"Not everything that counts can be counted and not everything that can be counted counts."
~Sign in Albert Einstein’s Princeton Office
It seems like we’re counting more than ever before—and the numbers are more immediate than at any time in our history. Turn on CNBC and learn instantly how badly your stocks are performing. Not only can you get the score of every game played, the Internet tells you how many strikes there are on the batter. The Weather Channel tells you the temperature in your hometown—on the 8s. We’ve come a long way in what we tally, but in financial services we’re still taking the same type of approach to counting our beans as we did 50 years ago. For many organizations the only difference to come about in that time is using a computer instead of ledger cards.
We don’t often have a themed edition of Conversation Signposts, but we received so much feedback from April’s Horizontal Rant about what banks should be measuring and how to connect everything to the sales process, that we felt it was a good time going into the summer months to review where we are with pipeline measurement, Onboarding, and Training ROI.
By Jack Hubbard,
Chief Experience Rantor
As part of our coaching practice, we have the great privilege of observing lots of team/pipeline meetings. Prior to these events we typically get copies of pipeline reports (we’ll look at the pipeline meeting itself in June). Regardless of the size of the organization we tend to find the following:
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Pipeline reports tend to be focused on loans only
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Lots of very old opportunities stay on for far too long
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Conversations about deposits are getting better, but little, if anything, is put on the pipe line about them
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Many times referrals and fee income are on separate reports and not integrated into the pipeline
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Bankers are still using paper, Excel, and other means to report pipeline numbers because they “don’t trust the system”
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Managers are allowing bankers to opt out of using the technology that feeds the pipeline report because “it takes too long” (hear the whine?), “it isn’t accurate” (more whine please), and “__________” (you fill in the blank)
Very few are connecting the pipeline to the sales process, even fewer have the energy to learn how many days an opportunity has been in the sales funnel, and I only know of one or two that move each opportunity from one step of the sales process to another and track the number of days the opportunity is in that step
Some would suggest we have made great progress with pipeline reporting. Show me where. We continue to report numbers without making connections to how the numbers got there. It’s not just the pipeline that is problematic.
What we count in general continues to be an issue. Respondents to our Business Banking Study last year suggested they measure the number of calls made at nearly a 70% level. Only 6% tracked the face-to-face appointment hit/conversion rate from telephone calls made by business bankers. I could go on.
Instead how about some questions to ponder?
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What are the beans you are counting now? Are they the right beans to count? How do they integrate into your corporate vision and overall revenue objectives?
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Does your system allow you to measure the complete “math of selling” in business banking? That is: the ratio of the number of letters sent to the number of phone connects, the ratio of phone connects to appointments, the ratio of initial appointments to second
appointments (one client measured only a 23% second call hit rate before we helped them modify the approach through a more trust-based discovery process), the ratio of discovery calls to presentation calls, and the ratio of presentation calls to closed business. -
Do we measure business won and why? Lost and why?
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Are any of the above talked about in meetings, one-on-ones, and coaching? How are those activities translated into practical behaviors that the banker can execute?
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How does the CRM or SFA system enable this more sophisticated level of measurement?
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Is executive management committed to this approach or is it simply concerned about how many widgets were sold last month?
In my old radio days back in the 70s, we used to talk about “stacks of wax” and “mounds of sounds.” Today in our business banking world, help me understand why the stacks of reports and the mounds of measurement we’re looking at aren’t much different than they were three decades ago.
Think FAST: The One Word Measurement Approach
By Jack Hubbard,
Chief Experience Officer
A couple of weeks ago I was with a bank CEO and his colleagues in a large sales presentainment (presentations are dull—I like presentainments better). It’s a great organization and one that is seriously considering partnering with us along its performance pathway— its journey toward sales conversation supremacy. At lunch the bank president said, “You’ve obviously done this a few times and you’ve worked with banks of all sizes. If you could give me one word that would describe what we need to do to make our bankers in retail, wealth, business banking, and mortgage more successful what would that word be?” Those readers that know me are well aware I was not answering the question without a question. So I said, “Tell me more about what you are looking for.” Once I better understood the context and the reason for the question, I simply said: “FAST.” “I like fast,” he suggested. “It signifies movement toward a goal, a sense of urgency, and working hard for the client. Why fast, though?” he inquired. “FAST stands for Focused Actions Sustain Traction,” I replied. He liked that even better—even though I went beyond his one word.
It’s pretty tough to measure passion, motivation, and even energy (some people keep that bottled up), but it can be pretty easy to measure FAST. Want more deposits? Focus on the industries that have them. Execute actions to find them, touch them, converse with them, and earn/keep/deepen the business. Sustain the process by making industry targeting a workstyle change not a campaign and the bank will see traction over the long haul.
Thanks for the great idea for a measurement article, Mr. President.
Stop Onboarding! (You Are Making Things Worse)
By Ron Buck, President,
SM&H Consulting
The average 90-day retention rate for new retail deposit accounts in 1999 was 87.9% and it is about 86.8% today. Despite all the bragging, chest thumping, and proud exclamations of excellence, things have gotten worse!
On the business banking side, it’s no better. In our recent Business Banking Study more than 53% of financial services firms indicated they had no Onboarding program at all for new clients and/or did not plan to start one. So much for a honeymoon period for new clients…
I recently attended a sales conference where I heard another speech about retail Onboarding. My ears perked up when two sales executives seated nearby spoke about their Onboarding strategies. I have heard the same conversation hundreds of times in the last decade.
“We have a great 2-2-2-6 onboarding strategy.”
“Us too.”
Whatever!!!
During the first part of this decade, sales executives lined up like lemmings to initiate Onboarding systems. It was all the rage. Consultants made speeches and lead workshops and sold Onboarding like snake oil. Bankers bragged about the “secret sauce” like it was a Big Mac. Interestingly, I have never had one of them give me a good reason why Onboarding was necessary other than: “We want to welcome our new customers, thank them for the business, and make sure they are happy with the new products or services.” When I explain to them that one out of every eight new accounts goes away in the first 90 days, they are shocked!
Okay, I agree, Onboarding is a very important sales strategy and some of our SM&H clients are doing it really well, start-to-finish. That means thoughtful creation of the Onboarding system, utilizing technology to measure and calendar the process, training associates what to do and say when the concept is introduced, training on how to make the initial phone call and leave a voicemail, and how sales managers are taught to observe and coach ongoing improvement. There is a big gap though, between the vision in the executive suite, the strategy in the field, and an organization’s discipline to execute over the long haul.
For the past six years we have been measuring the results of Onboarding at 300 financial institutions (and thousands of branches). We have tracked the process for millions of customers and the related business impact. Are you ready for this? Onboarding has provided no positive business impact! In fact, the 90-day retention rate has slipped by almost 20%!
Huh??? What happened?
Our research reveals that Onboarding strategies have been derailed by poor execution and have inadvertently destroyed trust with millions of customers. Inept implementation has actually turned a poor initial experience into a terrible one for 14% of all new customers.
Onboarding is an important sales strategy and a great opportunity to have a transparent customer conversation while also building trust. It is supposed to be a strategy built on transparency and collaboration which builds credibility and demonstrates reliability—the fundamentals of trust. Sounds like a winning strategy…so, what’s the problem?
We know that when it comes to new retail deposit accounts, 14% go away in the first 90 days. This is one reason it seems so difficult to grow deposits. There are three basic reasons for early departure:
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Reason one is related to fulfillment issues: the new checks didn’t arrive or they came with the wrong address, the PIN doesn’t work with the debit card, etc.
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Another issue is surprises: usually related to fees, minimum balances and rates. These are usually caused by the customer’s new account opening task tension but, nevertheless, they are significant and they tend to drive the customer away.
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Third relates to purchasing the wrong product. This is many times the result of the banker’s inability to correctly assess the customer’s real needs. This also can happen when a campaign and its related incentives push the banker to put the customer into something that is good for the banker, but not as good for the customer.
What a great opportunity for this new accounts professional to step in and easily fix some easy-to-solve problems; an opportunity to lay the groundwork to become the customer’s trusted advisor. But during the past decade, it has been opportunity lost.
Effective Onboarding begins with the last step of the new account opening process. This is an ideal time for the banker to be totally transparent and say something like, “I would like to give you a call in two weeks. Would that be okay with you? Two weeks should be enough time for you to receive your new checks and debit card. I want to make sure everything has arrived correctly and there are no surprises when you attempt to access your money. Would it be okay if I called you during the day on your cell phone?” Remember the consultant that sold the snake oil? He never told senior management anything about this. All he did was sell some direct mail letters and some tired phone call scripts.
Things get worse!
The Onboarding strategy breaks down in the first two weeks when the banker attempts to call the customer, only reaches 4.7% of them, and then gives up in frustration. The lack of call preparation, calling skills, and accountability completely derails the strategy. The customer who was promised a call assumes the bank is not reliable. There’s a great experience!
Things get even worse!
When the few (4.7%) customers actually are reached, many times the banker is unprepared, unable, or unwilling to help the customer re-order checks or fix the PIN. A great opportunity to build trust with the customer results in a lost customer when the banker’s creditability is totally destroyed! Also lost is an opportunity to:
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Finish strong and improve the experience
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Continue the conversation with cross-solving as a goal
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Support the customer’s decision to buy
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Gain new insights for the long-term
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Uncover personal information that can be used later
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Become the customer’s trusted advisor
Stop this madness!
Stop Onboarding your new customers until your organization creates the discipline of Onboarding execution.
To learn how best-of-breed organizations execute an Onboarding strategy, watch for my article in next month’s newsletter. For more immediate help about the Discipline of Sales Execution, visit our new website and download our White Paper at www.thedisciplineofexecution.com.
By Mike Dillon, President,
SM&H Workshop Group
“Our training budget has been slashed to the bone.”
“We have a training budget, but no one can travel.”
“Next year will be a better time as we come out of this mess.”
Have you said these things to training companies that call you? While our company is as busy as it has ever been in its history (thank goodness), we’re hearing it too. Times are tough and what’s among the first things to be cut from a bank’s budget? Training. Ironic, isn’t it? At a time when it’s most critical (and perhaps the most opportune) to retain the best employees so they can have sales and sales management conversations at the highest level, we decide to cease investing in the things that drive the performance of our human capital. One challenge is that many organizations don’t have a clear model that shows the return on every dollar invested in training—the “training ROI,” if you will.
ASTD (American Society for Training and Development) has spent a lot of time and energy attempting to quantify the return on training investment and there are dozens of books and research documents available that describe various formulas for calculating ROI. All research seems to confirm what we already know: training has a positive impact on the business, the employees, and the customers.
The primary metric management tends to see most clearly and understand the best is revenue growth. Data shows that you get on average $30 back in increased revenue for every dollar invested in training. Deliver the right training…to the right people…in the right way…and support it by coaching and you will see those numbers rise exponentially. There are huge benefits beyond revenue growth. Intangible, but equally important things like:
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Improved morale and job satisfaction
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Increased loyalty and reduced turnover (retention in and of itself is a huge cost-saver)
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More effective teamwork, increased work quality, and increased productivity
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Client satisfaction resulting in deeper partnerships and increased retention
To make training sticky and effective takes careful planning, world-class execution, and ongoing coaching that supports the initiative.
Planning Includes:
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Linking the training to a specific business need and certainly to the overall strategy
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Determining specific objectives and performance metrics that are defined down to the behavioral level
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Measuring what really counts (see Jack’s rant)
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Communicating outcome results expectations and accountabilities up front
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Establishing clear and trackable measurement metrics and goals
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Preparing the environment (both sales and management) for the expected changes in behavior
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Customizing the initiative to your organization and our industry (isn’t it interesting that bankers spend thousands on classes and public workshops that teach them how to sell trucks and copiers?)
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Establishing a coaching process linked directly to the training initiative
World-Class Execution Means…
Training delivered by someone that can facilitate. Just because someone is good at sales does not in any way mean they can be a sales trainer. Ensuring that you are delivering “the right training” to “the right people” for “the right reasons” greatly increases the impact training will have on the bottom line. In the 1950s Donald Kirkpatrick developed a very popular model designed to help companies gauge a training initiative’s effectiveness. The Kirkpatrick Scale focuses on measuring four key outcomes that should occur when a highly effective training program is put into place.
Level 1: Reaction
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What was the participant’s reaction to the training—both positive and negative elements?
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Did the participant like or dislike it? Did the participant find it valuable, specific, relevant, and in the context of the company’s objectives?
Level 2: Learning
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Did the participant “get it?” Was the participant able to understand the training?
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Was the participant able to pass a competency test to prove acquisition, retention, and processing of the information delivered in the session after a certain period of time?
Level 3: Behavior
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Does what the participant learned translate into the ability for each to change what is done on the job—to execute something different in an attempt to enhance performance?
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Can the participant actively apply the new skills and behaviors in the context of a conversation with a customer or prospect?
Level 4: Results
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Does the change in behavior actually translate into any change in bottomline sales and revenue improvement?
Ongoing Coaching:
Finally, and most important to bringing power to a training initiative, is the coaching element that takes place after the training. Data indicates that 92% of the $4billion spent on sales training in 2008 went to waste. Why? No follow-up after the training. The key here is that sales managers have to incorporate the new skills and behaviors into team meetings, one-on-one conversations, observations, joint calls, and any other communication touch-points they have established for their teams. Holding associates accountable for interweaving the newly learned behaviors into their conversations ensures sustainable integration of the skills into their sales DNA.
It’s very simple—train and don’t coach it afterwards and your performance remains the same. Coach specifically and in a targeted, focused way and your ROI on training dollars are maximized. With an average ROI of 30 to 1, and all the other benefits you get from keeping your team at peak performance, the question “to train or not to train” becomes a no-brainer.
Editor’s Note:
Mike Dillon is President of the newly formed SM&H Workshop Group. The Workshop Group offers foundational and advanced workshops in retail and business banking such as TAPS, our highly effective and systematic prospecting system. For more help with your training ROI, reach out to Mike Dillon at 815.725.9588 or mdillon@stmeyerandhubbard.com.
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