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Tuesday, 9 November 2010

Developing a stronger Selling mindset - OFT review on new entrants to Banking in UK




You can ‘rev up’ your car engine by depressing the accelerator and make loads of noise but no progress is made until you engage the gears.



Similarly new banks advertising better rates and offering choices to clients through advertising can stimulate interest but it may not enough to cause customers to change current supplier or brand.

Some of the toughest objections in selling occur when a salesperson is competing against an incumbent supplier. This might be expressed in retail banking as:-


“I am happy with my current bank”


“I’m sure what you say is all well and good but I would need a damned good reason to change over my account to you.”


“Changing over to your bank is too much hassle”



Of course whether these objections are always true or not, is not the point. They are how the client feels or thinks they feel.

Clients are not purely rational in banking or in any business.

New entrants to banking have to jump through a number of testing hoops to gain regulatory approval and the requirements for capital are tough as Metro bank can attest.


The problem for all those who want to encourage competition in the banking sector including the Independent Banking Commission ( IBC) is that offering better choices is one thing , but persuading the consumer to act on them is quite another .


Clive Maxwell, executive director for goods, services and mergers at the OFT, said: "A number of firms have recently entered the market, and more are expected to follow.

While we found few barriers to setting up, new firms trying to grow in this market face difficulties due to :

customers' low levels of switching,


loyalty to incumbent providers,



and attachment to a local branch

This was most marked for personal and business current account customers, whereas personal customers were more likely to shop around for loan products.”

Maybe developing a stronger Selling Mind-set is part of the answer!

For some in the banking world “Selling” still requires quite a culture change. Many did not join the bank originally to be ‘salespeople’.
It was not the language used in the recruitment ad or at the job interview.

They are happier to say that they ‘lend’ money, ‘arrange’ loans and ‘conduct’ reviews but tend to baulk a little at describing their role as ‘selling money’.

Like most in B2B selling they also have large parts to their job that are of a more technical nature. Selling is only a part of what they do.

Much of retail banking is a reactive process. Many in the banks still appear to live their world as might have one Ralph Waldo Emerson (the great American thinker and essayist (1803-1882 )) whose perspective on business was expressed once as:-

“If a man writes a better book, preach a better sermon or build a better mousetrap ,though he sites his works in the middle of a forest the world will beat a path to his door”


Perhaps rather than an Emerson mind-set Banks could look to the retail sector in Grocery world.

Thomas Lipton , self made man and merchant(1848-1931) had a more proactive view of business.

“When a hen lays her eggs she clucks the news all around the
farmyard.

When a duck on the other hand lays her egg, she does it in
complete silence.

But who the hell buys duck’s eggs?!!”



Well that suggests a lot of energy and effort is required. But surely 'clucking the news' is much like the 'revving of our car engine' mentioned at the beginning.

Selling's job has to help sell the eggs at market. Customer conversions are the first true measure of the new banking entrants- thereafter holding onto them.


So, what is selling?



Alfred Tack founder of Tack International defined selling some sixty years ago as

“Selling is Persuasive Communication against resistance”

That's not such a bad definition for new banking entrants or anyone in today's drive for new business.




Good luck and good selling to Metro bank , Tesco, Sainsbury and all those courageously entering the new banking arena.




Virtutis Fortuna Comes - Fortune favours the brave!

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