Aligning effort to reward: The journey to boosting sales effectiveness for banks

Many banks entered the COVID-19 economy lacking a unified, strategic sales culture. Sales cultures across commercial banking are typically dotted with ever-changing direction from leadership, a product-of-the-month mentality, and tasking single relationship managers (RMs) to represent and sell a range of products and services. As bankers attempt to sell the entire bank, they typically spread sales activities thinly and inconsistently across all product goal categories. Complicating matters, most sales processes are not implemented on an enterprise-wide scale, leaving accountability and goals inconsistent across regions. As a result, RMs lack focus and commitment-to-win specific sales opportunities, all of which contribute to underperforming sales teams. 

An effective sales methodology increases sales effectiveness by reducing sales cycle times, increasing close rates, and improving the aggregate number of wins. When executed, we have seen share prices rise along with revenue and profit. In one case, we saw sales effectiveness increase revenue by 30-40% above average growth rates and net new client onboarding increase by 25%.  Most important, when done correctly, sales effectiveness allows bankers to build relationships that are trust-based and value-added, with these types of relationships often becoming customers for life.

Building a consistent sales methodology is critical to accelerating meaningful portfolio growth. For commercial banking teams, three components must be included:

Sales effectiveness requires deeper penetration of existing relationships

A sound sales effectiveness strategy will, at its core, align effort with reward. While seemingly straightforward, we often observe banks struggling with sales planning activities because they lack enterprise-wide, formalized account planning tools and processes, including means for capturing opportunities as well as planning the sales process activities over the next 12 months. In addition, they often do not devote enough attention to the process of identifying cross-sell, short- and medium-term opportunities for their existing clients, often because they fail to recognize the importance of identifying and prioritizing sales pipeline opportunities.

RMs typically focus on immediate closing sales, and in doing so completely lose sight of business development activity that leads to future sales opportunities. Without a longer-term view of a client’s needs, bank RMs spend endless hours conducting sales calls focused on short-term wins, often with companies that yield low returns. To avoid this issue, it becomes important for banks to help the probability aspect by having appropriate RM sales coaching delivered weekly from experienced sales leaders. To resolve the issue of sales with low returns of profitability, it is incumbent upon the bank to provide a product or relationship profitability tool to RMs so they understand the importance of spending time on relationships that matter most. The first step in creating deeper relationships with current clients is to align RM incentives with expanded solution-based sales that address client needs.  

Existing clients have purchasing history and a track record with the bank, credit adjudicators, portfolio managers, and servicing teams. Most RMs will intimately know their clients and deliver critical insight which can convert into sales opportunities. However, each client has unique needs and purchasing capacity.  In addition, most commercial clients only purchase commercial banking products once, making it essential to identify cross-sell opportunities that incorporate additional product solutions to deepen relationships. Having a well-adopted customer relationship management (CRM) platform is essential in identifying cross-sell opportunities and next-best product offerings earlier in the relationship lifecycle. Using client data to identify behaviors allows RMs to predict the next best offering, and the CRM can then be used to operationalize sales. 

To effectively address the need for cross sales, banks must put in place a process to segment their portfolio through the lenses of untapped opportunities at each client within key segments. For example, a large client that has already purchased nearly every product and service sold by the bank is quite valuable but may lack future sales opportunity, whereas a newly onboarded client is ripe for sales activity and cross sales.

It becomes critical to understand which clients have additional needs coming in the next 12 months. By understanding client needs, RMs have the power to align effort with potential reward through deliberate, strategic sales activity. Once RMs know where to invest client-facing time, it’s critical to pave the path forward with a road map of known or speculated opportunities to ensure commitment, accountability, and success. This road map is created through a collaborative account planning process with a cross-functional team and product partners. Through multiple strategic sessions, sales opportunities can be identified, prioritized, and supported by a series of sales tasks and activities that proactively accelerate the sales process and reduce cycle times. This type of pragmatic sales plan equips RMs to leverage the right solutions at the right time to help clients. 

Banks must consider how they are equipping their RMs by asking the following:

• Does the bank provide the RM with a tool that calculates profitability at a product and relationship level to ensure appropriate short- and long-term strategic decisions, as well as provide guidance in terms of how to allocate their selling time?
• Have the RMs been effectively trained on and provided with marketing collateral necessary to educate clients regarding the bank’s solutions?
• What type of ongoing training and templates have been provided to help RMs conduct needs-based conversations aimed at solving clients problems through a structured, layered, and inquisitive approach?

Effective sales tools combine the need for RMs and team leads to build detailed relationship plans with concrete steps on executing them. Team leads will be able to manage their RMs’ sales activities and results with thorough intelligence, reporting, or ticklers to promote proactive action. The most successful RMs proactively leverage these types of sales planning tools to highlight key opportunities, upcoming sales activities, expert internal product partners, and necessary planning detail required to win the sale.

Banks should be looking to implement sales planning tools as part of their overall CRM platform, as these activities naturally bridge into product pipelines and client relationship data. As RMs begin to use these tools, the bank will acquire more data about their clients and which sales strategies are most beneficial to overall revenue growth.

Improve targeted pursuit of strategic prospects

In an ideal world, we could sell to existing clients endlessly, continuously expand commercial portfolios, and achieve financial goals. Unfortunately, because of client’s ultimate limited purchasing capacity, RMs must focus on net new client acquisition each year to help drive growth. One recurring challenge is the issue that RMs unproductively call on new prospects with ineffective, inconsistent sales planning and processes. For example, RMs habitually call repeatedly on friendly prospects that accept the RM’s meeting request, even though there are no known sales opportunities now or in the next 12 months. In addition, RMs often call on prospects simply because they are located within the sales territory without conducting proper due diligence to pre-qualify the prospect.  

Banks must develop a pragmatic approach to new client acquisition inclusive of identification, assessment, curation, and prioritization of prospects based upon an agreed series of parameters and filters. Bank senior leaders and RMs must be equally committed to first investing time to pursue and focus efforts on high-opportunity prospects. RMs should have early indicators that the prospect’s needs match with bank solutions in lending, treasury management, or other product areas. Finally, RMs should understand the prospect’s actual position in the sales purchasing cycle to ensure ultimate sales effectiveness. This approach to prospecting is aimed at defining a manageable number of key prospects and carefully planning for and executing high quality interactions that are needs-based and focused on the client’s business situation.

Sales accountability (driven by leadership with tools and transparency) 

Even with deliberate, initial RM focus on high-opportunity clients and prospects, banks still experience underwhelming portfolio growth because most RMs waiver on commitment to ongoing sales pursuits. RMs also lack the tools necessary to monitor and manage sales opportunities throughout the typical 6- to 12-month commercial banking sales cycle. Teams struggle to manage sales activity because they lack the right tools with transparency for the RM, product partner, and sales leaders.  As such, RMs often find themselves with misalignment between effort, reward, and results.  

Banks must align sales leadership and RM accountability via sales tools that offer transparency across all stakeholder groups. By leveraging an enterprise-wide CRM tool, transparency for quality and quantity of sales activity exists to all stakeholder groups. Leveraging the CRM tool, particularly reporting at the individual RM level, will serve as the basis for coaching and driving accountability. Further, we believe both sales leaders and RMs should proactively own accountability for sales activities (e.g., client needs assessments, pre-call planning, post-call debriefs, etc.).

To do this, sales leaders must manage and deliver effective sales coaching through regular check-ins supported by clear, user-friendly call report tools that contain ample detail. Having detailed action plans and call cadences in your CRM ensures accountability at the RM level, providing a metric against revenue growth long term.

Both RMs and sales leaders must actively participate in pipeline management and data driven analyses leveraging the reporting and dashboard functionality on a consistent weekly basis to identify performance gaps and remediate with revised, targeted sales activities. Last, through consistent sales leader messaging at recurring sales-focused meetings and by leveraging tools that highlight wins and upcoming successes, stakeholders can motivate, lead, and drive sales effectiveness. 

Ultimately, aligning effort to reward within an end-to-end sales methodology leads to accelerated portfolio growth. The journey begins with an initial focus on expanding existing high-opportunity relationships by leveraging cross-sell opportunities and is governed by a documented, detailed sales plan. Immediately thereafter, RMs must target net new business development efforts on a distinct quantity of high-quality prospects that are continuously curated. Finally, stakeholders must leverage an impactful holistic sales methodology built upon transparency and accountability to drive consistency and accelerated sales effectiveness.

Together, these components empower RMs and sales leaders to focus and diligently pursue high opportunity sales that align both effort and reward.