There is no longer a clear
leader among UK retail banks in branch network sales productivity.
The performance range between the highest and lowest-performing
banks narrowed during 2009, while average sales continue to trail
the strongest-performing banks in Western Europe, according to
Finalta.
Go deeper with GlobalData
Finalta’s 6th annual
Sales Productivity Benchmarking and Best Practice Study,
found the difference between the top and bottom-performing mass
market advisers (or personal bankers) at UK banks had reduced to
18% in 2009, from a gap of 47% in 2008.
Finalta highlighted four key
reasons why the performance range has narrowed:
- Standard sales management
practices. UK retail banks have considerably enhanced
their sales management capabilities. This improvement has been led
by the branch manager, who is now universally recognised as the
pivotal sales manager. Most banks now have good and consistently
applied disciplines for managing under-performance and driving
activity, and have applied similar operating rhythms such as
morning and end-of-day meetings and weekly adviser one-to-ones. As
sales management practices have standardised across banks, so too
has productivity; - Improved
incentives. Most banks have moved compensation to a higher
degree of variable pay, with much greater objectivity in the
allocation method. There are also more frequent incentives, more
uncapped schemes, and a greater proportion of the variable reward
going to the highest performers. Banks have also linked incentive
systems to sales quality. While some differences exist between
actual schemes (for example, some are monthly and others
quarterly), improved incentives have without question led to a
greater focus on productivity; - More integrated sales
forces. The branch manager in most UK banks takes overall
responsibility for roles working within the branch team. In some
banks, the mortgage, bancassurance and affluent sales forces were
previously separate business lines, with limited lead sharing
between them. Integrating the model enhances cross selling,
especially when incentives exist for collaboration. This has
enabled banks who implemented these changes to catch-up; and - Impact of the
recession. The unique economic circumstances during the
period have had a levelling effect for a number of reasons.
Firstly, credit tightening has become prevalent, impacting lending
productivity and mortgage advisor productivity in particular.
Secondly, savers have spread deposits among banks more than before,
increasing savings productivity across the market. Thirdly, banks
have had an even greater focus on investments as a key source of
revenue, leading to an increase in bancassurance adviser sales
productivity. Finally, taking all these factors together, there is
some evidence that year-on-year variation is due to financial and
political difficulty experienced by individual banks.
How to achieve sales
leadership?
The study suggested banks can focus
on two key areas in an attempt to increase sales productivity:
improve the quality of customer meetings and the time available to
spend with customers.
US Tariffs are shifting - will you react or anticipate?
Don’t let policy changes catch you off guard. Stay proactive with real-time data and expert analysis.
By GlobalDataTo increase branch sales, the
report recommended a number of initiatives, including:
- Planning. Clearly
articulate a plan for growing the business linked to the specific
opportunities and customer trends within the branch’s local market,
running the branch as if it is the branch manager’s own
business; - Meeting
preparation. Put in place a system for confirming and
preparing for customer meetings. Develop capability by facilitating
daily advisor meetings to discuss upcoming appointments; - Observations.
Observe customer meetings, providing feedback on the completion of
financial reviews, especially on softer skills of rapport building,
listening, questioning and presenting recommendations; - Post-meeting
follow-up. Ensure branch staff operates an effective
system for following up actions agreed in customer meetings, often
vital in delivering a positive customer experience and closing
sales; - Recognition.
Recognise advisers that are helping customers on their broad range
of finances through multiple sales per meeting, over those that are
achieving a small number of higher value sales; - Incentives.
Leverage the incentive scheme so advisors set their own targets.
Branch managers should work with them to formulate how to achieve
it through their customer base, increasing buy-in and
empowerment; - Training. Develop
adviser confidence in the full range of customer’s finances by
continually improving product and financial expertise, especially
important for younger and newer advisers; and - Communication.
Use daily meetings to highlight topical customer questions and
rehearse how to talk to customers about these.
The report found that, in the
best-performing banks in Western Europe, branch staff spend close
to 50% of their time with customers. Moving towards this level
would increase sales productivity by over four sales a week in the
average UK bank (assuming the time is filled with meetings and no
change to sales conversion rates).
