! selling methodology and quickly determine where the customer is in the buying process and respond appropriately. Or if there is no buying process, they may trigger one with a well- crafted initial value proposition.

Once the sales professional engages the customer, irrespective of where the customer is in the buying process, or even whether a buying process exists or not, the sales professional begins an intensive, persuasive communication process based on discovering value, positioning value and delivering value. This is termed a value conversation. It is right at the heart of great selling.




THREE



The value conversation Introduction

This is where the rubber hits the road. The customer is interacting with you – you have a golden moment, an opportunity to create value in a customer’s life in return for a fee to the bank.

The behaviours that make for success in the value conversation are set out in the table below.

Presenting a professional image

• You look the part – you have the appearance of a credible professional representing a leading brand. (This could be in person or in terms of telephone or e-mail etiquette.)

• Where applicable, your workspace organisation presents an image of organisation, order, efficiency and professionalism.

• You maintain a professional interpersonal manner. You maintain respectful politeness, you are focused and to the point, and you are not overly familiar.

Communicating persuasively

• You listen effectively. • You use a variety of questions to clarify the client

situation, problem, needs, and preferences. • You use insight into the client’s world and into

the value that they require to be relevant in your communication.

Gaining access to customer sales opportunities

• You use hypotheses of value to educate problems, gain attention, and position potential value. You use hypotheses of value to create interest in your products and offerings.

• You gain and proceed with the client’s consent.



Discovering value

• You are able to structure and plan a customer- centric selling conversation by aligning to the customer’s problem-solving process.

• You are able to clarify a customer’s situation, problems, challenges, and needs using relevant questioning.

• You are able to offer banking insight that deepens the customer’s insight into aspects of their problems.

Positioning value • You are able to structure and plan a customer- centric selling conversation by aligning with the customer’s problem-solving process.

• You are able to offer insights and recommendations or suggestions regarding products and services so that the value is immediately apparent in relation to resolving the customer’s problem.

• You close deals.

Transacting and complying

• You correctly state the time requirements, managing customer expectations.

• You position transactional and compliance requirements with empathy, emphasising that they are part of a service designed to protect the buyer and the bank.

• You meet transactional and compliance requirements efficiently and accurately. This includes gathering information, completing documents, making required disclosures, printing documents where required, obtaining authorisation from the customer, etc.

• You correctly inform the customer on steps to fulfilment.



Cross-selling and retaining clients

• You identify opportunities where existing banking relationships may not cover possible client needs.

• You rapidly educate the client on the underlying problems and the value of a solution, and obtain consent to continue.

• You proceed with the value conversation around the new opportunity, or when declined, politely close.

• You identify future events and milestones in the client’s life that may create changes that trigger needs and therefore may present cross-sell opportunities. You plan to follow up accordingly.



Section 8: Presenting a professional image

Presenting a professional image does not close deals.

Presenting a poor image can deter people from buying from you, however. Looking and behaving in a sloppy and unprofessional manner will lose you sales.

In this section we consider some of the most important elements of presenting a professional image in sales, in order to create a credible context for selling.

Professional image The three articles below provide a perspective on the importance of a professional image, emphasising various aspects and establishing several common themes.

Article 1

Looking Like You Mean Business

By Wendy Connick, About.com Guide

People still judge a book by its cover, and we judge other people by what we see on the outside. For salespeople, it’s vital to take this into account before you meet with potential customers. In a social situation you can show your trustworthiness over a long period of time, so if someone is put off by their first impressions you have a chance to change his mind. In a sales situation you’ll meet with a given prospect only once or twice, so projecting the right appearance from the start is crucial – there’s almost never a second chance.

The goal is not necessarily to look as attractive as possible, although you will want to shoot for a pleasing “look”. If your appearance is attractive but not business-like, you can end up making entirely the wrong impression for a salesperson. The idea is to gain your prospects’ trust by conveying the idea that you are giving them good advice when you suggest they buy your products. To that end, a business-like appearance will get you further than a superficially attractive one.

In a business situation, trustworthiness is based on several factors. People are inclined to trust businesspeople who are ethical, organised, knowledgeable, and reliable. These are the qualities most salespeople should strive to show in their overall appearance. The precise importance of each of these qualities will vary depending on your particular customer base. Selling to farmers and selling to bankers requires entirely different approaches to building your professional image.



Most customers will respond best to standard business attire. A basic suit, or a minimum of a tailored shirt and good-quality pants (for men) or a classic blouse and good pants or a skirt of moderate length (for women) is a good place to start. Clothes should be clean, free of stains and not wrinkled. Cologne or perfume is best used in moderation or skipped altogether, as many people suffer from allergies to these scents.

Your body language also matters a great deal in sales situations. Simple things like sitting up straight, making regular but not excessive eye contact and shaking hands firmly can make a huge difference in how others perceive you. Ideally, you want to convey an impression of confidence and competence without coming across as being arrogant or overly assertive.

Attention to the details of appearance extends beyond your own body. If prospects and/or customers meet you at your place of business, then you’ll need to prepare your office to convey the same professional message. Your desk should be fairly clear with a few personal touches, such as photographs. Avoid excessive displays of your personal interests and hobbies, as these can detract from the overall impression. A framed certificate for first place in the golf tournament is fine, but covering your work space with golfing memorabilia is a problem unless you’re selling golf clubs.

You may be a somewhat disorganised person, but you don’t want to shove that fact in your prospects’ faces. Keep any stacks of paperwork and other clutter discreetly out of sight. Better yet, train yourself to deal with tasks as they arise and then put them away in the appropriate places. Be sure to provide a chair for visitors at a comfortable conversational distance from your own chair. And have a supply of basic items such as pens, paper and business cards available at all times.

Your car should also reflect a professional appearance, as prospects may easily end up seeing it during the course of business – for example, a prospect might walk you to your car after a meeting. Keep your car squeaky-clean and tidy outside and in, and tend to any dents or dings as promptly as possible.

http://sales.about.com/od/How-To-Sell/a/Looking-Like-You-Mean- Business.htm

http://sales.about.com/od/How-To-Sell/a/Looking-Like-You-Mean-



Article 2

Five Steps to Increase Your Professional Image with Customers

by Voss Graham in: Sales Process

When I ask salespeople about what their professional image in sales is, I get a lot of “deer in the highlights” looks. Most salespeople don’t think about what their professional image may appear to be in the eyes of their customers and prospects – much less to themselves. Which in most cases is why the majority of salespeople occupy the lower half of the successful salespeople list.

This is a really important question to ask and to give a truthful and honest assessment of how customers and prospects see you is not always easy. Now, some believe I’m talking about what you wear or how you fix your hair. Well, while these things matter to a small group of people, there are more important issues at play. Let’s look into what professional image is and how it impacts on your sales success. What is a professional image? It is the image you display in the mind of the customer or prospect. It is the same image that can change rapidly from the time of first impressions to becoming a trusted advisor to the customer. It is your actions that help the customer see you as a professional sales person.

The interesting thing is all salespeople begin at the same point in the mind of the prospect – no interest in a “sales person” since you are in sales. Now that sounds a little harsh, yet it is how most prospects see salespeople – as pushy, lying, arrogant, self-centred, talk-too-much blowhards who have no interest in my wellbeing, only wanting to sell something. Sometimes I wonder how we can sell anything in this environment!

So, how do you break out of this model? Simple: by modelling yourself on the successful professionals, doing what they do to create the professional image for business-to-business (b2b) sales. There are couple of things you can do to change how your prospects and customers see you. Here are a few of the ways…

• Prepare – If you have done your homework before showing up for a meeting, you get points as a professional. This is the easiest method to use and it prepares you for a couple of additional steps.

• Think – I know this sounds corny, yet professionals I know think about a prospect’s situation. They review the data they have uncovered in their basic research of a prospect. They look at the data to uncover trends in their industry and identify who their major competitors are. Take time to study and think about the relationship to trends and performance.

http://developingb2bsales.com/author/SalesFitnessCoach/

http://developingb2bsales.com/topics/sales-process/



• Plan – Professionals plan their first call more than any other call because they know there are more unknowns at this point. So they want to have a plan for approaching this prospect and getting their attention early in the process.

• Look for problems – The professional sales person is looking for problems they can fix. Here is where an individual can separate themself from the “thundering herd” of salespeople calling on a prospect. By looking for problems, the professional focuses upon asking questions that get the prospect to stop and think about their issues. The best thing you can do is ask questions that help the prospect uncover issues and problems in their area of responsibility.

• Get others involved – The sales professional in b2b sales sees his/her role as a coordinator of other technical or specialty people in a sales environment. S/he coordinates interaction between his/her company and others within the prospect company. This gets everyone involved, thus increasing the possibility of a commitment to do business with you – the sales professional.

There you have five keys for elevating your professional image in the eyes of your prospects and customers. Use these with every prospect and you will get more business each year. Why? Because people want to work with professionals who know what they are doing and most importantly deliver consistent results.

Remember, you main job as a sales professional is to talk about problems and potential problems and the possible consequences of these problems. Talking about the details of your product or service is what commodity salespeople and inexperienced salespeople do every day.

Join the ranks of the sales professionals by studying the prospect and their industry, looking for clues to problems, designing questions to uncover or confirm problems and their consequences and network within your own company to find the best sales-oriented specialist to assist you with the sales process. When you do these things well, you will be a sales professional in the eyes of the customer – the only ones that really count.

http://developingb2bsales.com/five-steps-to-professional-image-in-sales/

http://developingb2bsales.com/five-steps-to-professional-image-in-sales/



Article 3

3 Ways to Improve Your Professional Image

First impressions are everything. If you don’t appear professional to potential clients, you could lose business.

That’s where soft skills come into play. “Today, soft skills – good grooming and wardrobe, professional etiquette and communications skills – play increasingly important roles in the marketplace,” says Rita Rocker, founder of Transformer Academy LLC, a communications and image consulting company in Boystown, Nebraska, US.

Here are three tips to portray a stronger professional image:

1. Implement a dress policy

Christina Ernst, president of VIP Travel, a travel agency based in Cleveland in the US, remembers with embarrassment how loudly her flip-flops slapped the floor when she got up to grab a brochure during a business meeting. Although she is successful in her business, Ernst wonders if her image appeared too casual any time she loses a sale.

To ensure you and your employees are always dressed for success, Sara Canuso, a Philadelphia-based personal image and branding specialist, says it’s critical to implement a dress policy. “Everyone’s interpretation of ‘business casual’ is different,” she says. “When someone sets a dress code, then everyone is on the same page.”

Canuso says such a policy should specify whether jeans are acceptable or if more formal clothing is required. For example, your dress code might ask employees to wear business attire when clients are in the office.

2. Define your brand

Being decisive and having a brand to focus on will increase your confidence and portray a strong image to current and prospective clients. “Decide once and for all: This is who I am and this is my brand,” Canuso says. She gives the example of Michelle Obama versus Hilary Clinton. Both women convey very different – but equally strong – professional images. For example, Clinton often wears tailored pants suits to enhance her reputation as a strong competitor in a male- dominated setting, while Obama has a softer style. Canuso says that once you have a great sense of yourself and your business, outer image is just “icing on the cake”.

http://www.nfib.com/business-resources/business-resources-item?cmsid=45954




3. Polish your communication skills

Whether you’re giving a presentation to an investor or closing the deal on a sale, it’s important to remember that communication skills affect the way others perceive you. Canuso says a public speaking class or a Toastmasters group can help you learn to communicate ideas better. Another effective method that Canuso has used is searching Google for “top sought-after speakers.” She watches videos of business speakers to pick up techniques like using analogies or storytelling to engage the listener. Effective communication can help ensure others take you seriously and trust in your ability to do business with them.

http://www.nfib.com/business-resources/business-resources- item?cmsid=58407


http://www.nfib.com/business-resources/business-resources-



Conclusion

These three articles have summed up the essence of presenting a professional image in a sales context in different business environments.

It is clear that a professional image sets up a good context for a sales conversation, because you appear credible and trustworthy. And you can enhance that image through effective sales behaviour.

When people respond to another person in any situation, one of the first processes that happens is they form almost instantaneous judgements about whether the person represents a threat or not. As a salesperson, you need to make your image work for you, rather than against you.



Section 9: Communicating persuasively

Sales is a persuasive communication process.

Salespeople spend most of their time communicating, and often some of the content of this communication is repetitive. This repetition can lead to simply repeating what you have memorised rather than thinking about the quality of what you are saying. Customers realise quickly when this is happening and may find it annoying.

The focus of the communication process is what represents value to the customer and how the bank can meet it.

Top sales professionals are excellent communicators, and a better understanding of all areas of communication should increase your sales.

The basics of persuasiveness Persuasive communication depends on getting the basics right. The basics are the skills of communication that are crucially important in all communication situations.

There are several basics that are relevant. This is a summary of the basic principles.



Skill What it is Why it is relevant

Establish rapport

The skill of making a customer feel comfortable and confident in a sales situation

It establishes the environment in which the client is willing to discuss his/her situation, problems and needs. If there is little rapport the client will be reluctant to discuss his/her needs in any detail, and may find an excuse to exit the buying process without a sale being concluded.

Questioning Using open questions to clarify situations, needs, requirements and responses

Questioning is the key to the sales process – it is the tool that uncovers problems, needs and expectations, and is used to gather feedback.

Listening, empathy and feedback

Listening carefully to exactly what the customer is saying

Listening is the key to communication. It allows the salesperson to respond appropriately to the customer – like dancing in step.

Tuning in to nonverbal communication

Being aware of non-verbal signals and using them to manage a conversation

This involves tuning in to the things the person communicates with their body language. It provides clues about what the person is thinking and feeling and how they are responding to suggestions. Many buying-related signals are presented non-verbally.

Expressing ideas simply, clearly and briefly

Being able to get to the point in explanations

This means expressing ideas in bite- sized chunks, simply and accessibly, to the client.

If these techniques are correctly applied, a salesperson has laid the groundwork to create a climate of trust, credibility and professionalism. These things help the client form a picture of the value that is being offered.

An outline of these basics follows. Please note – rapport is not treated separately. It is a warm, friendly greeting followed by the basics, and that is all.



Questioning

The following article appears on the internet, on the website Just Sell: http://www.justsell.com/top-30-open-ended-questions/

Open-ended questions are one of the most important tools for those who sell (as long as you listen).

They help you gather information, qualify sales opportunities and establish rapport, trust and credibility.

If you consider yourself a professional, own (absolutely know) a repertoire of powerful open-ended questions, questions that are answered by more than a simple yes or no, questions where the prospect/customer gets directly involved in the sales discussion.

The key here…

Ask the question and let the prospect/customer give you his/her answer.

• No leading.

• No prompting.

• No interrupting.

Just in case you’ve not had the opportunity to put yours down in writing, here are some of our favourites. You should have several additional questions specific to your industry, but these will get you started.

Write down the ones you find valuable. Memorise them with your team. Practise them on your drive in or on the way to your next appointment. Print them out. Post them near your phone. Pass them on to your team.

http://www.justsell.com/top-30-open-ended-questions/



The questioning technique is important to sales success because:

• It helps to determine needs;

• It helps to reveal more about the person who you are dealing with in terms of personality, style and attitude;

• It helps to direct the conversation to what you want to find out (in other words, you take charge of the direction of the conversation – but that does not mean you talk all the time);

• It helps to close the sale;

• It helps to develop two-way communication; and

• It increases customer participation.

When using questions in selling, you need to know or anticipate the answer you want for a question. Once you know the answer you want, you can develop the question. This procedure can be used to request information that you do not have, and to confirm information you already know, or should know, before you can recommend a particular product to the customer.

An ideal question is one a customer is willing and able to answer. Only questions that help make the sale should be asked, so use questions sparingly and wisely.

Ask questions that count

Why would asking a question get the customer’s attention? To give an answer, a customer must think about the topic, and in this way you engage the customer in the sales process.

You can use four basic categories of questions during the presentation, which are:

Closed or direct questions

The closed or direct question is answered with few words and usually requires a simple yes or no answer. They are especially useful in moving a customer towards a specific topic or simply extracting specific information.

Examples the salesperson might use are:

“Mr. Modise, are you interested in saving an extra 2% on your bond costs?”

“Reducing bond costs these days is important, isn’t it?”

“Mrs. Shaw, have you ever invested money in unit trusts?”

“What kind?”

“How many?”



Never phrase the direct question as a direct “negative-no” question. A direct “negative-no” question is any question that can be answered in a manner that cuts you off completely. The salesperson says, “May I help you?” and the reply usually is, “No, I’m just looking”. It’s like hanging up the telephone on yourself – you’re completely cut off!

The answer to a direct question does not really tell you much, and there is little feedback involved. You may need more information to determine buyer’s needs and problems, especially if you could not determine them before the sales call.

Open-ended questions

To open up two-way communication the salesperson can use an open-ended question by beginning the question with one of six words: what, where, when, how, who and why, Examples include:

“Who will use this product?”

“Who should we consider?”

“What features are you looking for in a product like this?”

“What can I do for you?”

“Where will you use this product?”

“Where would you like to go?”

“Where will you need the product?”

“When do you think you will need it?”

“How often will you use the product?”

“How do you feel about this?”

One-word questions such as “Oh?” or “Really?” can also be useful in letting people open up and give you more information.

The purpose of using open-ended questions is to obtain unknown or additional information, to draw out clues to hidden or future needs and problems, and to leave the situation open for free discussion of what is on the customer’s mind.

Rephrasing questions

At times you may not always understand the customer. So you sometimes have to rephrase what the customer has said. Provided you do this gently, it will help you to get clarity.



Examples:

“Are you saying that price is the most important thing you are interested in?”

“Then what you are saying is that if I can improve the delivery time, you would be interested in buying?”

This form of restatement helps to clarify meaning and determine the buyer’s needs.

Leading questions

This is used to lead the customer to selling points that both parties agree on. The leading question is an excellent alternative or backup.

Examples:

“If you had to take one of these when would you like us to deliver it?”

“Would you prefer to make an appointment for a Thursday or a Friday?”

“Would you like me to talk about the kind of shares first or the kind of returns you can expect?”

You will notice when you examine the abovementioned examples above that in a way you are leading the customer to make a decision, albeit only a small decision.

The objective is that by allowing the customer to make lots of small decisions, you actually put the customer in a position where it is difficult to say no. This technique of questioning could be considered manipulative. Therefore, it should rather be used sensitively where you can see a customer is ambivalent or anxious about making a decision. Sometimes one decision is too big, whereas a lot of smaller decisions about inconsequential things are easier to make. The final decision then almost falls into place on its own.



There are three important rules regarding questioning, because although questions are a powerful selling technique, they can easily backfire.

• The first rule is to actively listen to your customer. From there you will be able to ask questions more appropriately;

• The second rule in using a question is to pause after submitting a question to allow the customer time to respond to it. Waiting for an answer to a well- planned question is sometimes an excruciating process because seconds may seem like minutes. A salesperson must allow the customer time to consider the question, and hope for a response;

• Failing to allow a customer enough time defeats the major purpose of questioning, which is to establish two-way communication between the customer and the salesperson; and

• The third rule is to ask questions that you are likely to know the answer to. You do not want to get yourself into a situation that you are not prepared for.

The role of empathy, listening and feedback in persuasive communication

Empathy is the ability to identify and understand another person’s feelings, ideas and situation.

As a salesperson you need to be interested in what the buyer is saying and not just dive in with your sales presentation.

Many of the barriers to communication mentioned earlier can be overcome when you place yourself in the buyer’s shoes.

Empathy is saying to a customer, “I’m here to help you,” or, “Tell me your problems and needs so I can help you.” Empathy is also evidenced by a salesperson’s display of sincerity and interest in the buyer’s situation.

An overly complex or technical presentation should be avoided when it is unnecessary. Part of being empathetic is to use words and materials that the buyer can easily understand. A skilled salesperson can make a customer feel comfortable with a new product or complex technology through the subtle use of non-technical information and a respectful attitude.



Lack of empathy can create a barrier between the sender and receiver in the communication process. You can transmit a better message if you put yourself in the receiver’s place and analyse the message from his viewpoint. The same holds true for the receiver – s/he must be able to empathise with you. That is, the sender as well as the receiver must try to see the interaction from the other’s point of view if they want to increase their potential for effective communication.

The ability to empathise with someone else may not be easy. If you are to see things from another’s viewpoint, you have to put aside your own prejudices and preconceptions. The receiver may be of a different race, creed, educational background, from a different section of the country or have a different specialty or rank within an organisation. Under these circumstances, the task of empathising with the other person communicating is difficult. The task is further complicated if the belief that understanding another’s viewpoint may pose a threat to your own.

To communicate better we must try to see ourselves through the eyes of others. By developing empathy for the people to whom we will be directing messages, we might recognise the need to modify our messages from time to time before sending them.

The relationship between the people involved in any communication process may form a greater barrier to the effectiveness of the communication between them than any other barrier discussed. If the relationship between the people participating in the communication is good, the communication has a greater chance of success. This is true regardless of whether the communication takes place in oral or written form.

The quality of the relationship between the sender and receiver determines to a great extent the ability of the person transmitting the message to penetrate the communication barrier.

Hearing refers to being able to detect sounds, but listening involves deriving meaning from sounds that are heard. Everything you hear is not worth your undivided attention; for the salesperson, however, listening is a communication skill critical to success.

Listening is the selective process of attending to, hearing, understanding and remembering aural symbols.



Listening is one of the least developed sales skills

Listening is one of the poorest communication skills for the following reasons:

• It is the least engaging of four activities associated with communication (speaking, writing, reading and listening). With speaking, we gain social recognition because all attention is directed towards us;

• It requires your full attention;

• It takes time (and we are not always sure that we want to spend our time just listening); and

• It’s like physical fitness – desirable but difficult to implement without willpower.

We tend to be selective listeners: a mother will hear her newborn baby cry and will wake up immediately, but will sleep soundly while her husband is snoring loudly alongside her. We automatically filter out anything we do not want to hear; at a braai with friends you may not hear birds singing, but alone at a campsite you will be amazed by their song.

An issue related to attention is the concept of threshold. This is the minimum level of stimulus intensity that enables you to pay attention. It is the stimulus intensity at which the observer reports detecting a signal and will depend on, among other things, the duration of the message, wavelength and rate of presentation. It is affected by health, age, training, skill and motivation.

For example, when we are alert and interested in the subject we may listen very well, but if we are drowsy or worried about something else, our listening skills will diminish considerably. If you have just watched a scary movie alone at home at night, you become more aware of noises that perhaps you had not even heard before!

Salespeople often believe that their job is to talk rather than to listen. If they both talk and listen, though, their persuasive powers increase. Because people can listen (about 400 words per minute) roughly twice as fast as the average rate of speech, it is understandable that a person’s mind may wander while listening to a salesperson’s presentation or that the salesperson may tune out a customer. In other words, about 60% of our listening is “spare time”! To keep the buyer listening, ask questions, get them involved in the conversation and show visual aids. Once you ask a question, carefully listen to the reply.

Listen to words, feelings, and thoughts. You can easily apply this technique to your daily routine when interacting with somebody you like or are interested in – “Really, tell me about it ... is that so?” Do it with your customers, too.



When someone speaks to you, the person is expressing thoughts and feelings. Despite the logic of this statement, most of us hear the words but do not understand the overall message because we ignore some aspect of it. Among words may be hidden feelings or sly thoughts. Listen beyond the words for the emotional content of the message. Here are some tips:

Emotional content is conveyed in the nuances of voice and body language. Some people, such as thinkers, on the one hand, give you little emotional information. That’s all right, because you mostly deal with them in a factual and business-like style.

Feelers, on the other hand, reveal their emotions, and in turn appreciate your acknowledgement of their feelings. It is appropriate to discuss their feelings and treat them more like friends than strict business associates.

You can hear the emotions behind words in several ways. First, look for changes in eye contact. After establishing a comfortable and natural level of eye contact, any sudden deviations from the norm will tip you off to emotional content in the message. People tend to look away from you when they talk about something embarrassing. When this happens, make a quick mental note of what it pertained to and treat that subject delicately. Also, give a person the courtesy of looking away momentarily yourself – as if you are saying, “I respect your privacy”.

Also listen between the words for what is not said. Some people reveal more in what they don’t say. Part of this is because of the emotional content of the message and part is from the information they give you.

Active listening is the most effective level of listening. The active listener refrains from evaluating the message and tries to see the other person’s point of view (empathetically). Attention is not only on the words spoken but also on the thoughts, feelings and meaning conveyed. Listening in this way means the listener puts him or herself into someone else’s shoes. It requires the listener to give the other person verbal and non-verbal feedback.



Feedback is the art of gaining a response or clarifying a customer response

Learn how to generate feedback to determine whether your listener (the customer) has received your intended message. Feedback does not refer to any type of listening behaviour by the customer but to a recognisable response from them. How can you get feedback?

A shake of the head, a frown or an effort to say something are all signals to the salesperson. If the salesperson fails to notice or respond to these signals, no feedback occurs and this results in faulty or incomplete communication.

Another way of giving feedback is to gently ask the customer if they understand the explanation you have given. Customers may often feel uncomfortable to admit that they have not received the message to their satisfaction or are unable to understand the overall message.

There are several ways of doing this without embarrassing or annoying the customer:

• “Do you have a clear understanding of how the investment works, or do you think I have left anything out?”

• “How can I help you further?”

• “Do you want me to go over any aspect that we have discussed in case I have not made myself clear?

• “Do you think I have covered everything satisfactorily?”

It is important that you always communicate clearly to the customer to prevent any problems occurring further on. Feedback is therefore an excellent tool to use to ensure dual understanding of the message, as well as receipt of that message.



Tuning in to non-verbal communication

Only 7% of communication is attributed to verbal communication

Thus, non-verbal communication is vitally important in understanding the overall message and must be taken into consideration by the salesperson.

Vocal communication includes such factors as voice quality, pitch, inflection and pauses. A salesperson’s use of vocal factors can aid in a sales presentation, too. Along with verbal, vocal and facial communication, many other elements also are involved in sales communication.

People communicate non-verbally in several ways.

Three major non-verbal communication channels are the physical space between buyer and seller, appearance and body movements:

1) Physical space

Have you ever stood in a queue where people have pushed up against you unnecessarily? And do you remember how you felt? Or when an unfamiliar business acquaintance comes to speak to you and stands too close to you? How did you feel then? It makes you feel uncomfortable, doesn’t it? Usually personal space around us is reserved only for loved ones, family and friends.

Between you and the buyer that space is neither too distant nor too intimate. We need to respect other people’s space. More importantly, you need to apply this principle to customers during the sales interview. Respect the space around your customer.

38%

55%

7%



In most offices the salesperson sits directly across the desk from the customer. This is often recognised as setting up an unnecessary barrier. Although space has been recognised and given, the desk is intrusive. The salesperson may be perceived as superior and distant.

This is the reason many banks have interview rooms that allow for seating to be more appropriate. It is also important to remember that it is more appropriate to use either a round table (which means seller and buyer are not necessarily opposite each other but alongside each other) or couches around a coffee table (which is not as intrusive as a big desk).

The objective is to create a friendly, cooperative environment.

2) Appearance and handshake

Other common methods of non-verbal communication are signals conveyed by a person’s physical appearance and handshake. Once territorial space has been established, general appearance is the next medium of non-verbal communication conveyed to a customer by a salesperson. Appearance not only conveys information such as age, sex, height, weight and physical characteristics, but it also provides many clues about a person’s personality. For instance, hairstyle is one of the first things a buyer notices about a salesperson.

Salespeople should carefully consider their grooming and its impact on customers’ perceptions. Your grooming objective is to eliminate communication barriers. Can you imagine trying to make a sale when your customer can’t stop focusing on your spiky, elaborate hairstyle or your 5cm-long, brightly painted nails? Or your orange suit? The customer may find it very difficult to concentrate or to take you seriously. Interestingly, no matter how hip the customer may be in appearance, clients usually expect the banker to have more decorum and to be more conservative. Thus it is important that your grooming conveys a favourable first impression.

Wardrobe has always been a major determinant of sales success.

The non-verbal messages salespeople emit through appearance should be positive in all sales situations. Characteristics of the buyer, cultural aspects of sales territory and the type of product being sold all determine a mode of dress. Considering these aspects, create a business wardrobe that conveys positive, non-verbal messages in every sales situation.



2) Body movements

From birth, people learn to communicate their needs, likes and dislikes through non-verbal means. The salesperson can learn much from a customer’s raised eyebrow, a smile, a touch, a scowl or reluctance to make eye contact during a sales presentation. The customer can communicate with you without uttering a word.

An ability to interpret these signals is an invaluable tool to the successful sales professional. In conjunction with interpretation of body language, the salesperson’s skilful use and control of physical actions, gestures and overall body position is also helpful.

Buying-related signals in non-verbal communication

The buyer can send non-verbal signals by his or her body angle, facial expression, arm movement or position, hand movements or position, and leg position. These body movements generally send three types of messages: (1) acceptance, (2) caution and (3) disagreement.

Acceptance signals indicate that your buyer is favourably inclined towards you and your presentation. These signals give you the green light to proceed. Although this may not end in a sale, at the least the customer is saying, “I am willing to listen.” What you are saying is both acceptable and interesting.

Some common acceptance signals are:

• Leaning forward or upright at attention;

• Smiling, pleasant expression, relaxed, eyes examining visual aids, direct eye contact, positive tones of voice;

• Relaxed and generally open, perhaps performing business calculations on paper, holding on as you attempt to withdraw a product sample or sales materials, firm handshake; and

• Relaxed arm movements that are generally open.

Salespeople frequently rely only on facial expressions as indicators of acceptance. This practice may be misleading as buyers may consciously control their facial expressions. It is the total message being sent by the body language that should be noticed, though. A buyer who increases eye contact, maintains a relaxed position and exhibits positive facial expressions gives excellent acceptance signals.

Acceptance signals indicate that buyers perceive that your product might meet their needs. You have obtained their attention and interest and are free to continue with your planned sales presentation.



Caution signals should alert you that buyers are either neutral or sceptical towards what you say. Caution signals are indicated by:

• Leaning away from you;

• Puzzled, little or no expression, averted eyes or little eye contact, neutral or questioning tone of voice, saying little, and only asking a few questions;

• Crossed arms, tense position; and

• Moving hands, fidgeting with something, clasped.

Caution signals are important for you to recognise and adjust to for two main reasons. First, they indicate blocked communication. Buyers’ perceptions, attitudes and beliefs regarding your presentation may cause them to be sceptical, judgmental or uninterested in your product. They may not recognise that they need your product or that it can benefit them. Even though you may have their attention, they show little interest in or desire for your product.

Second, if caution signals are not handled properly, they may evolve into disagreement signals, which causes a communication breakdown and makes a sale difficult.

Proper handling of caution signals requires that you:

• Adjust to the situation by slowing down or departing from your planned presentation;

• Use open-ended questions to encourage your buyers to talk and express their attitudes and beliefs. “What do you think about this?” is an example of an open-ended question;

• Carefully listen to what buyers say and respond directly; and

• Project acceptance signals. Be positive and enthusiastic – and smile. Remember, you are glad to be there to help buyers satisfy their needs.

Refrain from projecting caution signals even if a buyer does so. If you project a positive image in this situation there is a greater possibility that you will change a caution light to a green one and make the sale.

Your objective in using these techniques is to change the yellow caution signal to the green go-ahead signal. If you continue to receive caution signals, proceed carefully with your presentation. Be realistic and alert to the possibility that the buyer may begin to believe that your product is not beneficial and may begin sending disagreement, or red-light, signals.



Disagreement signals tell you immediately to stop the planned presentation and quickly adjust to the situation. Disagreement, or red-light, signals indicate that you are dealing with a person becoming uninterested in your product. Anger or hostility may develop if you continue the presentation. Continuing can cause a buyer to feel an unacceptable level of sales pressure, resulting in a complete communication breakdown.

Disagreement signals may be indicated by:

• Retracted shoulders, leaning away from you, moving the entire body back from you, or wanting to move away;

• Tense face, showing anger, wrinkled face and brow, little eye contact, negative voice tones, or becoming suddenly silent;

• Tense, arms crossed over chest; and

• Motions of rejection or disapproval – tense and clenched.

You should handle disagreement signals as you do caution signals – by using open-ended questions and by projecting acceptance signals.

Responding to disagreement signals

• Stop your planned presentation. There is no use continuing until you have changed disagreement signals into caution or acceptance signals;

• Temporarily reduce or eliminate any pressure on the person to buy or to participate in the conversation. Let the buyer relax as you slowly move back to your presentation;

• Let your buyer know you are aware that something upsetting has occurred. Show that you are there to help, not to sell at any cost; and

• Use direct questions to determine a buyer’s attitudes and beliefs, such as, “Have I said something you do not agree with?” or “Am I on the wrong track?”

The interpretation of most body language is usually obvious and you accurately interpret body language in your daily routine all the time. But you should be cautious when interpreting an isolated gesture, such as assuming that little eye contact means the customer is displeased with what you are saying. Instead, concentrate on non-verbal cues that are part of a cluster or pattern.

For example: Let’s say your customer begins staring at the wall. That is a clue that may mean nothing. You continue to talk. Then the customer leans back in their chair. That is another clue. By itself, it may be meaningless, but in conjunction with the first clue it begins to take on meaning. Then the customer



turns away, legs crossed, brow wrinkled. You now have a cluster of clues that form a pattern. It is time to adjust or change your presentation.

In summary, remember that non-verbal communication is well worth considering in selling.

A salesperson ought to:

• Be able to recognise non-verbal signals;

• Be able to interpret them correctly;

• Be prepared to alter a selling strategy by slowing, changing or stopping a planned presentation; and

• Respond non-verbally and verbally to a buyer’s non-verbal signals.

You will notice that tone of voice also plays a large role in the communication process. This is even more important when using the telephone, when there are no body language cues to go on. Tone of voice is vital to the effective delivery of a message. The meaning of a message can be quite different when a different tone of voice is applied, even though the words are the same. It is the emotion of the speaker that causes the tone of voice to convey meaning.

Tone can be insulting, aggressive, amused, warm or even disgusted. Over and above the tone of voice is the volume of voice, the pitch of voice and quality of voice, all of which have a bearing on the overall effectiveness of the message.

Can you imagine how quickly you can spoil a relationship by answering the telephone with an irritated voice because you are just on the verge of rushing out of the office? That call may just be from an excellent prospective customer with whom you have been working very hard to achieve a sale. You could just have spoilt the sale forever.

Using a telephone requires specific skills. Tone of voice and words take on more importance, but at the same time some brevity is necessary – a factor not prevalent in a one-on-one conversation.

Because talking is spontaneous, it is not as easy to plan a conversation as it is to write a letter or an email.



But when you make a phone call that requires a specific outcome, make sure you take the time to plan ahead, carefully considering:

• The content of the communication;

• The accessibility of documents if you have to refer to them;

• The person at the other end of the telephone;

• Clarity of speech and message; and

• Appropriate language and style.

The idea is to:

• Cultivate warmth and friendliness in your voice;

• Although time is “ticking away”, remain calm and assured;

• Speak with confidence; and

• Avoid irrelevancies unless they are specifically brought up by the customer.

And, finally, answer the phone after three rings! A phone left ringing for several minutes is a clear way to lose potential sales.



Recognising and overcoming barriers to communication There are many reasons why sales are lost. Unsatisfactory communication is one of the most common reasons and one which the salesperson is often not even aware of.

In most instances, communication problems relate to how the salesperson’s communication disrupts or does not respect the buyer’s buying process.

Let us examine these disruptions.

The diagram below is followed by a table that explains it.

Poor understanding of the customer's

problem

Mismatch with the buying process - trying to close to soon (or not soon

enough)

Conversation does not address the

buyer's expectations of

value

Poor understanding of

customer's situation

Disruption of the buying process

Mismatch of product to need

Problem Cause Result



Poor understanding of customer’s situation

Not enough questions asked to have a clear picture of the person’s situation, or not listening well enough to the answer

Difficulty understanding needs and matching products could result in the wrong product being sold – no full value. Or no sale at all – person finds a reason not to close



Problem Cause Result

Poor understanding of the customer’s problem

Not enough questions to clarify problems or not listening well enough to the answer

Difficulty identifying correct product could result in the wrong product being sold – no full value. Or no sale at all – person finds a reason not to close

Mismatch with the buying process – trying to close too soon or not soon enough

Not establishing how far the person is in coming to a clear decision and therefore mismatching the sales conversation

Sales conversation generates a lot of caution and disagreement signals. Risk of losing sale

Conversation does not address the buyer’s expectations of value

Not asking the client what a successful solution would be to the problem and reaching agreement. Could result from merely listing features of a product without understanding whether they benefit the client, or perhaps not listening well enough to the answer

Sales conversation generates a lot of caution and disagreement signals. Risk of losing sale

Mismatch of the product to the need

Focusing on yourself and the targets and not questioning the client and listening to the answers

Either the sale is lost, is a poor-quality sale or the customer does not receive full value. Lifetime value of customer is lost

Do you notice that all the interruptions come from not asking questions that help you understand customer value?

All these barriers can be overcome through proper questioning and listening.

Advanced persuasion: Crafting your message Prospective buyers know why you are talking to them – they know you are a salesperson. So it is important that you keep your communication relevant and professional.



Your communication skills will help you achieve:

• Easier understanding and setting of expectations;

• An ability to create awareness;

• The development of the customer’s knowledge of your solution; and

• Better levels of commitment.

It is useful to prepare for the potential conversations you are likely to have with different levels, groups and categories of prospective customers. You can even visualise how ideal conversations are likely to progress, plan what questions you could ask and set objectives for how you communicate a certain message. This sort of preparation does not give you a script for a conversation – it gives you a set of guidelines and ways of going in the intended direction.

Discovering, positioning and delivering value

At some point in the conversation you are likely to discover value, which means you find out what problems or needs the customer has. You will ask lots of questions at this point and listen to the answers intently.

You could also position value, which involves explaining to the prospective customer how your potential solution or product could address their problems or needs. This part of the conversation is where you need to communicate your potential value compared with that of your competitors, but never forgetting that the value you are offering is aimed at the exact situation of the prospective customer in front of you.

Finally, you could talk about delivering value, which is predominantly about explaining how you will give the customer value according to their expectations.

So, in practice, you could craft conversations around:

• Discovering value by asking questions about what problems or needs the customer has;

• Positioning value by taking a customer through the benefits of a certain bank account; and

• Delivering value by explaining the service elements of the home loan process.

What makes behaviour persuasive?

In his research paper and published book called Buyology, Martin Lindstrom explains how everything we believe about why we buy is wrong. He discusses persuasive behaviour and dispels a number of incorrect beliefs or assumptions we all have about this.



His conclusions (from the largest neuro-marketing study ever conducted) include interesting observations that:

1. Being right is NOT a persuasive behaviour; and

2. Being logical is NOT a persuasive behaviour.

Relating this to a sales environment, it means that when we are so passionate about our products and are convinced that they are right for a customer, by telling them the facts we do not always persuade well.

But we argue we are right about this, and it is logical that product x can solve your problem, Mr. Customer. Again, not necessarily persuasive.

So what does persuade?

1. Getting a customer to conclude something; and

2. Getting a customer to ask for something.

When a salesperson can get a customer to ask for something (facilitate buying) rather than trying to push a product (even if salesperson is right and logical about it), it is a persuasive behaviour.

When a salesperson can get a customer to come to the conclusion about something (such as a savings account that will match their needs and solve their problem of saving for university education), it is persuasive behaviour.

The key is to make sure our sales approach, tactics and behaviours are crafted to be persuasive.



Conclusion Communication is the most prized skill in the professional salesperson’s toolbox.

When communication is effective, the customer’s buying process is facilitated. When it is poor the buying process is derailed or disrupted, and difficulties in the conversation occur. The sale is put at risk and so is the customer’s realisation of full value.

At the heart of facilitating the buying process is the art of questioning and listening. Without these skills, a bank cannot be profitable and sustainable. When these skills are applied expertly, though, a client can be persuaded primarily through questioning.

The use of professional communication techniques, naturally coupled with the right product knowledge, is the cornerstone of being recognised by a client as a trusted adviser. This position is the one that most salespeople strive for because it is the position that assures that endless referrals take place and repeat business is generated. It is the position that spells success for both the consultant and the bank.

The key conversation in which communication techniques are applied is the value conversation.

We will address this in the next section.



Section 10: The value conversation: Discovering, positioning and delivering value

In the previous sections we considered all the skills a consultant needs to interact effectively with a client.

These skills fall into three categories:

• First, much attention has been given to understanding banking sales in a business context and what success looks like in that context.

• Second, there are skills pertaining to understanding the world of the customer, and what success looks like from the customer’s point of view.

• Third, attention has been paid to how to use sales thinking to bridge the world of the client and the world of banking to create success or value for both.

To recap briefly, the skills that relate to bridging the two worlds that have been covered include understanding the buying process and how to match the selling process to it, as well as the persuasive communication techniques that underpin effective selling.

In this section we move on to the most critical skills in closing sales: discovering value using needs analysis and positioning value using product matching, with sales closing and implementation following on.

Understand the world of banking

Understand the world of the

customer

Skilfully bridge the two worlds to create value

for each

Effective sales



Discovering value Once successful prospecting and/or marketing has taken place, and a customer is engaged in a buying process, what remains is for the consultant to facilitate the buying process.

Considering the buying process again – it is clear that the journey through the buying process is actually a process of identifying exploring and clarifying a problem, identifying, confirming and deciding on options to solve the problem, and then choosing an option which will then be implemented and evaluated.

If we look again at the Banking Value Experience model, when a customer is in the problem solving phase of Recognising and Exploring Value, the consultant’s role is to help them Discover value.

Discovering value means that the consultant will use banking insight and questioning to unearth problems and opportunities, and to clarify them, enabling the customer to make informed choices in the next phase about what the best solution (product) is.



There are certain principles that apply to discovering value:

• What happens during this phase is that the customer develops a detailed understanding of the problem that they face, what aspects it has, and what success looks like – in other words, what the world can look like when the problem has gone away. • Generally, banks need to and do know more about the problems that clients face and the needs that arise from them, because they problem-solve in space many thousands of times more than individual clients do. This means that the salesperson is the prize – they have the knowledge and expertise to create insight for the customer.

• This process could be very quick. A couple of sentences could make a customer aware that they are not achieving full value in the transactional space because they are using too much money withdrawing cash and carrying too much cash around, which is risky, instead of using a debit card for their purchases whenever possible, thereby reducing transaction fees and removing the risk of carrying cash. This insight makes the customer aware of a problem (paying too much to transact) and educates them on the risk. The customer may not have been aware that there was an alternative that solves the problem of paying for goods in a far better way. In this way, very quickly, the customer ‘discovers value’ because the consultant is educating the client.

The insight that the salesperson is the prize because of the deep financial problem- solving skill they have often boosts the self-efficacy cycle of the salesperson: if you have the insight and expertise to make you the prize, why would you not feel confident? Why would you put a self-imposed cap on your potential? Why would you hesitate to take decisive action? Why would you not achieve results?

Classical selling in banking said “let us discover needs” and then match products to those needs. Classical selling is driven by the insight of the customer.

Aha! selling says “Let us educate our clients on their financial challenges and how our products can take care of those problems, even though they may not even have realised that they have them.”

Aha! selling is driven by the insight of the consultant and proactively creates value for the customer.



• The client’s perception of value is the focus. By asking questions on the one hand, and using insights on the other, the client’s perception of value is shaped.

• The client’s perception of value is half-based on the perception of there being a problem and half-based on the perception that there is a solution that is worth paying for.

• It is not done until it is done. There is no such thing as giving a client information – there is only the process of the customer forming a perception of value with the help of the consultant’s input. So the client may keep questioning until they have a perception of value that satisfies them.

Discovering value and needs analysis

Needs analysis is simply a technique for discovering value.

While the needs analysis approach to selling is very powerful, it must be seen as a second step in more complex sales situations. (And it is required by law for certain product types!)

If you open a sales conversation with the offer to do a needs analysis, you will get a high decline rate. People seldom have the time for a process that promises that it may or may not add value. If you open a conversation with a tangible promise of value that addresses a specific issue or problem, you will get a far higher acceptance rate.



You initial value promise suggests a problem, suggests that an alternative exists, suggests that the added cost of the alternative will create more value and make life easier or more effective in some respect.

In reality, an initial promise of value is like a pre-completed needs analysis.

A broader view of financial challenges

We turn again to the model of financial success.

To be successful in financial terms, people face certain challenges. These challenges fall into certain categories.3 Financial products exist to help people deal with these financial challenges.

3 Naturally the first challenge is to earn an income and to participate in the economy. The challenges that banking addresses only pertain to those who are economically active in some form or another.



Category Specific challenges

Transact • How to transact – what tool to use to receive income, store it for short periods, and have it available to make payments

• How to transact most cheaply, conveniently, and securely.

• How to reduce costs of transactions by using the cheapest channel, while not wasting time and effort.

• How to integrate transactional capability with other products like loans and savings and investments.

• How to minimise transactional cost by using the transactional account as a part of a set of accounts that together earn more loyalty points, effectively reducing overall costs.

• How to reduce the risk of cash holdings.

Borrow • How to gain access to the cash required to solve current challenges on the basis that it can be repaid in the future.

• How to do so most affordably. • How to do so with the protection of the law. • How to do so without becoming over-indebted

and creating financial difficulties – in other words, how to prevent today’s cash solution from becoming tomorrow’s problem.

• How to borrow to create future wealth. • How to borrow to finance a lifestyle without

becoming over-indebted.



Save and invest • How to protect surplus cash from losing value over time.

• How to do so while maintaining a reasonable level of access to the cash in in the short term, in the event of a need and while minimising the penalties for accessing the cash.

• How to provide for anticipated future expenses in the most effective way.

• How to provide for long-term situations like retirement in the most effective way.

• How to use money to build wealth while balancing risk.

Protect oneself and one’s loved ones

• How to protect one’s money, well-being and wealth by minimising the financial effects of events that result in the loss of money – accidents, illness, loss of assets, disasters, unemployment, etc.

• How to achieve this objective conveniently and flexibly so that one can easily adapt to changing circumstances, and with as little risk as possible that the planned solution does not provide the protection intended.

• How to maximise the value of the protection for the Rand paid for the protection.

• How to protect one’s loved ones from the financial and personal impact on their wellbeing or one’s own inevitable demise.

The needs analysis is a conversation (or conversations) that lay(s) the foundation for success in understanding the customer’s requirement for value across the entire space mapped in the model. A proper needs analysis ends with the definition of the value that the customer requires from a product.

The essence of positioning value is being able to recommend products that deal with the challenges the client is facing.



In doing product matching it is critical to know the products well – particularly with reference to how they solve problems, and what their features and benefits are. So product knowledge is incredibly valuable in selling – but only to the extent that it is used to help clients deal with the challenges they face, knowingly or unknowingly. This has nothing to do with the features of product – it has everything to do with the reason the product exists. For example: debit cards only exist because people always have the problem of making safe, secure transactions at the lowest cost. Banking products exist to solve financial problems.

Their features and benefits are the solution to further aspects of the problem. It is prerequisite to solving a problem with a banking product that the consultant has insight into exactly what problems the product can solve or was indeed to solve.

Remember the client is initially only interested in how well the product solves a certain problem.

Product features and benefits

The features of a product are the characteristics of a product – the things it has and will do.

The benefits of the product relate to the purpose of the product and the value it creates.

Features of the product in a service business include:

• The way enquiries are handled (e.g. by the receptionist or enquiries clerk);

• Speed of response to complaints; and

• Queries or enquiries and use of special resources or other specialists (such as calling in an expert, namely an assurance consultant/portfolio manager) who may improve service. For example, an estate agent might add the service of a conveyancer to the basic product of a sale or purchase.

The features describe what the product can do practically, and each feature should translate into a benefit. This is perceived by the customer as something of value and learning when they make the purchase.



Here is an example of the difference between features and benefits:

• The features of a cheque account will be an account that enables money to be held in the bank. Money can be deposited and withdrawn, using a cheque book, a debit order or an ATM card. Payment by way of a service fee is paid monthly. A statement is sent to you monthly showing all transactions.

• The benefits of having a cheque account include that your money is kept safe in the bank, giving you peace of mind. Whenever you want money, however, you can get it, whether it is night or day or a public holiday. If you need to pay somebody you do not have to handle cash because you can give them a cheque or make an electronic payment. The way the cheque is drawn can provide you with protection, so that if the cheque is stolen the bank will refund your money (crossing of cheques). The statement provides you with a means of control over your account, which can be accessed at any time convenient to you. (Note that the benefits of cheque accounts remain, but the problem is fraud and inconvenience – that is why electronic payment mechanisms have become so much more popular. They solve the problem of transacting conveniently, cheaply and securely more effectively and with less risk that cheque accounts do.)

Another example is that of an access bond (home loan).

• The features of the product are that the bank provides you with a loan according to certain criteria that you have to fulfil. A house can be bought and an amount of money is debited each month from your account in payment of that bond, including interest payable to the bank. An access bond allows you to pay more into your bond when you have surplus cash and allows you to access the loan (without going through the credit process again) for any reason.

• The benefits are that you are able to buy a house and live in it. It gives you an asset that grows in value while you pay for it with the bank’s money. This ‘gearing’ means that you can create wealth using a home loan. (Gearing is when you buy an asset on credit, growing the capital that you put in as the asset appreciates, but without experiencing a corresponding increase in your liabilities. That is how gearing can help create wealth.) Further, a home can provide the emotional benefit of a sense of security. An access bond has the further advantage of being flexible about your payments by allowing you to pay more of your bond than you need to, thereby saving interest payments, and allowing you to pay off your house more quickly and at a lower total cost, while maintaining access to the surplus cash you paid into the bond. If money is short, you have the facility to access the extra money that you have paid in – whether it is to improve your home, purchase a car or go on holiday.



When considering a product, keep in mind what the competitors are doing. Are any of them offering special features? Or are they all doing exactly the same thing? In the banking industry, where the majority of players are similar, with similar products and services, it is difficult to be totally different from the competitors. But where a point of difference can be established, the salesperson can benefit by attracting the customer’s attention and providing additional reasons to buy.

Finally, it may be possible to bran, bundle or package products and services. Grouping related services under one name and offering them as a package, such as a specific type of account ‘plan’, often makes it easier to sell. Such product packaging in a bank or company is usually done by the marketing division, not the salespeople, but it is useful to understand the concept. A package solves a number of problems simultaneously.

Positioning: matching products to challenges Matching products to customer challenges is clearly the crux of the sales process.

Product matching relies on:

1. Knowing the purpose,

the features and benefits of a product and being able to tell the difference;

2. Being able to understand the customer’s needs; and

3. Being able to COMMUNICATE how a benefit to the customer solves a challenge or a problem.

Understand the customer

needs Understand the product features and

benefits

Match a benefit to a

need

Skilful Product

matching



It is important to note that a benefit is a real benefit only if it addresses a customer’s express needs. If a person does not care about the price charged per transaction, is the fact that transactions fees are low a real benefit? Not to that customer! Features that are good in theory but do not address a particular customer’s problem are merely advantages. Advantages do not necessarily make people buy. There is a massive difference between an advantage and value.

I go to buy a pair of shoes for everyday use.

The salesperson keeps emphasising that the shoe is waterproof.

That might be of value to me if I spend a considerable amount of time traipsing through the wet streets of a Cape Town winter. Keeping dry is part of the problem I need to solve when I am shopping for those shoes.

If I am a farmer in the Kalahari just outside Upington, that advantage is not going to be relevant to solving the problem that I am trying to solve when I am shopping for shoes.

It would be better if he told me how snake-proof they are.



Three typical positioning value and product-matching scenarios Once there is a prospect (a customer engaged in a buying process) and you have established rapport and made the person feel at home, applying the principles we have discussed allows for needs analysis and product matching to begin.

There are three different scenarios we need to be prepared for when it comes to needs analysis. There are three different types of needs analyses you could be confronted with depending on what the customer presents.

We will start with the simplest – a situation well known to banking consultants the world over, where a customer walks in asking for a specific product. We will move on to two more complex scenarios.

Scenario 1: Low-complexity transactional purchase

Presenting situation

Customer comes into the branch and says he wishes to apply for a home loan.

Customer position in buying process

Appears to be BP 5 – he is apparently choosing your bank to purchase a home loan.

Opportunity for bank

Make a home loan sale and sell associated secondary products.

Discovering value: needs analysis and positioning value (product matching) response (after normal courtesies and establishing rapport)

Quickly confirm the need and the appropriateness of the product using questioning and listening skills.

• The client has already identified, on his own, that a certain product is appropriate for his needs.

• The consultant must confirm the appropriateness of the product and that it is indeed the best option. (The customer could be financing a vehicle through a second bond, he could be consolidating debt, or he could be buying a second property. For some of these




• needs there could be alternative credit products that could work better for him.)

• After explaining that your bank is committed to giving all clients the product that best meets their needs and gives them the most value, the consultant would ask needs analysis questions such as:

• Will you be purchasing a property with this finance?

• If yes – have you already put in an offer? What is the purchase price? Are you looking for a 100% bond?

• In this scenario, the client is clearly in BP 5 (choosing) and you are already doing the preliminaries of taking the order. But this does not mean you will get the sale; you are trying to persuade him to choose you.

• You are only being given an opportunity to create the right kind of value. Bear in mind he may be looking elsewhere, too – he may have two banks on his shortlist of possible options, or he may have only you and a mortgage originator as well. You need to be quick, offer the best rate the bank is willing to give, and provide super service.

Type of sale and value of selling process

• It is a transactional sale. The sales process is not going to add a huge amount of value. The client will be interested in efficiency (the speed and accuracy) and the cost (the rate they are going to be offered) of the sale.

• Your role is to educate the customer on how the process works and ensure that it gets done as quickly and efficiently as possible.




• You may be able to discover more value by finding out more about what other problems the client is aware of and unaware of – your key objective, though, is to position the value of your product relative to his need and educate on options and uses of the product to solve further problems that may be hidden to the customer.

• Anything that impedes this process could lose you the sale. For example, not explaining documentation requirements properly and completely may necessitate multiple trips to the branch. If the originator, for example, gets this right, you could well lose the business because someone else could get there first.

Cross-selling to BP 5 clients to maximise share of wallet

• If your bank has products that can create more value for the customer than merely being efficient and offering a good rate, investigate whether there are further needs by offering value and asking questions that discover value. (The Customer Value Matrix Tool guides this analysis)

• You would ask, for example:

• “In our experience, people who want to save money in an access bond and then want access to the cash are frustrated with making arrangements to get the cash into their account. We’ve been able to help people save and gain access to the savings in an access bond easily, conveniently, securely and at low cost by opening a current account. Would the ease of using your access bond be something that would be relevant to you?” (Sell to transactional challenges – current account)




• “When there is a bond, all banks require insurance to cover the risk that the buildings are damaged or destroyed. We’ve been able to help people who move ensure that their new asset is protected right from the beginning, without any extra fuss. May we help you gain the peace of mind that you get from knowing your new home is properly covered and that your finances are protected?” (Selling to building insurance needs)

• “Also, in our experience with owners of new homes, it is sometimes all too easy to forget to update insurance on household to the new

• address. That means that there is a risk that you could lose goods immediately after the move and not be properly covered. That is the worst time financially to lose goods because of all the moving expenses. We’ve been able to help people acquiring new houses to update their household insurance quickly and cost-effectively. Would that be something that is relevant to you?” (Sell to risk challenges - short-term insurance needs.)

• “In our experience, new home owners often want to acquire some new furniture or fittings, and face unexpected or extra expenses like moving costs. That means that they sometimes need a bit of extra cash available. We’ve been able to help people ensure that they get comfortable in their new homes as quickly as possible by providing them with credit for short- term cash, at the most affordable rate. Would that be something that is relevant to you?” (Sell to cash-flow and lifestyle challenges – credit card, overdraft, personal loan, possibly even a current account with a facility.)

• Note that selling great propositions begins with a promise of value that overcomes some obstacle




• and has some positive emotional impact.

• This is practical upselling and cross-selling in action with a client in BP 5. Essentially you are reminding them of possible needs and capitalising on the opportunity you are presented with to create further value for the customer and the bank. They may be in earlier BPs and may have other needs, but as a salesperson you can now move them forward to BP 4 or even 5, add value, help to secure the primary business, and sell some secondary

• products by meeting other needs.

• You may not personally be able to close these sales, but you will at the very least be generating leads for other sales consultants in other parts of the bank.

• By skilfully analysing the cross-selling needs you immediately add a consultative sales element to a transactional sale. You intercept needs earlier in the buying process, and by giving useful guidance on matters that the client may not have yet considered you facilitate the buying process rapidly and painlessly.

• You portray yourself and the bank as being focused on customer value and professional at creating it.

• You can achieve these outcomes only if you are not out of kilter with the customer’s buying process, and if you discover needs through questioning first before offering a product. If you do not first discover needs you may appear too pushy.




• Note that any further needs in this example, as well as the opportunities they present to the bank, are triggered by the same change and the problems emerging from it. That is why understanding the effect of changes over time is so critical to effective selling.

The more you can use insight to turn transactional sales into consultative sales, the more relevant you are to the customer, the more professional and informed you can be, and the more sales you will make. The more successful you are as a sales person, the more you solve the problem that brought you into the job in the bank: the need to increase your earnings, enjoy a rewarding job, and have quality of life as a consequence.

We now move on to a medium-complexity situation, in which the customer knows they have a need and knows that your bank could satisfy it. They engage the bank from this position in the buying process, not yet sure what the best specific solution would be. The selling process looks different.

Scenario 2: Medium-complexity consulting purchase – an investment or savings product


Customer comes into branch and states that he wishes to invest a lump sum.


Appears to be BP 4 (assess) – he is considering a purchase and he is assessing the available options.


First help the client compare or assess the available products and then decide which one of your products best suits his needs – then make the sale. This entails facilitating the buying process through BP 4 (assess) and into BP 5 (choose).

This client has engaged the bank earlier in the buying process.




Discovering and positioning value: Effective needs analysis and product matching response (after normal courtesies and establishing rapport)

• The wrong response is to immediately push a one-year term deposit because your bank is having a one-year term deposit campaign and it has targets for which you are responsible. You may get there, but you must put customer value first.

• So you start by establishing the situation and the problem. “What is the source of the lump sum? What are you saving it for? When will you need it? Would you need it to be available or do you mind if it is less readily available but earning a better rate? Do you have debt you could settle with the capital?”

• These questions clarify the need. You can use further questions to extend the need by asking what the consequence would be if a need were not met. “If you could not get immediate access to the money at all times, what problems would that cause? If your money did not earn the best rate available over one year, what would happen?”

• Once you have a clear definition of what represents value to the customer, you can identify the product options that are available. You have a clear definition when the customer has stated what would be the priorities in making the decision. Is it the rate on offer? Is it access to the money? Is it some combination of the two?

• You then explain the available product options, showing how the features of each option address the needs the customer has expressed. You now help the client compare the options in relation to his/her needs. You are not yet suggesting the best option – you use open questions to allow the client to reach the conclusion regarding the best option.





• It is a consultative sale.

• The sales process adds value because it helps the client make a clear and informed decision. The sales process allows the client to learn something about his/her needs and how best to meet them.

• The client is going to be interested in the clarity and helpfulness of the information you supply. It will be clear if it is organised relative to what he needs. You have to present it according to his needs, and you cannot do this unless you have used great listening and questioning skills.

• Your role will be to educate the customer on the options and their benefits and, once s/he chooses the best option, to show how the process works. Then you will ensure the purchase is completed as quickly and efficiently as possible.

• Anything that impedes this process could lose you the sale. For example, not explaining the options and trying to push a product too soon may cost you the sale. The client is ready for BP 5 – to choose – only once they have assessed – BP 4 – the available options.





• In the course of the conversation you may identify a range of things. For example, you may discover that this customer is debt-free. Is there some financial life cycle event or other change of over time that could require credit while the money is tied up in a fixed-term investment? For example, could the person be intending to buy a vehicle once the proceeds of a house that has been sold result in the cash that the person wishes to invest? A new cash flow would certainly give the person more room to use a credit product.

• Life cycle events and changes over time could be linked to the same event that triggers the immediate and obvious problem and need that the customer brings into the branch.

• You need to be alert to the impact of changes over time, the problems they cause and the needs that may emerge from them. You could identify a range of possible needs and opportunities emerging from the same event, and you could trigger the recognition of a new need. For example, you could ask what it would be like to pay off the bond while having some cash stashed away. You could ask if he might not think of replacing an old vehicle, or acquiring some new furnishings. These might be credit product opportunities that did not exist before you asked a question that triggered a thought process.

We now move on to a more advanced scenario.



Scenario 3: Higher complexity consultative purchase – a new set of banking relationships


A customer comes into a branch and says she wishes to open a bank account. The customer looks to be about 35 and is smartly dressed.


Could be BP 3, 4 or 5. You have to investigate further to decide.

You ask what the situation is that has given rise to her needing a banking account. She explains that she has been working overseas for a few years and has now returned. She explains that she has a basic savings account in SA but now needs a bank that will give her the full range of services as she encounters new needs, such as frequent transacting, buying assets and so on. She will also have savings and investment needs, as she has an investment portfolio and some cash saved up from when she was working overseas.

You conclude that this person is in BP 3 (search) – she is busy searching for ways to meet a range of needs. She does not yet have a range of clearly identified options, so she cannot yet begin to assess them.





First help the client identify what options would meet her needs and where to begin. Then help her assess the products and choose the right combination of products. Then support the combinations with secondary products. (Sell multiple products, establish a long-term relationship with an affluent customer, get in early and develop a significant share of wallet.)

Discovering and positioning value: effective needs analysis and product matching response (after normal courtesies and establishing rapport)

• The wrong response is to immediately push a plan or package on to the person – for example a premium cheque account with a card, an overdraft facility and a savings account product. You are trying to get the customer to choose too soon. Even if you know that the product is right, you have to get the customer to the point that she concludes that it is right, otherwise her questioning will probably lead you back to BP4, and then back to 5. But she will likely get irritated and you may lose the sale because you are out of step with her buying process.

• You start by establishing the situation and the problem. Why did you return? What were you doing overseas? Are you settling down here? Do you intend to stay for a prolonged period? What sorts of things are you going to need to satisfy your transactional, credit, savings and investment needs?




• These questions clarify the need. You begin to get a picture of the customer’s life and her needs in a broad context. You establish her income, what segment she falls into, and begin to form impressions about what product options might meet her needs. In so doing, you clarify and prioritise her needs under the headings of transactional, savings, investments and credit.

• You then present the various options so she can complete BP 5 (assess). You help her identify each product – be it transactional, credit, savings or investment – that is available to meet her needs. These options might be combinations of standalone products or predefined packages aimed at particular segments.

• You establish her more immediate needs in respect of cash deposits, transactional requirements and plans to use credit, showing how the features of each option address needs she has expressed. You are now helping the client compare the options (BP 5 – assess) in relation to her needs. You are not yet suggesting the best option – you use open questions to allow the client to reach her own conclusion regarding the best option.





• This is also a consultative sale, but a more complex one.

• The sales process adds significant value because it helps the client make several clear and informed decisions. The sales process allows the client to learn something about her needs and how best to meet them.

• The client is going to be interested in the breadth of the solution relative to the needs she articulates, and the clarity and helpfulness of the information you supply.

• Once again, it will be clear if it is organised relative to what she needs. You have to present the information according to her needs, and you cannot do this unless you have used your cultivated listening and questioning skills.

• Your role will be to help the customer identify the available options and combinations of products and educate her on the options and benefits. Then, once she chooses the best option, you will need to show her how the process works before ensuring the purchase is completed as quickly and efficiently as possible.

• Anything that impedes this process could lose you the sale. For example, not explaining the options and trying to push a product too soon may cost you the sale. The client is ready to complete BP 5 – to choose – only once she has searched – BP 3 – and assessed – BP 4 – the available options.





• In the course of the conversation you may identify a range of secondary needs. The key here is to not be too greedy. You need to satisfy the main needs first and then look for opportunities to create further value.

• The individual’s return to South Africa is a major change and is going to occasion many problems that require financial product solutions.

• Once again, you need to be alert to the impact of changes over time, the problems they cause and the needs that may emerge from them. You could once again identify a range of possible needs and opportunities emerging from the same event, and you could trigger the recognition of a new need. For example, you could ask whether she has a will to protect the assets she has built up.

• You could ask whether she has a partner who is returning to the country with her, and whether this individual does not also have financial needs.

There are many reasons salespeople are regarded poorly, but the single biggest reason for their bad reputation is because products or services are often sold to people who do not need them.

Sometimes customers would be better served buying a different product to fix their problem, address their need or suit their budget, but smooth-talking salespeople are able to convince them their products suit them best. Sadly, the customers’ expectations are often not met and the bank’s reputation can be damaged, which results in a lose-lose situation for both bank and customer.

On other occasions a bank underserves a customer because it does not create the value it could. It hands business to a competitor in this way, severely reducing the lifetime value of a customer and the bank’s share of wallet.

In this way the bank makes life that little bit more complex for the customer in failing to present an easy-to-use point of service. If the person in scenario three is talking to two banks in BP 3, the winner will be the one with the more integrated, easier solution. This depends on the quality of the questioning and the skill with which the consultant matches the selling process to the buying process.



Closing the sale Closing a sale occurs at the end of BP5 – the customer makes the purchase, creates a legal relationship and agrees to a transaction in exchange for value.

When the client has successfully reached the conclusion of the buying process, it is the natural next step for the salesperson to ask for the business.

Say: “Shall we go ahead with the application?”

Or: “Shall we open the account?”

“Can we implement this now?”

“If this meets your requirements, shall we go ahead?”

There is nothing special about closing if you have managed the selling process correctly.



Handling objections

The idea of ‘objections’ is deeply embedded in traditional sales thinking.

It comes from the idea of the customer resisting the persuasive force of the consultant. However, in reality an objection is just an indication that you have not fully understood an aspect of what the client wants or shown how your offering exactly creates value for them.

In other words, objections arise when the client’s perception of the value you are positioning is not fully developed. The client cannot see:

• That the problem is fully understood and clarified; • That the solution fully deals with every aspect of the problem; • That there are no hidden twists and turns that will alter the value; • That the transaction process is simple enough to justify getting the

value; and • That the cost of the solution is a fair exchange of value.

That is why the correct way to deal with objections is to confirm needs and reposition value, exploring what situation or factor is making the customer reluctant to proceed to BP 6. Once again, this requires questioning and listening.

An objection is useful feedback that allows you to add more value by facilitating the buying process even more effectively.



Conclusion

The discovering and positioning value conversation links the bank’s offerings to the client’s needs as they move through their buying process. It culminates in a sale.

An objection helps you make a better sale.

This is the scientific, customer-centric approach to sales. It is clearly a logical process that does not rely on obscure powers of persuasion or any hidden ability.

It relies on a proper understanding of the situation and a proper, systematic way of managing it, coupled with energy, as well as a commitment to professionalism and a willingness to learn.

It should be remembered that an important aspect of sales professionalism is a commitment to understanding and maintaining compliance with the various acts that govern banking sales, in line with bank policies and procedures.

In the next section we extend the principles of this section to the topic of cross- selling, merely to emphasise some of the points already made – cross-selling is no different from any other type of selling.



Section 11: Maximising the bank’s share of wallet

In this section we consider how the principles of professional selling can be applied to the situations of cross-selling and up-selling.

This section elaborates on some of the principles covered in the previous section.

The importance of maximising share of wallet through cross-selling

In Section 2 we introduced the concept that many customers use more than one bank. This is because banks are not necessarily able to discover and position value when potential or even existing customers are engaged in a buying process for another product.

This means that they spend money on products and services from various providers, including a range of banks.

For many customers banks have only a share of wallet – a proportion of each customer’s financial service business.

One of the key sales objectives of a bank is to cross-sell other products and services to existing customers before another bank or another third party meets their needs. By selling further products and services, banks:

• Create more value in a customer’s life;

• Make the relationships they have with customers far more profitable;

• Significantly increase the lifetime value of the customer to the bank; and

• Reduce the risk that the customer will leave the bank. (Statistical analysis shows that the greater the number of product relationships a customer has with a particular bank the less likely they are to leave.)

Cross-selling that results in a greater share of wallet is therefore critical to long- term, sustainable growth for banks.

There are certain key principles that underpin effective cross-selling.



Principles of cross-selling

Principle #1: The best time to cross-sell is when the initial sale is made

When an initial sale is made, a proper understanding of the client’s financial life cycle and possible problems and needs will allow the consultant to properly explore opportunities to add value and make sales.

To illustrate:

• A 24-year-old walks into a bank and asks to open a savings account. She is employed and earns R12 000 a month.

• The consultant, using good questioning techniques, can quickly establish the customer’s situation in terms of marital status and investigate problems and needs associated with establishing whether she requires credit to acquire assets such as cars and a place to live, beginning with investments for children’s education, putting an amount away for retirement, as well as any of the needs associated with her age range and her actual situation. The woman may be thinking of buying a car or furnishing a flat. She may be happy to consolidate banking relationships to make life easier. She may want to save for the arrival of a baby, which will mean, in due course, the education of the child will need to be catered for. These are simple examples of other buying processes that may be happening already or may be triggered by changes that will occur soon.

• There is no chance that the bank can create these kinds of value for the customer unless they explore needs. Order-taking executes the customer’s instructions; professional selling explores needs and creates customer value by solving problems.

Banks fail to make cross-sales, not because the customer does not know that the bank has the products, but because the banks do not fully explore needs and position value when they have the best opportunity.



Principle #2: Changes over time relating to the customer’s financial life cycle present cross-selling opportunities

Identifying important milestones and events in a client’s life by using the financial life cycle framework for reference will allow a consultant to proactively contact a customer and look for changes over time, problems, needs, and position products and services earlier in the buying process – during buying phases 1, 2 or 3. This gives the consultant the edge over competitors when the customer moves through the buying process into steps 4, 5 and 6, because the consultant can position him/herself foremost in the customer’s mind as an option to meet the need and solve the problem.

To illustrate:

• It is week two of a new school year. Moms are focused on getting kids established in school.

Analysis:

Possible life cycle of school mothers of grade 1 children

• Phase 1 — problems associated with expanding liabilities, need to establish and manage increased need for credit, raising children

Changes over time • Winter is coming

Problem • Kids will be cold

Possible needs • Money to pay for winter uniform obtained on credit

Opportunity for bank to add value

• Allow moms to pay off winter clothes expenses over six months

• Grant an unsecured loan to qualifying moms

• Encourage the moms to open a savings account, save what they can and fund any shortfall through a short-term unsecured loan

• Make it as easy as possible for them to deal with application documents



Options to generate leads

• Address parent gatherings at schools about responsible use of credit to support schooling. Focus on winter as an example. Give practical advice, such as how to use savings and credit together for best effect. Get parents to appreciate the value of developing a positive credit profile for future needs. (Research shows that customer education is one of the most critical aspects of helping customers succeed financially in emerging markets.)

• Offer them the easy route to opening a savings account. Make it easy for them to apply for a loan.

• Do this with all the schools in your area.

• Contact all your existing female account holders in the age range with a “SPIN” campaign – S: “Do you have school children”? P: “How difficult is it for you to pay for school expenses”? I: “Could this leave you short of money in winter”? N: “Will you perhaps not need to save a bit more and borrow a bit more from time to time to make ends meet”? Benefit statement: “If so, we have an offer for you. We will help you save, earn some interest and borrow when you need to. And we can save you the trouble of worrying about this when it’s already getting cold and you have your next expenses at the beginning of winter.”



This example is obviously brief and cut down to the point where it lacks any subtlety, but it illustrates a point. It may not work in reality – but it also may. The question is: how many bank branch sales campaigns target mothers with grade 1 children in a predominantly LSM 4-5 (lower-middle income area) with a financial life cycle, needs-related offer of a possible short- term loan for a warm uniform in four months’ time when winter is beginning to arrive?

The point of the example is that if Bank A does not do this, school moms will find the money they need one way or another, and considerably fewer of them will open savings accounts and get credit from that bank. They will go off to the local micro financier, another bank or perhaps an uncle. Very few will let their kids go cold.

There is massive scope for bank sales and marketing teams to engage in creative problem-solving to reach clients before they make BP 6 decisions!

The table below illustrates how a primary product purchase can create opportunities for the sale of a secondary product.

SPIN Selling proposes there are four types of questions, thus SPIN stands for:

Situation (questions) Problem (questions)

(questions) Need-payoff



Primary product: Examples of complimentary or secondary products:

Examples of cross-selling opportunities that may occur:

Home loan Life insurance Customer buying a property

Home loan Home owner insurance Customer buying a property

Home loan One account Customer wanting to consolidate his/her debt

Home loan Personal loan Customer wanting to decorate/build additional structures to the property

Cheque account Overdraft Customer wanting to have access to extra/emergency cash

Cheque account Credit card Customer wanting to have access to extra/emergency cash

Cheque account Loan/bond Customer wanting to buy something specific to his/her needs

Retirement plan Will Customer wanting to get his/her affairs in order



In many respects, sales opportunities are limited by the imagination of the salesperson as much as they are by the objective environment. The creative professional finds opportunities by analysing situations of change and understands how these situations trigger needs. This is a lateral thinking habit that can be cultivated by asking six questions.

1. What is the change in people’s lives in a particular situation in this market?

2. What problems come with it?

3. What financial needs might there be?

4. What value could our bank offer to address those needs?

5. How can I gain access to people in this situation?

6. What message could I give them to create interest in engaging our bank in a buying process?

These are the kinds of questions that make prospecting a creative endeavour. Principle #3: Every service contact, handled correctly, may present cross-selling opportunities

• Imagine if every teller asked every client who looked like they might be in the 20 to 30 age range whether they were considering buying a car, and referring those who said yes for follow-up by the VAF or relevant sales consultants?

• Imagine if every ATM asked a customer who fell in the 50 to 60 age range whether they had thought about optimising the risk of their investment products?

• Imagine if every person opening a savings account at Bank A asked every customer that banked at a more expensive bank what they could do with a saving in bank fees over the next 10 years if they moved to the cheaper current account option that Bank A offered and saved the difference in the savings account they were opening?



Up-selling Up-selling is when you sell a client an upgrade of a product.

Why would a client purchase an upgrade?

Because it creates more value, solves a problem better, eliminates a problem, enhances the outcome that the customer achieves.

Here is a poor attempt at upselling:

Consultant Mrs. Smith, I see from our system that you qualify for an upgrade to a platinum card. Would you like to upgrade? [Leads with product, not with value.]

Mrs. Smith Why would I want to do that? What do I get? [Trying to discover the value in the offer. What problem does it solve for me?]

Consultant You get a silver card. You can get more credit. [This is not necessarily a solution to the customer’s problem. Do they need more credit? Maybe the customer is trying to get out of credit card debt.]

Mrs. Smith Look, I’m in a bit of a rush. Could you call me next week? [Polite decline.]



“A professional salesperson always acts with the best interests of his company and his customer above his own.

There is, resident in the psyche of every professional salesperson, an obligation to ‘serve’. Ultimately, the professional salesperson serves two masters: his customers and his company. A professional understands that the sales he makes are the tangible expressions of win-win solutions for the customer as well as profitable transactions for his company.

The professional will not ‘push’ an inappropriate solution on to a customer just to make a sale. He’s in it for the long term, understanding that his reputation as a professional is worth far more than any individual deal. ‘Integrity’ is the overriding personality trait and adherence to a strict code of ethics is the specific expression.

The unprofessional salesperson sees his company’s management as, under the worst scenario, the enemy with whom to contend, and under the best as a somewhat less than competent irritant to be tolerated. The professional understands that he is an employee of the company and has a responsibility to nurture the company’s interests. He is mindful of his need to provide a return on the company’s investment in him and seeks continually to increase his profitability to his employer.”

Dave Kahle

http://socialmediatoday.com/davekahle/558015/what-s- professional-sales-person

http://socialmediatoday.com/davekahle/558015/what-s-



Here is a more effective approach:

Consultant Mrs. Smith, I see that you are signed up for our loyalty scheme but you are not yet getting the full benefits of it. That means you are paying more than you need to every time you go shopping. You could move you loyalty earnings to the next level and save considerably more money on all you purchases if you upgraded your card. You would also have instant access to more credit in the event that you needed it. Would that be something that would be relevant to you? [Positions offer with value to the client – the problem is that she is paying more than she needs to for everything she buys with her banking products.]

Mrs. Smith What does it cost? [Client can see the value – now questioning the cost of the value on offer and if there is a good exchange of value.]

Consultant If you upgraded your card at a cost of R40 per month, and you used it for your transactions, you could save ... let me see … about R3 000 per year that you could spend at any partner stores or ….(insert details of the value the loyalty scheme provides.) That is quite a bit of money. Would you like to upgrade? [Quantifies the exchange of value and asks for the close]

Mrs. Smith That sounds good. How long does it take to do? [Client is now resolving concerns – the value has been clearly positioned, the client is seeing whether to initiate the transaction now.]

Upselling is no different to selling or cross-selling.



Conclusion

This section illustrates cross-selling and up-selling.

The most important things to remember are the following:

• An existing relationship only gives a bank the opportunity to access existing customers. It does not give it any other real advantage in the buying process of customers.

• This advantage is useful only if the bank can get to prospective buyers earlier in their buying process – when they are in BP 5 or BP 6 the bank has lost its advantageous position, and may or may not be considered.

• The barriers to cross-selling may be slightly lower than barriers to acquiring new customers – hopefully your existing clients already know and love you for your great service. But each sale is a new sale – it solves a problem by addressing a new need with a new solution.

• Effectiveness in cross-selling and upselling relies on being able to discover value and position value quickly, clearly and efficiently. It is not about product features and presumed benefits.



Section 12: Transacting and complying

Congratulations! You’ve solved a customer problem with a banking product! In other words, you’ve made a sale. (If you’ve made a sale without solving a problem, return immediately to chapter one and begin again.)

Now for the last hurdle. The thing that people used to think was sales – but in fact is merely the administration to complete the transaction. The procedural and compliance step. Documents, verifications, disclosures, forms, and records.

Administration and implementation: the last hurdle to value

Implementing a sale is the final stage in the buying and selling process. It corresponds to BP 6 (obligate), which is the setting up of the contracts, and BP 7 (implement), which involves the bank delivering the service.

Most salespeople dislike administration. It will always remain a necessary evil, however. Good administration ensures that a sale is properly translated into value for both parties. Systems must be updated, reports must be populated, forms must be filled in, follow-up calls must be made and records must be kept.

If these things are not properly executed, the customer will potentially be inconvenienced because the product will require further interactions, wasting time and resources, and the bank will not have the data it needs to monitor its progress and plan for the future. That is not something a professional wants to be associated with. Remember the objective: create full value for the customer!



Critical success factors at the point of completing the sales transaction

This aspect of selling is relevant when the client is at BP6, where the client has chosen a solution and is now entering into the set of legal obligations and commitments that formalise the sale, and initiating the service. Bear in mind that the customer is entering this stage with a fully formed perception of value as to how the product is going to solve some problem. The key thing now is that the customer wants as direct a journey to having the value as possible.

Most banks have excellent systems and procedures for ensuring that conformity to internal

processes is built into systems and standing instructions. The same applies to compliance with regulatory requirements. Efficiency is always a key consideration in designing and developing these systems.

There are however certain important points to bear in mind from a sales point of view. As always, we begin with the customer’s expectation of value. At this point, efficiency is the primary driver of full value. The value of the sales process has been added – the transaction itself merely consumes time, from the consumer’s point of view, unless there are demonstrations of the product use that are important. (For example, the use of a security token or a password per SMS.)

• The customer wants to know what is happening, and is willing to make reasonable commitments of time to complete the administration required to receive the value they are paying for. They do not want to be surprised by onerous requirements, extra visits and phone calls, requests for further information etc.

• The customer wants the transaction to proceed as quickly and efficiently as possible – there should be no hidden obstacles lurking here, and no new information that alters the perception of value.

From a sales point of view, it is important to manage expectations at this point in the selling process.

• How long will this process take right now? • Are there further requirements that mean I have to supply further

documents or make a physical visit to complete a process? • How soon will the product be activated? • Are there any tips for using the product that will enhance my user

experience?



A great sales person will give a quick overview of the process at the beginning, and provide an estimate of how long it will take.

Regulatory compliance

Banking is a highly regulated industry, and the sales process is one of the more regulated aspects of banking.

The first important reason for the focus of regulation on the sales process is that regulators recognise that purchasers of financial products are vulnerable to exploitation. This gives rise to a range of legislation protecting customers if they purchase things they do not understand, cannot afford, or which lose them money. Typical examples are the National Credit Act (NCA) and the FAIS Act.

The second reason for close regulation of the sales process is that criminals use banks to launder the proceeds of crime. There is international agreement on the measures that banks must adopt to prevent money laundering, and these measures translate into domestic legislation in many countries, including South Africa, where FICA is almost a household word.

“Good product choice, Mrs. Smith. We are just a few steps away from your having the money from the personal loan in your account, so you can go and buy those school uniforms your kids need.

We just need to complete the documents that keep everything neat, tidy and legal. The process will take about seven minutes, and there will be no need for further visits or documents after that. We are going to verify your details, confirm the loan details and pricing, discuss repayment arrangements, and that will pretty much be that. Once we have all that, the loan will be in your account in about two hours, and your first repayment date will be 31 March. Shall we proceed?”



The third reason for regulating sales pertains to the danger posed to an economic system if a bank takes on too much risk in its credit book. If a bank fails because its debtors cannot pay it back, it can bring down an entire economy, which is broadly what happened in the credit crunch that started in 2008. In 2012 the global economy was still trying to recover from bank failures associated with overly risky lending. This regulation is evident in central bank requirements for banking capital reserves driven by the Basel III accord. This translates into credit policy and funding decisions that have a direct influence on the kinds of sales that banks pursue.

The common threads in all compliance requirements are the need for transparency and customer-centricity, and the need to manage risk in a healthy manner. For the sales professional these should be second nature in any event.

The worst thing a bank salesperson can do is break the law. It will jeopardise the value to the client, the value to the bank, the consultant’s reputation, and may expose the bank to potentially massive fines and reputational damage.

In this course we have focused mainly on sales and not the compliance requirements that form part of sales. A detailed examination of the various compliance requirements is beyond the scope of this particular body of knowledge. There are important pieces of legislation to understand and detailed practices that must be adopted, such as issuing a pre-agreement quote for any credit in terms of the National Credit Act.

Most of these compliance requirements are engineered into bank processes in order to create auditable records of bank compliance. In the sale of credit products in the personal market, for example, a declaration of income and expenditure must be obtained from the customer to avoid the offence of reckless lending under the NCA. The credit systems and processes of the bank will be designed to ensure that the step is completed. The same applies to the proof of needs and proof of disclosures required by the FAIS Act – there are documents to be completed that ensure that compliance is maintained, and all banks have their own training regarding specific acts. This is why compliance training is not covered in detail in this manual.

It is incumbent upon the consultant to understand the compliance requirements for each product in detail, and to abide by them strictly. On the whole, compliance requirements help you add value for customers and protect them, so it is important that they understand your facilitative role, as well as the legalities themselves, in a positive light. The compliance requirements are not going away!



In a sales situation pertaining to savings and investment products, as well as insurance of all types, FAIS comes into play. There are some FAIS-affected roles, whereas others are not affected by it, and this varies greatly between banks. It is extremely important to understand whether you are in a FAIS-affected role or not and what the compliance requirements are that you need to adhere to.

You may need a specific level of qualification, be required to write exams, work under supervision or undergo accredited continuing professional development. Your bank’s compliance function is the port of call if you are uncertain about any of the requirements.

You will also need to understand the interpretation your bank has adopted of what constitutes financial advice, and if you are not FAIS compliant avoid giving anything that could be construed as advice.

Banks are fortunately extremely capable when it comes to dealing with compliance, and more senior personnel and professionals enabling the sales function will certainly provide the guidance required.

Communicating compliance requirements to the client

Remember that the laws exist to protect the economy society and the consumer. You should always emphasise this in communicating what can be a tedious task for the consumer. The law is there for the benefit of the consumer, at least in part.

A professional does not blame the law for an inconvenience. A professional uses compliance to reinforce the value of the service.

“Mrs. Smith, there a few things that we need to do to comply with the country’s laws. Part of what you get when you deal with ABC bank is strict adherence to the law of the land – we insist on keeping our customer safe and informed, and on protecting society from crime as far as we are able. Now to do this, I’ll need to confirm your address as reflected on a rates account.”

“Mrs. Smith, our bank’s ethics and the law of the land require that we check your income and expenditure before we confirm the loan. That way, you can be sure that when you deal with us, we will never lend you too much, so we make sure that the repayments get you into financial trouble… we make sure we save you that stress…”



Conclusion

Done correctly, compliance and procedural conformity are merely an aspect of what a professional does to ensure that full value is created for the customer.

‘The characteristic that separates the professional from the dilettante is an uncompromising commitment to excellence – doing what is required to get the job done at its highest level, even when it is inconvenient. An amateur is capable of doing some things well under the right conditions, but a professional, as a matter of course, does it well regardless of the situation.

A professional is passionate, motivated and punctual. A professional respects the respectable but admires the inspirational. A professional is a seeker of knowledge but also a teacher. A professional is disciplined, has the highest standards and is engaged in the constant pursuit of unattainable perfection. A professional is restless and never satisfied, always evaluating and re-evaluating where they’ve come and finding ways to do what they are doing better now, today, moment to moment.

“I have offended God and mankind because my work did not reach the quality it should have.”- Leonardo da Vinci, artist, died 1519, last words’

Brian Rigsby

http://envoc.com/2010/12/professional/

http://envoc.com/2010/12/professional/



Conclusion: Aha! High Impact Banking Sales Behaviours Programme

This body of knowledge has positioned sales in banking within a broader context of the evolution of the sales profession and changes in the banking industry.

It proceeded to develop the critical skills for understanding the buying behaviour of the customer, and provided instruction on how to match selling behaviour with buying behaviour.

This diagram appeared at the beginning of Section 7. In concluding, the diagram is also relevant.

The module has built the skills necessary for effective sales

The remaining task is for the sales professional in banking to develop these skills to a level of mastery and reap the benefits of doing so.

Over to you.

Understand the world

of the customer

Understand the world of banking

Effective sales

Skilfully bridge the two worlds to create value for

each