If you think about the continuing scandals in financial services
involving mis-sold insurance, investments and financial advice, does it
not also strike you that the primary cause of this is not so much the
salesperson involved but the fact that the reward structure of the
companies concerned focussed on the volume of what was sold and not on
its suitability for the buyer? Yes, I know, insofar as financial
services are concerned regulation has swamped the industry and everyone
selling products and services in these particular environments is bound
by rules and forms and checking and compliance officers - but honestly -
did it have any effect? Apparently not, judging by the quality of
advice given. However, is this situation and the history of mis-selling
the fault of salespeople? Many news agencies appear to believe so
announcing the changes by saying, 'The aim is to stop policies - such as
private pensions and investments - being mis-sold by sales staff,
motivated by commission payments' (BBC News Business website: 31st
December 2012).
Certainly the reaction I received in 2002 when I delivered a speech to 300 financial advisers in Galway indicated the Luddite nature of the audience. Everything was going swimmingly well for forty minutes of the forty-five minutes speech until I ruined it all by ending with: 'you'll never be able to call yourself really professional until you stop taking commission and start charging fees'. That was that. Everyone thought I was insane and anti-sales. Well, ten years later, the UK Financial Services Authority has banned commission and believe it or not I am still passionately PRO sales and have never been anti-sales. What I am against is the way in which salespeople find themselves being unable to make a living providing a service to the customer without having to meet unrealistic targets which can only be achieved by selling people stuff they don't need.
I notice politicians are still paid when they don't achieve the employment, inflation, and health improvement targets they set. Why are top bankers still paid or receive huge payoffs when they drive the economy into the biggest period of recession in history? Why are financial advisers not able to make money by telling you the truth? The truth is we all want to do a good job and be the best we can be, but the environment we find ourselves in sometimes does not make it easy.
I used to work for a Building Society. It was owned by the members not by investors. If I had £1 in an account I had as many rights as the person who had £1m in their account. Having more money did not give me more rights. My job in the Building Society was to give people advice. Whether they took that advice or not made no difference to what I was paid. So when I met people who didn't pay tax I told them that they should move their money out of our Building Society and into an account somewhere where basic rate tax was not deducted at source. And what most of those people do? They put more money into the Building Society. It doesn't make logical sense but most of the buying decisions we make are not based on logic. Logically we should not buy and smoke cigarettes, but 20% of the population do so. There is no logic to buying nodding toy animals to sit on the back shelf of a car. Yet people do. There is no logic to voting for awful singers on the X Factor, but people do. We tend to buy emotionally not logically. The point being that when I told people the truth they trusted me.
Zig Ziglar said: 'do what's right for people and they'll do right by you'. It's a maxim I believe in and it has not only stood me in great stead in business but it also means I can sleep at night.
If your company has a product you believe in, then you shouldn't need to pay people commission to sell it. Pay people the rate for the job. Believe me, the people you employ will do right for your customers and your customers will do right by you.
Certainly the reaction I received in 2002 when I delivered a speech to 300 financial advisers in Galway indicated the Luddite nature of the audience. Everything was going swimmingly well for forty minutes of the forty-five minutes speech until I ruined it all by ending with: 'you'll never be able to call yourself really professional until you stop taking commission and start charging fees'. That was that. Everyone thought I was insane and anti-sales. Well, ten years later, the UK Financial Services Authority has banned commission and believe it or not I am still passionately PRO sales and have never been anti-sales. What I am against is the way in which salespeople find themselves being unable to make a living providing a service to the customer without having to meet unrealistic targets which can only be achieved by selling people stuff they don't need.
I notice politicians are still paid when they don't achieve the employment, inflation, and health improvement targets they set. Why are top bankers still paid or receive huge payoffs when they drive the economy into the biggest period of recession in history? Why are financial advisers not able to make money by telling you the truth? The truth is we all want to do a good job and be the best we can be, but the environment we find ourselves in sometimes does not make it easy.
I used to work for a Building Society. It was owned by the members not by investors. If I had £1 in an account I had as many rights as the person who had £1m in their account. Having more money did not give me more rights. My job in the Building Society was to give people advice. Whether they took that advice or not made no difference to what I was paid. So when I met people who didn't pay tax I told them that they should move their money out of our Building Society and into an account somewhere where basic rate tax was not deducted at source. And what most of those people do? They put more money into the Building Society. It doesn't make logical sense but most of the buying decisions we make are not based on logic. Logically we should not buy and smoke cigarettes, but 20% of the population do so. There is no logic to buying nodding toy animals to sit on the back shelf of a car. Yet people do. There is no logic to voting for awful singers on the X Factor, but people do. We tend to buy emotionally not logically. The point being that when I told people the truth they trusted me.
Zig Ziglar said: 'do what's right for people and they'll do right by you'. It's a maxim I believe in and it has not only stood me in great stead in business but it also means I can sleep at night.
If your company has a product you believe in, then you shouldn't need to pay people commission to sell it. Pay people the rate for the job. Believe me, the people you employ will do right for your customers and your customers will do right by you.
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