Incentive Programs

Offering members products and services that will benefit them is what all of our employees should be doing on a daily basis.  Unfortunately, the banking industry tends to staff order takers instead of sales people.  One way to get your team to start noticing sales opportunities is to pay them for it.  There seems to be mixed feelings on this issue.  Some agree it’s a great motivator and others feel cross selling is part of the job description.  Take a moment and step into their shoes. For them it is easier to do the transaction requested then it is to take an application or open up additional accounts or services, so why offer more when it means more work?  The start towards a solution is to offer an incentive program.  I say start because changing your businesses mentality from taking orders to relationship selling is a culture change.  However, incentive plans are a good way to get started.  Below are a few different approaches to incentive programs.

Price everything the same.  This is the easiest way to set up an incentive program.  This methodology will let you know quickly how eager or resistant your employees are going to be. It is also easy for your employees to understand; no matter what they cross sell they will receive a predetermined dollar amount. 

Group price your products.    Group pricing keeps the incentive program easy to understand and at the same time you are not paying the same incentive for a mortgage that you are for telephone banking. An easy way to set this up would be to price all loans at one amount deposits another and services would be a different amount. 

Tier pricing.  Now it gets a little more complicated.  Tier pricing requires a lot of time and buy in from your employees.  When using tier pricing, start by analyzing everything you offer and assign a payout price based on the product or services worth.  For example at our credit union an auto loan is worth more than a CD.  Before launching a program like this make sure you have tracking in place and a way for your employees to easily reference the payout amounts. 

Goal pricing.  Another way to establish an incentive program is through goal pricing.  Goal pricing can be set up as an overall goal, individual goals or team goals.  We have found individual goals work best.  You can pay the incentive when the employee reaches their goal, as they reach their goal, or both.  There is nothing like getting a bonus when you reach your goals, it is very motivating. 

No matter what way you choose to introduce incentives into your institution make sure it is followed up with public recognition.  It’s amazing how far a few extra dollars and acknowledgement can go.


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