From the Mind of the Chief Experience Officer

There are numerous noteworthy times in the life of a business. This month’s newsletter is one of those milestones. Who hasn’t read, quoted, and attempted to live the message of the book The Trusted Advisor by Charles H. Green and David H. Maister. Published in 2000, it became an instant classic. Charlie Green has honored us by writing an article focused on trust, containing elements of his new book, Trust-Based Selling.

A top sales manager at one SM&H client purchased the book as a holiday gift for each of her associates. The bankers review a chapter at each team meeting. Then, the manager facilitates a conversation that links the concepts of Trust-Based Selling to the experience she wants her bankers to have with their clients.

We were going to feature a review of Trust-Based Selling also, but in the spirit of our 2006 resolution of newsletter brevity, we’ll say simply this: Buy this book today! From trust-centered negotiations to replacing elevator speeches with elevator questions, the material in this must-read, must-have book is exactly what your bank needs, regardless of size.

Relationship Strategies, Vultures, and Fake Trust

By Charles H. Green

In November 2005, the Bank Administration Institute (BAI) published a study that found “nearly 70% of consumers are not interested in a deep, multi-product relationship with their primary financial institutions… ”

The newsletter continued, “…underscoring the bad news for retail bankers [was] BAI’s survey of 500 retail bankers last year…that found relationship banking is the most popular value proposition banks try to communicate to the marketplace, with service quality a close second. [The new] research…shows that only 31% are interested in relationship banking, 29% are essentially neutral, and 40% actively skeptical.”

Another study (by Deloitte Consulting LLP with the Consumer Banking Association) “…revealed that two-thirds of the 19 banks studied averaged cross-sell rates of 1.5 to 1.7 products per household. Fifty percent of all households for this group of banks were found to be single product holders, despite the banks’ considerable investments in new products and technology aimed at fostering closer customer relationships.”

JPMorgan Chase notwithstanding, the right relationship apparently is not everything—in fact, it may not be much at all. What is one to conclude when two-thirds of customers react to the preferred industry strategy with indifference at best and with active hostility at worst?

My guess is the BAI study doesn’t mean that consumers aren’t interested in a banking relationship. Relationships make objective sense for many consumers. What the study probably tells us is that consumers don’t trust the people claiming to offer that relationship.

Customer Focus and Vultures

Much has been written about customer focus. We hear about sophisticated customers who will leave if we don’t focus on their needs. We hear about the virtues of customer loyalty and the gospel of measurements like “return on customer”. The key to competitive success is to do a better job than the next guy of serving customers. And so on.

But there’s a dark side to that theme. The reason to be so customer-focused is almost always phrased in terms of the benefits to the seller. And that changes everything.

Customer focus, as it is practiced in business today, is the focus of a vulture. It is all about the benefit to the seller. The customer is treated as an object, a means to the seller’s ends. Yes, we want to serve customers better—but for our sake, not theirs. Then somehow we are surprised when consumers see this as cynical. In our rush to dissect the consumer brain, we have forgotten that motives matter.

I’m not talking about ethics—I’m talking about the simple facts of trust. We trust those we believe to have our interests at heart. We distrust those we believe to have their interests at heart. But we particularly distrust those who pretend to be the former, while behaving like the latter.

Consider another industry even harder hit by trust issues: pharmaceuticals. One of the drug manufacturers’ wounds is self-inflicted—the relationship between physicians and reps.

Doctors have long relied on reps to keep them up-to-date on new drugs—an important and valuable role. In recent years, the drug companies tried to increase the sales effectiveness of these reps. They did so by increasing the number of reps per doctor, focusing on hiring young and attractive people. They introduced complex measurement systems to evaluate rep performance and purchased sophisticated statistical data to calibrate the impact of rep visits on physician prescriptive behavior.

Sensible steps all, at first blush, but they’ve produced negative results.

How did this happen? Each change in the system was motivated largely, if not entirely, by a desire to increase physician prescription-writing for the drugs of the pharmaceutical company. That motivation was very clear to the doctors—and there was no benefit evident to them. Like most persons in such a situation, the doctors reacted negatively. A past trusted relationship was degraded in terms of trust because the seller was motivated only by the seller’s needs.

Relationships and Fake Trust

When customer focus becomes largely a tool for seller profit improvement, consumers notice and become cynical. Lately, the language of customer focus is adopting the language of relationships, fostering yet another layer of cynicism.

Think of “relationship”, “loyalty”, and “trust”. All once had significant emotional connotations—for “loyalty”, think “semper fi” or “’til death do us part”. For “trust”, think the bonds of a handshake or of fiduciary responsibilities.

But loyalty today is often defined as repeat purchasing behavior, to be tweaked by price promotions and “loyalty programs”. Brokerage firms talk customer focus but aggressively drive disagreements into binding arbitration, usually favorable to the broker. “Customer relationship management” software is sold on the basis of its ability to create customer profitability analyses (profitability to the software owner, that is, not to the customer).

In the dating world, it’s considered forward to say you want a relationship on the first date—but in business, we’ve gone one better and made it a marketing slogan before we’ve even met the customer.

Relationship concepts have been hijacked in service to selfish motives. When a company’s ad copy says, “you care about your children; that’s why we here at XYZ Corporation are doing blah blah blah”, the company is not only lying, but lying baldly and shamelessly about their motives. What is at stake is no less than the meaning of words and therefore the credibility and trust of the company saying them.

Successful Relationship Strategies

If a bank wants to implement a relationship strategy successfully, it needs to do two things.

1. Use Actions, Not Words. First, let your actions speak for you. Words aren’t just cheap—they’re destructive if they’re fake and you’re the one saying them. Trust is not an ad campaign. A person or company who says “trust me” is guaranteeing we won’t.

It’s great to have customers say they have a relationship with you or that they feel loyal or that they trust you. It’s fine to talk internally about how to achieve these things. But the relationship and the trust are cheapened and compromised when turned into ad copy for self-promotion.

The only valid relationship ad campaign worth doing is an internal one like “Just Do It”. Live the relationship; don’t brag about it. Your retail, wealth management, and business banking clients get the point and the best advertising is word of mouth.

2. Be Truly Customer-Focused. The most difficult thing to do in Trust-Based Selling® is to stop viewing everything from our own perspective. The economics of trust-based selling rest on a paradox: if we do what is good for the consumer, we will gain more than our proportionate share of business. It may not come from this transaction, in this quarter, or even from this customer—but it will come. Nothing motivates repeat business or referrals better than a trust-based relationship with the provider.

“Best practices” and financial analyses are often used to assess the profitability of each product or service. In today’s world, such practices and analyses are defined in ever-smaller, ever-shorter, ever-narrower slices.

Such practices cause a problem, because they blind us to opportunities to serve our customers. In the perennial Christmas movie, Miracle on 34th Street, the Macy’s Santa Claus is nearly fired for recommending that a customer go to competitor Gimbel’s for a particular product. That is, until the Macy’s chairman realizes the profound increase in customer trust produced by Santa’s approach.

Being truly customer-focused means believing in the superiority of customer relationship strategies over competitor-focused strategies; the medium- and long-term over successive short-terms; and truth-telling over spinning.

The good news is the field is wide open for a bank that is willing to practice what everyone else only preaches—serving the customer, believing that to do so will ultimately return more than the self-serving, narrowly calculating strategies of the vulture can ever hope to do.

A truly customer-focused relationship strategy built on trust is the best deal going. It is rare: most competitors are afraid to try it. It is powerful: ask any successful salesperson about the power of trust. And it is proven—just look at your own behavior as a buyer in relation to a seller you trust.

Trusting relationships have to start with the seller. Go ahead, take a risk. The ultimate paradox is: taking a risk ends up being the lowest risk. Being trusted is a very low-risk, high-return strategy

Ask the Coach: Trust Based Coaching

Welcome to your new column. Each month we’ll feature a question sent to us by one of our readers that addresses the topic of sales coaching. We’ll pose the question to a panel of St. Meyer & Hubbard coaches and share their responses.

Continuing with the trust-based theme of this month’s issue, we’ve asked our coaches to answer a question they’re frequently asked by their own coaching clients:

I know that establishing trust is a cornerstone of an effective coaching relationship. What’s the best way for me to go about building trust with the people on my sales team?

Most any human relationship can function in the absence of trust, but the relationship will not thrive, grow, or bring to either party optimal levels of performance. In fact, over time, without trust, most relationships will break down and cease to function.

To maximize employee activity in the workplace today, establishment and growth of trust between manager and employee is foundational. Working with more than 225 sales managers as our clients, we find the following steps help build and sustain trust:

1. Selfless concern for and commitment to the associate’s welfare. Showing the banker that the coach wants to see them grow and succeed goes a long way to establishing trust. Linking the words “I believe you can do this” to an actionable strategy to show them they can, help give the employees the confidence they need to forge into new territory and accomplish new feats.

2. Establish clear agreements and keep your promises. Let associates know up-front what you expect and what you will and won’t accept in terms of their performances. Research shows that most people in today’s workforce really do want to do what’s expected of them and want to be on the right path in order to succeed. Contrary to what some might believe, most employees want to play by the rules. Many times, they don’t know what the rules are. In today’s evolving banking landscape, we can’t always describe things in true black and white. But when everything is gray, people become confused, disengaged, and unproductive. Clearly lay out performance expectations and hold your people accountable.

Keeping the commitments you make is the say/do concept Mr. Green referred to in his book. Nothing builds trust faster than congruence. When a roadblock appears that may potentially prevent you from following through, let your team know what’s getting in the way and what the revised plan of action will be.

3. Demonstrate respect. There is another human being sitting across the desk from you who may or may not share your same point of view, communication style, thoughts, and/or feelings. Don’t become someone you’re not. People see through this tactic—it is a trust destroyer. Try to look at things from the coachee’s point of view and work to communicate with the person in such a way that helps him/her feel comfortable to open up and share thoughts and ideas.

4. Provide ongoing support. Encourage your employees to try new activities and actions, including those involving some risk. Growth in people does not come from status quo. Good coaches challenge their people to explore new areas and new behaviors that may feel uncomfortable at first, but ultimately can result in a higher degree of confidence and success.

In order for this to work, and for trust to be established, the coach needs to provide a behavioral safety net. Observe, provide feedback, reinforce, and encourage your employees. Just like when we remove the training wheels from a child’s bike, we don’t just go back in the house and hope the child doesn’t fall off. We stick close by, cheer the success, and encourage the child when he or she does fall, to get back on the bike to try again.

5. Continuously demonstrate personal integrity, honesty, and sincerity. We’ve all heard the adage “walk your talk”. When it comes to establishing trust, this needs to be more than just a clever catchphrase. An employee who sees his or her manager demonstrate behaviors that are consistent with what the manager says in public and private is more likely to trust that manager and put forth his or her own best performance.

Be honest with the people you coach, even when a message will be hard for the employee to hear. Most people really want to know how they can improve their performance and will ultimately have greater respect for and trust in a manager who provides honest, constructive, and straightforward feedback.

A good coach asks for feedback on his or her own performance. Asking the question, “As your coach, how can I help you do more of what you need to do to be successful?” lets employees know that you want to be as effective in your role as possible, in order to help them achieve greater success in their own.

6. “Listening earns you the right to be right.” This quote from Trust-Based Selling says it all. Coaches many times know the answer and everyone wants to be correct. One key to successful coaching is not to be right, but to do the right thing. Sometimes that means that your associate has the answer to the problem and the coach needs to ask the right questions to bring the conclusion to the forefront. There are “tell-oriented managers” and “ask-oriented managers”. Which one would you perform best for?

Trust between two people can be hard won and even more easily lost. By sincerely committing to these five suggestions, odds are the trust scoreboard will be tipped in your favor, leading to a higher degree of achievement and satisfaction for you and your team.
To your success!

Facing a tough coaching issue in your workplace? E-mail your question to: jworden@stmeyerandhubbard.com and we’ll answer it in a future issue of Conversation Signposts. Your name and organization will be kept confidential.