Remus Brett reports on the results of a survey into sales productivity among European banks and gives advice on staying ahead of the pack.
The gulf in sales productivity between Europe’s high and low performing banks represents a major opportunity for potential acquirers. To compare their sales competitiveness, CEOs must look beyond their domestic peers. Adopting the six characteristics of Europe’s productivity leaders will help them reach best practice.
In 2005, Finalta undertook a pan-European benchmarking and best practice study of sales productivity in retail banking. We gathered the metrics and practices of 22 leading banks and found enormous variation in sales productivity in the branch network (see figure below).
Measured in sales per branch adviser per week, the gap between upper and lower quartile performers is 73%. In absolute terms, the highest performer sells 10.1 more products per adviser each week than the lowest performer. Neither size of bank nor nationality is an influencing factor; the top three ranking banks all operate in different countries.
This productivity gap represents a major opportunity for the highest performers. Productivity leaders are seeking to acquire Europe’s laggards and, by applying superior processes, practices and culture, are aiming to manage sales performance upwards to create value above the cost of acquisition.
The key question we set out to explore is how can apparently similar banks outperform their peers by such a margin?
The six characteristics of leaders
Finalta created a capability model to analyse 16 primary drivers of branch productivity. We found the highest performers share six characteristics:
- Advisers demonstrate high activity levels. Highly productive banks ensure that their mass market advisers perform more than 20 customer meetings per week. Relationship managers should average 18-20 meetings. Even at these high activity levels, meeting conversion and cross-sell rates are upper quartile when compared to domestic peers.
- Branch managers coach, lead and motivate. Limited direct sales responsibilities enable branch managers (BMs) to focus on staff development, business planning and team leadership. Fixed and variable pay is commensurate with branch size and growth potential.
- Sales pipelines and resources are balanced. To meet their sales targets, best practice banks understand the volume of prospects, leads and meetings required per adviser and the resources needed to generate them. Regular capacity modelling allows management to ‘tune’ pipelines to maximise sales per branch.
- Sophisticated management information supports management decisions. Management rely on detailed measurement systems to combine input (for example, leads actioned) and output (for example, sales per adviser) metrics. This is used by BMs to challenge advisers in sales meetings and by executive management to pinpoint underperformance, set targets and allocate sales resource.
- Productivity tools boost adviser performance. Integrated appointment booking systems enable all tellers and contact centre staff to book adviser meetings. Customer relationship management (CRM) data quality is high and advisers use 50% or more of CRM-generated sales prompts.
- Reward models create a performance culture. Best practice banks have replaced sales volume targets with value and service measures. To ensure high sales quality, bad behaviours (for example, product churning) are identified and advisers are penalised accordingly. Bonuses are skewed to reward high performers and individual targets are balanced against team goals.
While the European differential in sales productivity exists, productivity leaders will continue to seek out low performing prey. To prosper in this consolidating market, executive management must first understand how sales productivity in their branch network compares to European peers. Depending on the outcome, they must decide on one of three courses of action. Productivity leaders looking to acquire should identify which targets offer the greatest upside for sales improvement. Average performers must prioritise the actions that deliver the quickest improvements. And for productivity laggards, transformation may be necessary to avoid acquisition.
Remus Brett is director of Finalta, an independent UK advisory company that specialises in providing benchmarking and best practice services to financial institutions.
