Triumph of the salesman

“Of course sales-driven retail banking is an abomination”, said the obviously frustrated retail banking executive. “I hate it, but I need the job. I learnt how to put up with things I do not like doing when I was in the military”, he added despairingly.

The thought of a well-paid senior retail banker who goes to work every day to manage a team of sales staff who have no real interest in their clients’ needs is depressing, to say the least. The staff he is talking about have backgrounds in furniture stores, car showrooms, in fact anywhere but banking – and they could not care less whether the products they push onto unsuspecting clients are good or bad for them. “Eventually people wake up, but the salesman has usually moved on”, he adds

This Asian banker is passionate about his profession and gets great satisfaction from teaching students about how retail banking should function when it is done properly.  “They identify with what I teach them, and then ask why retail banking is so different in practice”, he continues.

Our conversation turns to the country’s banks and their top management teams. It’s the same old story – investment banking and a deal-making culture pervades every bank and the regulators are totally oblivious to what this means for consumers.

The heart of product development

There was a time (not so long ago) when a new product introduced by one bank would stand out for quite a while with other banks ‘playing catch up’ to introduce their own, improved version. In those days, we talked about product life-cycles.

Unfortunately such times are now but a memory, particularly with the influence of the internet. Now it is a matter of days – or at most weeks – before the competition produces a ‘new and improved’ version of your offering. (In the fashion industry, the timescale is minutes and hours.)

Technology and social media have made the jobs of Product Development departments increasingly difficult, especially the task of differentiating products, achieved largely through features and bundles. In the past an international bank would have a pipeline of new features and ideas for the same product in different parts of the world, but that information advantage hardly exists anymore, thanks to the internet.  And so, to extend the shelf life of the product, ever more money is being spent on advertising or promotion – all to shout louder in effect. Truth be told, there is hardly any difference between most products banks offer – we keep introducing/tweaking features and offering various bundle permutations to keep the product innovation story going.

Nonetheless, the opportunity arises to create a distinctive (rather than differentiated) product experience, where you are not ‘competing’ on product features or price, but on creating a distinctive product experience. Adding features to a product is usually the job of the Product Development silo. Similarly, the people charged with selling the product sit in another silo called Sales, and the “new” product is passed to Sales for them to sell.

The implication of the this opportunity (creating a distinctive product experience) is that you need to break down the silos, not just on the organisation chart but also in people’s heads and attitudes. Indeed, a ‘customer experience focus’ has to be brought to bear on the entire product value chain. How do we help the salesperson inject more emotion and passion when explaining the product? How does this solve the customer need? How do we simplify the sales process so that it becomes more responsive? How do we internalize the storytelling? And how do we move the customer – who is currently at the end of the product creation process – to become involved in the product development phase? How, in short, do we get the customer to co-create the product that he will be using or buying from us?

Every sale involves the head and heart: the ‘head stuff’ might include product features or price while the ‘heart stuff’ relates to the emotional connection offered by the product, a connection that is much harder to create for certain product categories than others. The best sales are the ones where the customer buys with his heart and then justifies with his head.

That quality is harder for the competition to replicate. So, if we are thinking about how to improve profits and margins, we must think about how to reconceive the treatment of customers: what are we getting them to focus on? How do we move the engagement from a price-and-feature sale to an emotional sale? In short, we should stop selling…and get the customer to buy.