Almost all community bank executives talk about the importance of developing a sales culture at their banks.

But fewer are willing to back that pledge by developing the building blocks of such a culture.

Among the community bankers surveyed by the American Bankers Association, 35% report that they give incentives - such as cash or free trips - for making cross-selling referrals. Among the smaller banks, those under $100 million of assets, only 24% pay incentives.

Those numbers dwarf the percentage of banks that are willing to grant incentives for customer retention. Only 4% of the banks think that is appropriate, even though it is far cheaper to hold onto a customer than it is to attract and sign up new ones.

And only one in five community banks has a "marketing customer information file," a computer-based file that allows banks to track individual customer behavior based on past sales activity.

Consultants who specialize in developing incentive and sales programs say that small banks need to be doing better.

"While community banks have made tremendous progress in the past few years, the big banks are still way out in the lead in terms of developing true sales cultures with rewards, training, and measurement of success," says Arthur Foley, president of Leadership Development Systems, a Carey, N.C., consulting firm.

Mr. Foley urges banks to reward employees for desired behavior, but adds that those rewards need not be cash. "That's just one part of the reward triangle," he says. "There's also recognition by senior leaders and the opportunity for advancement within the company" because a customer has achieved certain desired behavior, he adds.

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