FEATURE
The proportion of customers who
have an exclusive relationship
with any single bank is declining.
To illustrate, Capitec Bank claimed approximately 900 000
new customers last year, primarily in the less affluent customer
segments. There are major initiatives to capture market share in
these segments by the other major banks. When will the segment
reach saturation? Cross selling is more important than ever in this
segment because there are fewer unbanked customers. The example
serves to illustrate the reality that competition is increasing for
all segments and all product categories. The proportion of
customers who have an exclusive relationship with any single bank
is declining.
Buying behaviour itself is changing. Technology is exerting
a dramatic influence on consumer behaviour, and this trend will
continue. The internet is already enabling consumers in some
segments to become more and more informed about competitive
bank offerings and pricing, and very importantly, service standards.
Customers are more self-empowered, and far more able to buy
comparatively, and as a result competitors are introduced earlier
in the consumer’s buying process. This means that a proactive,
informed and professional approach is required to win business, and
that the speed and agility of the sales force and the selling system
becomes ever more important.
Compliance requirements make the sales process more
administratively demanding. With particular reference to the less
affluent segments, a dramatic upswing in unsecured lending has
already attracted the regulator’s attention, amid concerns that
indebtedness remains too high and savings too low. This illustrates
the increasingly hawkish regulation of financial product sales, which
is already ruled by acronyms: FAIS, FICA, NCA, CPA.
While these acts have increased customer protection and helped
manage other risks, they have also created considerable compliance
requirements and diverted resources away from discovering
customer value and into administration, and more can perhaps be
expected. The proportion of staff training effort that is dedicated to
compliance has become disproportionate, and is exerting a negative
influence on banks’ ability to develop effective sales teams.
Sales consultants in retail banking are needing to achieve more,
with more sophisticated customers to whom they may have less
effective access, in a more competitive environment, in a regulatory
context becoming ever more stringent. This reality becomes even
more pronounced in business banking, where the solutions are more
complex and the stakes are higher.
26
SA BANKER
Edition 2
SALES THEORY: THE SNAP FORMULA
(The skill of the sales force) x (the number of applications)
x (the allocation of effort) x (the selling process)
Getting this right will be likely to require new behaviour
at various points in the sales value-chain. Over and above
the compliance requirements and systems and product
knowledge, the following behaviour in sales teams will have
to be optimised:
• decisions regarding where to allocate sales effort for
greatest reward;
• understanding the customer life cycle and the changes
that drive buying behaviour;
• gaining access to customers at the right time;
• analysis of customer buying behavio \