With the help of acquisitions and a red-hot economy, many major banks have posted excellent growth and earnings over several years. Behind these numbers are statistics and anecdotal evidence that suggest a more disturbing trend: North America's biggest banks are being outsold.

In most consumer and business-to-business product categories, and particularly among high-value clients, the largest banks are losing market share to nonbank competitors and even to smaller banks. According to recent consumer surveys, purchases of investments and insurance from banks and customer loyalty among high-value clients are declining.

Despite the institutions' spending millions of dollars for sophisticated data warehouses, new delivery channels, and sales training, shopper and client satisfaction studies by RSM McGladrey and other firms that monitor sales activities indicate that sales effectiveness is improving at only a handful of major banks.

Why are the banks with the greatest resources achieving such a low return on their investment? Simple: There is a breakdown in focus and accountability, and it starts at the top, where the senior executives make decisions about sales that are far removed from the field and lacking a practical understanding of the dynamics that drive successful selling.

Sales management is simple, but it is never "easy," because it requires the time, focus, proactive leadership of senior managers. In the absence of focused leadership, sales unit managers are often let off the hook for poor production, for failure to adhere to a bank's sales process, or for failure to develop their salespeople as long as they are meeting their financials.

This just doesn't happen in other industries, where sales processes, developing key personnel, and generating revenue are viewed as the principal accountabilities of line managers.

After 20-plus years of sales consulting to banking organizations of all sizes, we see a pattern in the mistakes made by the largest institutions. Such mistakes, typically avoided by nonbank and small-bank competitors, explain why the largest banks are being outsold. Here are 13 of them.

1. Over-reliance on technology. The larger and more high-tech the institution, the more likely the belief that sales occur by "immaculate conception" through preprogrammed automation or sales management software. This belief seems to foster the notion that with access to technology there is no need for bankers to get their hands dirty with selling or coaching.

As a result, marketing customer information files, , sales reporting, and contact management programs are barely being used in selling or coaching, and salespeople often view features built into branch-platform automation as a hindrance to personal selling. Instead of devoting energies to selling and coaching, many bankers use the new technological tools for overanalyzing their opportunities, diverting attention from live interactions between salespeople and their customers and supervisors.

2. Avoidance of accountability. In the largest banks, there is seldom one strong sales leader responsible for each line of business. This void in leadership leads to committee decision-making and outsourcing of both sales initiatives and the accountability for their success. As a result, there is no ownership within the bank for increased production or for management of a preferred way of selling, the cornerstone of successful nonbank organizations.

3. Poor integration of sales functions. Virtually all large banks have established processes for each functional area of sales management, ranging from recruiting, training, and coaching to goals, measures, appraisals, and rewards, yet most are dissatisfied with the way in which these functions reinforce each other. The larger the organization, the more likely it is that these functions are politicized and at odds with one another.

4. Substituting the trendy for the basics. In recent years, most large banks have become enamored with sophisticated segmentation schemes, computer-based training, new channels of delivery, culture and service quality initiatives, and local market management.

In the face of lean staffing, the combined impact of these initiatives has been to divert the focus of line managers away from more basic revenue generating activity. Improvement in selling requires a substantial commitment to a sustainable management process and to live skill-building practice and field coaching.

5. Reliance on numbers over process. The best sales organizations have one thing in common: They give their sales process the same level of importance as numbers, knowing that if they work the process well, the numbers will be there. Most large banks reward short-term profitability at the expense of sales process, sending a message to managers that process doesn't count.

Banking is one of the few industries in which managers are not appraised and rewarded for coaching and development of their personnel. How can salespeople get better without being observed and given constructive feedback?

6. Passive recruiting. In conducting sales management training at large banks, there is a striking reluctance of line managers to make clear demands for performance. The usual rationale is that stating clear expectations will cause some employees to leave and that they will be difficult to replace. This idea is unheard of in other industries, where goals-focused sales managers actively recruit top performers and weed out nonperformers fast.

7. Distorting sales with acquisitions. Acquisitions can hide weakness in same-store sales comparisons, resulting in less commitment to selling. More important, the promise often made to leave merger partners autonomous almost always leads to weak expectations at the very time when the acquiring institution most needs to generate revenue. The longer the acquired bank operates independently, the more difficult it is to jump-start recurring revenue flows or to establish a unified sales culture.

8. Micromanaging. The largest banks have measures, reports, and charts for every activity, to the point that salespeople have too many conflicting priorities and lose their focus on their most important opportunities. A good example is the overemphasis on calling activity. Other industries have found that managing call objectives and strategies weekly and before calls actually begin has a much more positive impact on production than reporting every completed action.

9. Focusing on the wrong clients and prospects. Every bank knows that the top 3% to 5% of customers contribute most of profits. The largest banks just can't seem to reach consensus on who these customers are and what to do with them.

Unlike many smaller organizations that have used models developed by firms such as Raddon Financial Group to create high-value customer portfolios, the largest banks have typically outsmarted themselves by adhering to current profitability, even in the absence of good profitability data. As a result, a sales unit's best salesperson is often assigned full-time responsibility for retaining and developing a portfolio that has little potential for development.

10. Selling in silos. The more dedicated sales units a bank has, the less likely it is that a customer's relationship will be managed in its entirety by one sales unit, or that unified sales goals will be established for the relationship. Nonbank competitors are much better at setting relationship goals and team-selling their high-value relationships.

11. One-shot sales initiatives. Unlike the best sales organizations in other industries that tend to invest in training on processes that produce real mastery of selling, the largest banks tend to roll out sales initiatives to thousands of employees at a time in one-shot programs with little or no follow-up. Our small and midsize clients tend to make extended and consistent commitments beginning with mastery of fundamental selling skills.

12. Not selling the sales process. In many large organizations, the most competent sales leaders are often far removed from the sales force, which is a barrier to modeling of best practices and to selling the bank's preferred sales process, sales mission, and meaningfulness to front-line employees. They need to be selling the missions and their expectations to sales unit managers in quarterly sales accountability meetings.

13. Buying sales with incentives. The biggest mistake of all may be attempts to "buy" a sales culture by using incentives as a substitute for good supervision and sales processes. For sales positions with varied accountabilities, goal achievement has proven to be a stronger, more sustainable performance driver than sales incentives.

The most successful sales organizations are moving more toward performance bonuses and stock options for leadership positions; a balanced-scorecard bonus approach for most sales positions to reward profit contribution and client portfolio development; and recognition programs to extend their budgets. Incentive compensation works in moving behavior, but at too high a cost if it is merely a substitute for good supervision.

With an unrelenting emphasis on ownership and accountability that drives their continuing sales focus and active recruiting of effective people, nonbanks are simply outperforming the large banking groups. Community banks and credit unions are outselling many of their larger competitors and sustaining customer loyalty with true portfolio management of their best customers and with proactive, coaching and direction of employees by senior managers.

The impact of poor selling on shareholder value goes well beyond simple losses in market share and share of wallet. Selling to the wrong prospects and clients and the inability to justify higher prices with differentiated value through personal selling results in lower profit margins. With shareholders and stock analysts monitoring and valuing banks' sales effectiveness, selling smarter ultimately translates into higher shareholder value.

The largest banks have huge competitive advantages in terms of resources, customer base, and product mix. Yet, with regard to sales, these banks will always be underperforming with regard to their potential shareholder value unless they get serious about focus and accountability for sales. This has to be a managed process. Mr. Schneider is president and chief executive officer of Schneider Sales Management Inc., Englewood, Colo., and author of "the Feel of Success in Selling." His firm is conducting a research project with the University of Colorado Business School on the traits of top-performing salespeople in banking.

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