Pat’s Blog

“Don’t hire a person for what they can’t do; hire them for what they can do.” — Peter Drucker

What I’m hearing in the field is how difficult it is to hire good people. Some financial firms are having to interview 50 candidates before hiring one good sales person. While this means more time and effort are required to find a good match, there are ways to make the hiring process more efficient. For example, pre-hire assessment testing can identify candidates who do not possess the inherent traits to excel at consultative sales, eliminating up to a third of the candidate pool.

“The most effective way to manage change successfully is to create it.” — Peter Drucker

I recently read a comment by economist and New York Times columnist Paul Krugman that I found interesting. In essence, he said that many of the major players are warning against unconventional measures regarding the national economy but Krugman says, “we’ve already seen the consequences of playing it safe.” I think the same concept applies to sales in the financial industry. We’ve been playing it safe but I believe the current times call for new thinking whether it’s hiring new people with a fresh outlook or retooling worn out compensation structures.

“Every organization needs one core competence: innovation.” — Peter Drucker

In my travels, I’m hearing a lot of discussion about the Federal Reserve’s recent compensation changes for sales people in the financial industry. There seem to be two camps of thinking on the topic. One group believes the changes foretell the end of our industry as we know it. The second group, comprised of high achievers, believes that they will figure out what they need to do to succeed.

Top producers tend to maintain high performance standards regardless of external or market conditions.

“Find out what needs your customers want fulfilled today.” — Peter Drucker

On the surface, it may seem like the relationship between the sales person and the customer has changed over the years. Certainly it’s true that customers have unprecedented access to information that can help them during the buying process. In addition, the sheer volume of information available to consumers means prospects are more likely to present originators with houses they want to see instead of the other way around.

However, the answer to the fundamental question, “What does the customer want from the sales person?” hasn’t changed. No matter how well-informed or knowledgable customers become, they still want a sales person to take then through the buying process and make them feel good about their buying decision. They still want the salesperson to take on the role as a third-party expert. How does your sales force view their role in the sales process?

“Does your organization sacrifice the long-term wealth-producing capacity of the enterprise to produce short-term results?” — Peter Drucker

Recently, I spoke with a top producer who in the last few years has moved from wholesale to reverse mortgages and now is going back to wholesale. Even though she has not done wholesale in two years, she plans to use the same approach that garnered success in the past —focus on growing the customer’s business.

While this is not a radical concept, it’s one that I don’t hear often enough from today’s originators. What I do hear is producers claiming that if only they had better underwriting and pricing, they could do more business. In my view, it is a given that the challenge of any sales person is to create demand and “wow” the customer beyond his or her expectations. High achievers know that long-term success is based on how well they grow the customer’s business.

“Don’t hire people based on your instincts. Have a process in place to research and test applicants thoroughly” — Peter Drucker

At financial firms large and small, I hear from managers who are struggling with how to increase individual production on their sales teams. This may seem like a development issue but the heart of the problem often lies in hiring decisions. The hard truth is: All sales candidates are not created equal. Research holds that only 1 in 4 candidates possess the raw sales talent to excel in consultative selling. Managers who want to hire better quality salespeople need to have a process in place to objectively determine whether candidates have natural sales talent.

“The ability to connect and thus, to raise the yield of existing knowledge is learnable.” — Peter Drucker

For managers, the pressure to push sales teams to achieve optimum performance has never been greater than right now. While it’s tempting to look for a “magic bullet” to correct performance problems, the most effective approach is less glamorous: “back to the basics.”

Smart managers know that one of the best ways to achieve better sales results is to revisit and reinforce basic sales skills. How much does the sales person know about prospecting? How about closing? Every individual sales person has strengths and weaknesses. Improving sales knowledge where deficiencies exist can move sales performance from good to great. The key to success? Measuring the sales person’s knowledge and customizing training to what the individual needs to know.

“What does the customer consider value?” — Peter Drucker

Value creation in marketing and sales is a fundamental issue that companies must address for long-term success. From what I’ve observed in my consulting practice, marketing and sales are typically separate silos. The all-too-common debate between the two boils down to this: Marketing argues for more investment in the brand, while sales wants more feet on the street. When there is no reliable way to tell which party is right, the one with the most clout wins the debate or the part of the business the CEO comes from is the deciding factor. An ideal solution to this problem is a process approach because it examines all the activities that produce a certain result—namely, winning a customer.
Marketing and sales people are challenged to see that the things they do and their respective inputs and outputs depend on one another.

Discovering what the customer values means answering questions, such as: What is it that the customer really wants from our product or service? Often times, companies seem to confuse customer satisfaction with customer value. They forget that people drop services they are satisfied with all the time if they find something of greater value. What do your customers value about your business?

“Specialized knowledge by itself produces nothing.” — Peter Drucker

During interviews, one of my clients asks sales candidates if they communicate with customers via a blog, Twitter or other social media. This can be important but not for the reason you might think. Technology by its very nature is always evolving so being technologically savvy is not the issue. What it does indicate is a sales person who is willing to adapt to changing customer behavior. The best sales people possess an unrelenting drive to better serve their customers which in this case, means using the latest technology to get their message out.

“All organizations must be capable of change.” — Peter Drucker

In my travels, a number of people have been talking about how many more prospects they need today to result in a successful transaction. For example, in the past, if it took 10 prospects to achieve a certain conversion rate, now it requires five times that amount to hit the same rate. While there are a number of factors at play here, the simple fact is: What worked yesterday will not necessarily work today. Companies and sales professionals need to be willing to make adjustments if they want different results.

The quality of the sales staff can make a difference. High achievers are constantly prospecting and more readily adjust to marketplace changes while average producers tend to keep doing the same things. It’s not about working harder but smarter.