The WBA LEAD360 Conference continues to be THE yearly opportunity for Retail- and Marketing-focused bankers to learn, network, and get inspired to better help the needs of clients and employees. A key area of feedback we hear is how important and valuable it is to interact with your peers across the state on our strategic and day-to-day challenges.
This year's Retail Roundtable discussion focused on Teller and Banker sales compensation. These are some key insights we'd like to share with everyone:
- #1 Rule of Economics – "People do what they're incentivized to do." Not only do they follow this rule, how you want this rule to be applied reflects on your bank culture. Think carefully about expectations you set for your team and how you apply accountability.
- Accountability and Reality Both Matter – You may plan to hold employees accountable, but if your reality is you won't… don't bother. People are smart; if you only talk about sales and don't back it up with incentives and recognition, or discipline, you won't change behaviors. Manage your expectations and goals to your reality.
- Changing Expectations? Expect Changes – If you're expecting a greater sales focus, are you willing to see your turnover increase? Banks hire employees into roles with no sales focus, or they've been in their roles for years, and then the game changes. Change is hard and sales is a different talent set. If you change the expectations you must be willing to increase turnover and hire new employees who want sales expectations.
- Customer Service Doesn't Equal Sales – "Gasp, blasphemy, I don't believe it." Reality check: if it was true (and most of us will say we provide great service), then your banks would be growing faster than anyone else. Sales is convincing people to take action. Your bank must be honest about the commitment and expectations you want to set, but never mistake service and sales as the same thing.
- Ethics is a Compass, Not a Guarantee – The first concern we always hear is the risk that a banker will act unethically, as we've seen from other banks in the industry. Yup, no doubt, that's a risk. Culturally does your bank put a high standard on ethics? Do you create an incentive plan that limits (you'll never remove) the risk of bad behavior? Do you have a system in place to review activities? If so, you're probably fine if you continue to be diligent about managing ethics and activities. However, bad people do bad things and you can't be held hostage by that risk. There are no guarantees, but you can limit your risk.
These were some great themes that banks must think through if they make changes with their incentive plans, or simply haven't reviewed their plans in a long time. The WBA Retail Committee will be focusing our energy on this topic this in the upcoming year.
Have a wonderful holiday season. All the best,
Udell is senior vice president of consumer banking at Monona State Bank and a member of the 2017-2018 WBA Retail Section Board.