There’s been a lot scrutiny of the sales practices of financial institutions in New Zealand in recent months. The Sedgwick Report and the Royal Commission (into misconduct in banking) in Australia has cast a long shadow into New Zealand, with most of our biggest financial institutions being Australian owned. The Reserve Bank (RBNZ) and The Financial Markets Authority (FMA) are responding with their own review of the financial services culture and conduct in New Zealand.
Currently, a thematic review is being conducted by the FMA on bank sales incentive structures, which is due to be reported on by the end of the year. This has prompted many financial services institutions to proactively change the way they sell and incentive their front-line sales people. ANZ, our largest bank has already announced that their front-line people will no longer have individual sales targets.
Changes in company policy, sales frameworks, incentives and rhetoric will not be enough if there is no real intent.
Transformational change to a culture that has been embedded over decades will require significant effort and investment. Changes in company policy, sales frameworks, incentives and rhetoric won’t be enough if there is no real intent. Lets face it, the old practices have been very successful in contributing to strong growth and profitability, especially in the banking sector, for a very long time – so I imagine there will be an unwavering expectation from the executive suites that any change must deliver the same, or better business outcomes.
During my career I’ve worked for organisations that have subscribed to individual sales targets and one where there were no individual sales targets. In my opinion, when approached with the right intent and attitude, having no individual sales targets and sales incentives is the best option, here’s why:
- Customers are more likely to have their genuine needs met, as front-line people aren’t encouraged or incentivised to product push. Isn’t this what great service is all about?
- Helping customers brings genuine happiness to front-line people, which gives them a real sense of purpose.
- Great team spirit is built, where team comes before self and everyone’s contribution is valued. People thrive when they feel a strong sense of belonging.
- A positive culture of trust and mutual benefit is created, rather than one of fear and greed.
- People are coached and supported to learn and master the right behaviours. If you get the behaviours right the numbers will take care of themselves.
- People act with integrity, rather than trying to game the system or acting dishonestly due to the pressure of meeting sales targets.
- Workplace stress, sick leave and absenteeism are all reduced.
- Employees and customers become raving advocates for the organisation.
- The business outcomes are fair and sustainable.
Make no mistake I’m not suggesting in any way a regression back to the days of front-line people being order-takers, as this doesn’t provide customers with good service experiences either. However, what I am suggesting is a revolution, not an evolution – this is more than just making a couple of minor tweaks.
If an organisation is serious about making change in this area it should conduct a deep dive on all sales related practices (including the digital sales channel), make well thought out decisions about the changes that need to be made and implement and embed well with good change management disciplines.
For more information contact: firstname.lastname@example.org