January Virtual Learning Lab
Sales Success in 2010: The Right Sales Training Can Get You There

Featuring David Stein, President & CEO, ESResearch Group
Friday, January 15, 2010, Noon EST (11:00 a.m. CST)

Dave Stein kicks off the SM&H Virtual Learning Lab series for 2010. An internationally respected consultant and much-sought-after speaker, Dave outlines how to select a training partner that is a “fit” for your organization and how to maximize ROI in all training efforts.

Dave also promises a list of books, blogs, and newsletters to supplement your formal learning initiatives.

Click the link below for more information.

http://www.stmeyerandhubbard.com/workshops/

Onboarding Series Reprised

By Ron Buck,
St. Meyer & Hubbard Center for Excellence

During 2009 Ron Buck contributed three feature articles targeting Onboarding. We got so many excellent comments on the series, we decided to bring it back as our holiday present to readers.

Part One: Onboarding - A New Perspective

If you think about it, there is a certain cadence to conversations with any of our relationships. There is a frequency (or rhythm) to the conversations we have with our spouses, parents, friends, and children. Every person we know or love has an expectation of how frequently we should talk. It is not the same for every relationship—the frequency is higher for those we love and lower for others. Some relationships require a higher regularity and others naturally fall into a slower cadence. But one thing is for sure—we cannot develop and deepen relationships without a shared expectation about how often we will talk. When someone moves away and we don’t talk to them for a year or so, the relationship weakens. The same is true with our customers. Customer relationships weaken when conversations are intermittent—or only driven by the customer.

I view Onboarding as those conversations we have with our new customers during the first couple months after they open new accounts. More accurately, Onboarding is a transition between the conversations we have while we are helping them open new accounts and the conversations we have while we try to deepen and strengthen the relationships over a lifetime (CRM). The strength of each customer relationship is directly related to the cadence and quality of those conversations. Although the frequency is different for each customer, our cadence should always be in harmony with those things that build trust: transparency, collaboration, intimacy, and self-orientation on the customer’s needs.

Onboarding conversations begin during the new account opening process. The purpose of the conversations is to be totally transparent and collaborative—asking for permission to call in two weeks to follow up on:

1. The fulfillment of products like checks and cards: Based on our research, the average 90-day retention rate of these products is about 86.8%—a huge dent in our production goals.
   
2. Surprises: Many problems arise when customers realize that they need to have a minimum balance or have been charged an unexpected fee. Surprises have a big impact on the 90-day retention rate, accounting for over 20% of our losses in the first 90 days.
   
3. The purchasing decision: One of the most important reasons for Onboarding is to support the original purchasing decision and make sure the customer still feels like he/she made the right product selection. About 7% of customers feel they have made the wrong product decision. This conversation includes repeating the discovery agreement that was the basis for selecting the product.
   
4. Expand the relationship: Onboarding is a good time to learn more about the customer and give the customer an opportunity to learn more about us. This includes introducing them to the branch manager, teller supervisor, and tellers. About 74.6% of customers are in the middle of life events that are driving financial needs.

These four reasons give us the opportunity to build trust and deepen the customer relationship. Onboarding also sets the cadence for conversations we plan to have with the customer, a cadence with which the customer starts to feel accustomed. Specifically, we send personal, handwritten notes (not canned CEO letters) in two days to thank the customers, we call in two weeks to address the four issues above, and we send our first personalized marketing messages in two months based on what we have learned during new account openings and Onboarding conversations (not something Marketing arbitrarily comes up with).

However, Onboarding also allows us to determine the cadence of our conversations for each specific customer. If we have a conversation in two days, two weeks, and two months and then we wait for the customer to come to us, there is no cadence and the customer has no expectation about the relationship. Conversations become intermittent and one-way. The relationship weakens and the customer is open to offers from other banks.

We can set the cadence during the two-week call by asking permission to call in X months. This is defined in a new Onboarding process I call 2-2-2-X. Based on the customer needs and the salesperson’s assessment of the relationship potential, we can determine X (the next time we will have a conversation)—and we transparently set the expectation with the customer. The cadence should feel natural to both parties.

2-2-2-X: The New Onboarding Equation

The new 2-2-2-X Onboarding process has the possibility of huge rewards, but there are also huge risks. All credibility and reliability is lost if the salesperson is unable or unwilling to keep the commitment in X months, thereby destroying trust.

Part Two: Your Onboarding Strategy–What Would Charles Green Say?

In October 2009 Charles Green helped St. Meyer & Hubbard launch its new Virtual Learning Lab series. We are all big fans of Charlie around here. He embodies “thought leadership” and his presentations always get my wheels turning. So, on the heels of his great presentation, I feel compelled to apply his philosophies to the process of Onboarding—specifically to your Onboarding strategy.

Our research over the past six years, with 350 financial institutions, indicates that the existing Onboarding strategies are not working as intended. In fact, our research shows that new customer retention and growth numbers have actually deteriorated despite all the multi-step Onboarding efforts. We studied over 200 financial institutions that had a multi-step Onboarding strategy and here is what we found: over the past six years, the average 90-day retention rate has decreased from 88.2% to 86.8% and the average products-per-new-household ratio has decreased by over 15%. Despite all the efforts, results are getting worse.

In fact, our research shows that Onboarding has been torpedoed by low customer trust—a result of the wrong orientation and poor execution.

For those that have read the Center for Excellence Six Disciplines of Execution white paper or attended one of our webinars on this subject, you may remember the traditional business formula: strategy times execution equals results.

S x E = R
Strategy x Execution = Results

I think Charles Green would tell you that trust is a hidden but vital variable in this formula. You can have a great Onboarding strategy and execute it well, but still get derailed by low trust. High trust could serve as a performance multiplier.

S x E x T = R
Strategy x Execution x Trust = Results

Above all, success in business requires two things: a winning competitive strategy and superb organizational execution. Distrust is the enemy of both. Just look at the math. Let’s suppose you have an excellent Onboarding strategy and a strong ability to execute, the following chart illustrates that the net result can be either torpedoed by low trust or multiplied by high trust. In other words, “customer distrust is very expensive”.

Onboarding allows us to determine the cadence of our conversations based on mutual expectations. The quality of our conversations is what Charles Green talks about. All customer conversations provide relationship managers and customers a safe opportunity to exchange words, take actions and share a mutual orientation towards the other’s success. Building trust is a two-way effort. Charles Green talks about the following Trust Equation.

C + R + I = T
S

Credibility + Reliability + Intimacy = Trust
Self-Orientation

So how does this apply to Onboarding?

Throughout the organization, there are many views of the purpose and tasks of Onboarding. I have talked to so many sales and marketing executives who view Onboarding as a series of steps (2-2-2-6) to improve retention or cross-selling. Many times, sales management views Onboarding as a personal note in two days and a call in two weeks. The marketing staff typically views Onboarding as a series of direct mail campaigns during the first months of the relationship. Too frequently, both sales and marketing are eager to sell the customer as many products as they can—as fast as they can.

Charles might suggest that Onboarding is a time to focus on the customer’s needs and the bank’s motives rather than focusing on the bank’s desire to sell products. By giving the customer a gift of its time and attention, the bank gets what it wants—retention and growth. Relationship managers should be prepared with their words and their actions to build credibility and reliability. Specifically, if the relationship manager says she will call in two weeks, she should call and make an honest attempt to connect with the new customer. If there is a fulfillment issue with checks or another problem, she should know how to resolve the problem and quickly take action. In this way, trust and execution are inexorably linked.

So, how do we measure trust?

Performance (or lead) measures are those indicators that are predictive of results and influence-able by the frontline employees (for example: two-week follow-up). Trust, then, is an important performance/lead indicator of all sales results.

Performance scorecards for the new Onboarding process should include four lead measures that are determined during a customer survey, which is taken 60 days after the new account is opened. Customers are asked specific questions related to the trust equation, scoring their responses on a scale of 1-10. Scorecards reflecting goals and customer feedback are compiled at the individual, branch, region, and organizational levels.

As with other lead indicators, trust is predictive of the desired results and directly influence-able by the relationship managers. When we incorporate trust into this method of keeping score, we keep the focus on the customer’s needs and place a premium on credibility, reliability, intimacy, and orientation.

The new Onboarding strategy certainly includes the tried-and-true personal note, the call in two weeks, the initial direct mail campaigns, but also an important customer survey in 60 days to measure the customer’s level of trust. The level of trust will gauge the words, actions, safety, and focus during the new account opening process and the first two months of a relationship—the predictors of 90-day retention rate and products-per-new-household.

Below in part three of my series, Sandra Styler joins me to share Charles Green’s ideas on the 60-day survey.

Part Three : Questions for a New-Customer Survey
Sandra Styer, Trusted Advisor Associates LLC co-authored this article with Ron Buck

The article above addressed trust and how the components of trustworthiness are the leading indicators that predict the success of Onboarding. This month I am joined by Sandy Styer. Together we will help you understand how to measure trust as a leading indicator of successful Onboarding. Sandy heads the Trust DiagnosticsTM practice at Trusted Advisor Associates and brings a bit of banking background as well, having worked at Chemical Bank before its merger with JPMorgan Chase. Sandy has developed a New-Customer Survey for your Onboarding strategy.

In 2008 Charles Green developed a self-assessment, the Trust Quotient Quiz, based on the Trust Equation, and offered it on the Trusted Advisor website [www.trustedadvisor.com]. It’s a 20-question tool for measuring individual Credibility (words), Reliability (actions), Intimacy (safety), and Orientation and has now been taken by over 10,000 people who’ve not only found out their own TQs, but also gained powerful insights into what they can do to become more trustworthy. This is the largest-ever study of its kind.

These 10,000 responses have proven the strength of the Trust Quotient Quiz and have also given Trusted Advisor Associates a rich field of data.

Just where do bankers stand in reporting on their own trustworthiness?

• Commercial bankers ranked themselves highest among all 40 industries reported in overall TQ scores. As a group, commercial bankers scored extremely high on Reliability.
  
• Retail bankers were not far behind, ranking fourth among all 40 industries represented on the TQ scores. This group leads with a combination of Reliability and Credibility.

What are the practical implications of the Trust Quotient and the TQ Quiz when it comes to Onboarding new accounts?

The idea developed in earlier articles in this Onboarding series is that the level of trust created in a new relationship between the bank, or people at the bank, and the new customer is a reliable, predictive, and influence-able indicator of how solid the relationship is and this is ultimately reflected in both 90-day retention rates and products-per-household. Incorporating trustworthiness into measurements along the way not only predicts the level of the lagging indicators, but also helps focus attention on specific areas where action is needed to increase trustworthiness and specific means for doing that.

A trusted relationship takes two parties: one to trust and the other to be trusted (or be trustworthy). The Trust Quotient Quiz can work on both sides of that equation. First, the TQ Quiz can be used as an internal tool to help bank staff become more trustworthy by:

• Introducing them to the four components of being trustworthy and becoming trusted advisors to their customers
  
• Specifically highlighting their personal strengths and weaknesses when it comes to building trust and suggesting concrete ideas for action
  
• Starting a dialogue and introducing new behaviors which go beyond “hitting the numbers” or “making the sale” to “helping this customer for the long-term” which will, ironically, help them make their numbers

Trusted Advisor Associates recommends using the personal TQ Quiz in a supervised setting, bringing staff members together to review and discuss their personal results after they’ve taken the quiz online. One key to becoming more trustworthy is not to rely on strengths, but to improve the weakest areas from the TQ—and this is where people often need help.

On the other side of the equation is the customer, the one who trusts. How does the new customer really feel about his or her interactions with the bank, with the teller, with the branch manager or loan officer? Typical follow-up surveys, by asking questions like “How satisfied were you with the service you got …?” often miss the mark at getting at the underlying attitudes and residual feelings of the customer.

It’s beneficial instead to focus on the four components of the Trust Equation and ask questions like:

• “I was put at ease in my conversations with [X]; I knew what to expect from him or her” to measure the empathy component of Reliability, or
  
• “The conversations I had with the bank’s personnel were real; they weren’t scripted and I didn’t feel pressured to buy any particular service” to measure Self- or Other-Orientation

The answers to these and other questions can reveal where training or hiring practices are effective. All too often the response to poor performance on the lagging indicators is to push more product information down to the frontline staff when, in fact, the missing pieces are usually in the softer skills like Intimacy. By checking in on how trust is—or isn’t—developed in the early days with new customers, scare resources can be focused on addressing the key issues, yielding not only the fastest return, but also the biggest bang for the buck.

Trusted Advisor Associates has developed a new version of the Trust Quotient Quiz specifically for new customers which can be used for assessing how customers react to the trustworthiness of individuals or groups such as call center personnel. You can access the customer survey at: http://trustedadvisor.com/public/files/pdf/
TA_Questions_for_a_NEW_111209_1.pdf.

Of course the final step in the circle is in sharing these results with customer-facing staff in a way that people can see, understand, and use to make changes in their own behavior. Suddenly the spotlight is no longer on “Did I make my numbers?” (a lagging indicator), but “How can I best help this customer who’s in front of me right now?”

These are the customers who will still be with you in 90 days.

Sandy Styer can be reached at sstyer@trustedadvisor.com or 973.625.9390.
Ron Buck can be reached at rbuck@stmeyerandhubbard.com or 480.318.8018.

Register for Conversation Signposts

This edition completes our sixth year of publishing Conversation Signposts. One thing we appreciate is that more than 15,500 sales professionals now receive this practical newsletter. If you wish to have someone at your organization receive the newsletter, register by clicking below:

http://www.stmeyerandhubbard.com/signup.html

Allowing Us to Be an Approved Sender

In today’s security conscious environment, many times our newsletter ends up as junk. To make sure you receive every issue, why not add newsletter@stmeyerandhubbard.com to your “approved sender” list or address book?

Jack Hubbard Chief Experience Officer 847.717.4328 jhubbard@stmeyerandhubbard.com Bob St. Meyer President 847.717.4322 bstmeyer@stmeyerandhubbard.com