Magazine article The Journal of Lending & Credit Risk Management

The New Sales Discipline

Magazine article The Journal of Lending & Credit Risk Management

The New Sales Discipline

Article excerpt

This article provides a short overview of the steps needed to bring a sales force in alignment with today's marketplace.

A regional bank recently acquired a handful of smaller community banks. Management knew that adoption of a sales discipline would be critical, especially because of the way it intended to operate the community banks. And it was essential that sales discipline be built into the merger process.

All of the banks involved had prestigious histories and solid reputations in the investment community. All had loyal customers and respectable, if not outstanding, balance sheets.

The planned acquisition was a key component of the larger bank's long-term marketing strategy to expand into the affluent residential areas serviced by the community banks without the capital expense of constructing new facilities. Furthermore, the larger bank wanted to capitalize on the longstanding reputations the community banks enjoyed with their respective customer bases.

The plan called for retention of the community banks' names as well as product offerings and services. In fact, by design, the only difference customers would notice was a reference to the acquiring bank's name in all marketing materials from the community banks.

The autonomy of the community banks was a priority and was even promoted as a perceived value under the plan, to assure customers that nothing would be lost in the acquisition and that the individual identities of each of these banks, a critical part of their appeal, would be retained. Indeed, stability was a key message the larger bank conveyed to all customers. The larger entity of the combined banks would offer them greater stability and security for their accounts and transactions than ever before.

Perhaps most critically, this autonomy extended to the banks' sales forces. Management remained largely untouched, sales territories were kept intact, and even the respective incentive programs for each sales team were retained. Again, the logic behind this decision seemed sound: Competition among the banks still would be welcomed, even encouraged, to continue to grow each bank's customer base and add to the revenues of the larger institution. Best practices would be acquired in the process and passed along to other members of the new banking "family."

Sales Culture Key to Success

The successful outcome of this venture depended largely on the ability of the new organization to adopt a sales culture built around the new world of sales. Such mergers and acquisitions among banks and financial service providers offer one scenario that mandates there be a sales culture in place, to:

* Take advantage of the numerous cross-selling opportunities that result from such initiatives. Too often, significant sales opportunities are overlooked and the merger's potential is unrealized because no formal infrastructure has been created and implemented to support a cross-selling culture.

* Ensure that the best practices from the former organizations are retained to benefit the new company.

To bring a strong sales culture into the merger process, attention must be directed at synergies and product redundancies between the companies to best determine which will be retained and which will be discarded.

Evolution of a Revolution

As evidenced in the strategies of the regional bank mentioned above, the sales discipline has undergone so many changes--both in management and process--it is nearly unrecognizable from just a few years ago. The information revolution, still gathering steam, has propelled sales into its own revolution, because of:

* Increased sophistication and technical expertise of customers.

* Market consolidation.

* Product complexity.

* Technological advances.

* Globalization.

However, the sea change in sales is almost like a stealth bomber, visible when it's too late to mount a defensive, that is, after an organization has failed to recognize and heed the effects of change and its competitors have all but locked up the marketplace. …

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