I have never found a specific industry so averse to selling,” says Kurt MacAlpine. The setting is a sunny conference room, 21 floors above Park Avenue in McKinsey & Company’s burnished Manhattan offices. MacAlpine, a McKinsey consultant, raises his voice slightly in front of 15 nodding credit union executives. They agree with him, and they want to know how to change.
“You’re not selling tobacco,” MacAlpine continues. “You’re selling financial solutions for people and making their financial lives better. Don’t shy away from sales.”
Both by habit and, more vexingly, by inclination, many credit union staffers are uncomfortable selling the very products they are paid to deliver. Sales initiatives meet rolling eyes. Tellers yearn for the end of the promotional push when they can revert to simple transacting.
Here’s how credit union leaders can do more than merely sprinkle sales priorities on top of front-line staff and instead inject sales motivation into the workforce.
Dispelling Myths
One prevalent barrier to building a front-line sales culture is staff fears that selling will detract from member service and member relationships. Yet, McKinsey analysis of thousands of consumers’ satisfaction with financial services firms shows that selling does not materially affect customers’ perceptions of their institutions—bank or credit union. “People actually appreciated what was perceived as aggressive selling,” he says.
Customers are, of course, welcome to decline products, says Dorian Stone, a Filene Research Institute fellow and partner at McKinsey. But when consumers accept the offered product, their satisfaction actually improves because the firm offered a product the consumer didn’t know he or she needed.
Credit union “sales” don’t have to—in fact shouldn’t—be the kind of high-pressure interaction that easily comes to mind. These are not used cars or door-to-door magazines. In addition to matching the correct employees to sales roles, credit unions should emphasize advisory conversations over transactional conversations.
“Customers are not looking for product advice. In fact, customers are very wary of product advice, because that feels like a sale,” says Joshua Kanter, a McKinsey consultant. “What customers are looking for is financial advice and counseling and someone that they can trust.”
That perspective is bolstered by an anecdote from one CEO at a Filene/McKinsey roundtable in Los Angeles: “I actually had a [member service representative] who came, sat in my office, cried, and said, ‘Take away $2 an hour just so I don’t have to sell. I don’t want to sell. I can’t sell,’” the CEO recounts. “She absolutely is our top producer, and we talked about, ‘What is your definition of selling? I’m not asking you to sell a car; I’m asking you to prevent this person from going to Wells [Fargo] and getting charged 29 percent on their credit card.’ And immediately it clicked.”
The takeaway: If you hire people who like to be liked, you can’t call it selling, because they don’t like that word. Instead emphasize a consultative approach that offers products that fulfill member needs or offer a better deal.
Focusing on Talent
Another way to encourage a mindset shift on the front line, MacAlpine argues, is to move customer satisfaction down to a secondary metric for front-line employees. Instead prioritize metrics like cross-sells or increased balances. High customer satisfaction will usually get customers to the consideration stage, but sales-oriented staff matched with sales targets bring them through to purchase. “To the extent that you can get customer experience to bring them in the door, to help set them up for a better financial future, don’t shy away from the sales,” MacAlpine says.
But front-line employees aren’t the only important contact. “What we find across financial institutions is the branch manager is the single biggest leverage point for performance,” says Stone. “This doesn’t necessarily mean that to make sure our branch manager is doing well, let’s go give them all raises. What it does mean is let’s work really hard to find that good branch manager. They’re the biggest swing vote in terms of sales performance.”
One downside of credit unions’ historical focus on service over sales is that a service-at-all-costs approach limits the possibility of hiring top sales talent, Stone says. “We did a major piece of work on recruiting talent for a mutual insurance company. In the spirit of trying to be fair and give people one more chance, they were holding onto [poor] performers, and the highest performers in the company—and the ones that they were trying to attract from outside the company—they just didn’t have respect for the system,” he adds.
The takeaway: Credit unions, with a well-deserved legacy of employee loyalty, run the risk of retaining mainly the comfortable employees, the ones who don’t like to be pushed and whose performance shows it.
Motivating the Front Line
McKinsey analysis of front-line-employee motivation shows that staff are surprisingly more interested in the intangible factors of their job over raw compensation. Employee satisfaction is most heavily weighted by how interesting the job is (22 percent), the example of and relationship with managers (15 percent), and the quality of the physical environment (13 percent). Compensation, at 10 percent, is the fourth most important component of employee satisfaction—not negligible, but certainly not dominant. In other words, the hard work of making a front-line job interesting pays off in the retention of key employees.
One reason for high turnover may be that fully 40 percent of employees in the overall workforce are temperamentally ill-matched for serving customers. The numbers are even worse at banks, where up to 62 percent of hires are placed in jobs for which they’re ill-suited. These are workers who are motivated mainly by either stability or a paycheck. They may be valuable in back-office roles, but they generally detract from the quality of customer experience.
Three Segments
The well-matched 60 percent comprise three distinct segments, each of which has strengths to offer a customer-focused financial institution. These three segments are those with a leader mindset (25 percent of the workforce), enthusiasts (9 percent), and those who are primarily customer-oriented (25 percent), according to a recent McKinsey workforce survey.
Leader mindset: These employees are interested in career prospects, in taking on a variety of roles, and in leading (or eventually leading) others. In customer-facing environments, leader mindset employees are best positioned as branch managers.
Enthusiasts: These employees are motivated by compensation and goals and want to have good IT and institutional support. They are best positioned as mid-level specialists, e.g., financial advisors, loan officers and account specialists.
Customer-oriented: These employees thrive on positive interaction with customers. They want a positive work environment and professional development. Like enthusiasts, they are motivated by compensation, but are better team players. Customer-oriented employees work well in teller and call center roles.
Finding and hiring these individuals will almost certainly take more time, because they are probably happily employed elsewhere. But holding out for them, even if it means leaving positions unfilled longer, still makes sense. McKinsey estimates that replacing a quickly hired, but poorly performing, employee can result in up to $49,000 in indirect costs like lost productivity and poor service. Imagine the change in mindset that comes with treating the loss of an employee as a $50,000 problem rather than a periodic HR nuisance.
The takeaway: Sales initiatives tend to fail when the wrong people are manning the stations. Get enthusiasts, leaders and member oriented advisors onto the front lines.
A sales culture doesn’t spring up overnight. But neither is it out of reach for a credit union of any size. Start by dispelling the myths, forcefully and consistently, that sales is a pushy process that will alienate members. As employees begin to see that sales flow naturally from natural conversations about members’ needs, the process will be smoother.
Focus throughout on talent. Employees are the lifeblood of the credit union: Attracting the right ones and giving them room to excel will absolutely differentiate your credit union. Make sure each front-line employee has a clear reason to pursue sales goals. For some it will be pride of success (or embarrassment for the lack of it). Others will respond to monetary incentives, and still more to emotional support from their leaders.
Don’t be averse to selling. The marketplace is full of products, and most consumers feeltheir financial needs are already met. Telling them otherwise, in tactful and tangible ways, is the only way you will grow.
Mark Meyer is CEO of Filene Research Institute, Madison, Wis.
