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How different is selling an FMCG product to selling a banking product or software solution?

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In the early 2000s, when Indian banks hired field staff with FMCG (Fast Moving Consumer Goods) experience to sell banking products, there was a huge uproar in the community. There was a belief that only experienced bank staff could sell banking products to new consumers. Even cross selling a new concept or banking product to an existing customer, required banking expertise, persuasion and marketing skills. It was perceived that since the educated urban customer was aware of the nuances of conventional banking products offered by most banks, as well as their advantages and disadvantages, a novice would not be as effective in selling those products as an experienced bank hand. Pundits proclaimed that getting new sales staff to push banking products, which were becoming increasingly complex, would not work.

However banks went ahead with recruitment and provided sales training to the new hires, introducing them to the unique aspects of their own and rival products. The self-driven sales force approached many customers in urban areas, who had remained loyal to their banks. They advocated the maintenance of separate savings/deposit accounts for different businesses, a practice that was unfamiliar to the Indian banking customer of that time. Multiple product variants were launched to penetrate the market by meeting the requirements of different client segments.

During this time, the banks strengthened the account opening procedure and KYC check in keeping with RBI norms; they also centralized the account opening process. This ensured the proper scrutiny of documents and also ensured that no accounts were opened using incomplete or fake documentation. Stipulations of minimum & average balance, and penalties for non-compliance were introduced to check the opening of operative accounts to conduct one-off fraudulent transactions. Although a fraction of accounts were closed for poor quality, the overall number of accounts and deposit balances increased manifold.

Though there are no statistics to prove that the field staff was successful, the initiative paved the way for many banks to experiment with new ideas. The success on the deposit side was extended to the retail asset portfolio, subject to stricter controls. With a firm customer base, the staff at the branch could easily cross sell different products with varying complexity in the longer run.

This proved that a well-trained sales force could sell complex banking products, even if they lacked prior experience. It was more important to acquire the sales and marketing skills necessary to identify the client, understand the requirement and sell the right product. The selling process was the same across sectors, be it consumer goods, banking, software or any other. And although some products like software were more complex to sell, as long as their value proposition was properly explained, there would always be a chance of success. New products and solutions might take time to establish themselves in the market, but with the right branding and sales push, would eventually achieve that objective.

The lead time to sell a software solution is likely to be longer than that of a banking product. A customer might purchase a banking product without adequate assessment at times, but always has the option to exit. On the other hand, it may not be possible to get out of a software licensing arrangement with a vendor. Hence the client must conduct extensive research and due diligence before finalizing the purchase, because it usually involves a long-term relationship with the software vendor.

To conclude, it is possible to sell a simple product even with little experience or product knowledge. However, only competent field staff or those with varied experience can sell complex banking products or software solutions. That being said, it is not necessary to have prior sales experience in the same domain. What is necessary is unique marketing skills combined with knowledge of products, competition and consumer need.  Additionally, selling software solutions would require greater technical knowledge than say, selling banking or consumer products. The purchasing decision process is also different - usually an individual decides whether or not to buy a banking or FMCG product, but invariably, it is a panel of senior IT and business executives that decides about buying a software solution. For this reason, the selling process involves elaborate discussion, evaluation and analysis, and is accordingly more time consuming.

Comments

Good Blog. Insights gives a clear demarcation of selling products low in the value chain vis a vis to that of the core banking product. More importantly intervention of human cannot be completely neglected in completing the same. well written by reghu. Keep it up

Very pertinent and relevant in today's scenario.

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