friends who fought the trust and private banking integration wars back in the 1980s -- recently expressed his frustration about how his company, though it seemed to have done the "sales management thing" right, did not get the results it expected.
Despite a commitment to "manage by the numbers," two troubling trends kept emerging: Pipeline conversion was low, and cross-selling results were poor.
I suspect that my friend, who works in the wealth management area, is frustrated not by the focus on "the numbers" but by which numbers he is focusing on. Let's take a step back to gain perspective on his problem, starting from the broad view and then looking at the details.
I will start with strategic planning. Often overlooked in this annual exercise is the definition of a company's or division's value proposition. This is nothing more than determining, in non-numerical terms, the unique value a division brings to the marketplace. This examination has the effect of keeping everyone focused on the marketplace to avoid becoming "just another discount broker" (or lender, private bank, corporate trust department, etc.).
Try this exercise: Get a select group of managers, salespeople, and support staff in a room and tell them to pretend that their division is about to be closed. Then ask, "What will our market lose with our departure?"
One would hope for some enthusiastic shouts: "Our unique products Our creative approach to solving our clients' problems Our exclusive understanding of our client base "
More likely, after a few furtive glances around the room, someone will mumble, questioningly, "The quality of our people?" That would underscore how tentative our hold on market share is and how restricted we are in our ability to move the numbers.
Most people buy from an organization because of one of only three factors, or a combination of them -- price, product, and delivery. In our industry, where even sophisticated products are commodities and the concept of "shareholder value" leads to razor-thin margins, pricing flexibility is a thing of the past. The only factor we can compete on is the delivery of our products and services, and that puts the focus on our people. The value proposition exercise defines for our people what the organization believes every customer interaction should look like from the client's point of view.
Many organizations are adopting the "trusted adviser" model for their professionals -- people with whom a client can establish such trust and intimacy that they will be sought out for advice and counsel. And if a request falls outside the adviser's area of expertise, the adviser will work diligently to find the appropriate answer.
The discipline behind this approach is consultative selling. This model states that to find the proper product or service for our client we need to know everything we can about the client before we present anything. It is no longer sufficient to bring solutions to clients' problems.
Bankers have been doing this for years. In fact, we are acting as trusted advisers only when we bring solutions to problems that clients do not yet know they have. Only then do we elevate ourselves from product pushers to true consultants.
Companies have been doing trusted-adviser training for years. Concepts such as establishing credibility and empathy with the client, asking thoughtful and provocative questions to uncover hidden as well as obvious needs, are familiar.
Once the training is complete, the challenge is to establish processes and indicators that ensure the client experience remains standard, consistent, and competitively superior. Many times these processes and indicators are developed and defined as part of an ongoing coaching process meant to reinforce the skills associated with the consultative selling process.
Which brings me back to my friend's dilemma. As he spoke about his desire to manage to the numbers, it was clear that what was being managed to were "result numbers": new clients, revenue increases in the portfolio, investment accounts sold.
All these are important to all levels of management. But by the time monthly reviews come about, the same disclaimer can be made that our investment brethren bandy about with ease -- past performance is not a guarantee of future results. Result numbers are interesting in an historical perspective but are almost worthless in managing a sales force.
As a sales manager, I couldn't care less what the results are It's history, old news. I have a contract to pay my people a certain amount for their results. Many managers make the mistake of using the compensation program as a surrogate for management. That is not the job of a compensation program.
Yes, it communicates to a sales force how valuable certain types of business are to an organization and, therefore, can send a powerful message about how the sales force may want to spend its time. But the overriding principle of management is, "manage activities and reward results." The lack of focus on activity management is what leads managers into the box my friend finds himself in today.
My advice to my friend is to take a strategic approach to sales management. Define the unique value you are going to bring to the marketplace. Define for your people what the typical client experience should look and feel like. Train your people in consulting, to make sure every salesperson understands that the sale is not about the product or the profit but exclusively about the client and the client's satisfaction with the result of the sale.
It is most important to redefine the numbers you manage to. What leading indicators of success will be reported along with the lagging indicators that we are all so familiar with? Indicators that are yours and yours alone should speak to your sales group and its unique cultural and competitive challenges.
Sure, my friend's boss will still want "the numbers." But having a thorough understanding of the specific activities and frequency of those activities that led to those numbers -- the results -- will let my friend almost predict results. And I predict he will have fewer sleepless nights.
