Before Christmas I read a story about Lloyds Banking Group – the bank that uses a black horse (synonymous with Dick Turpin) as its logo – which said that the company had been fined £28m for “serious failings” in relation to bonus schemes for sales staff. The Financial Conduct Authority (FCA) said it was the largest fine that it or the former Financial Services Authority had imposed for retail conduct failings.
It appears that the management of the bank had introduced a bonus scheme and then pressurised staff to hit sales targets or risk being demoted and/or have their pay cut, the FCA said. Lloyds Bank has accepted the regulator’s findings and apologised to its customers. The fine could have been £35m had Lloyds not agreed to settle early!
“In one instance, an adviser sold protection products to himself, his wife and a colleague to prevent himself from being demoted,” the FCA said. Lloyds TSB offered some staff a “champagne bonus” of 35% of their monthly salary if they met sales targets, while Halifax and BoS offered monthly “grand in your hand” bonuses.
This story really makes my blood boil for a number of reasons:
The bank is technically part owned by the UK Government so we are fining ‘ourselves’ and it will be longer before it can be fully re privatised
It is a shocking indictment of the morality of management in a major UK PLC
It put frontline bank staff in an impossible dilemma
It shows that senior management at the bank learned NOTHING from the banking crisis at all
I teach managers to think and behave ethically but reality is they cannot operate ethically if their managers don’t let them
Richard Lloyd, executive director of consumer organisation Which?, said: “This (fine) should send a clear message to the banking industry that mis-selling won’t be tolerated and that customers, not sales, must come first.” He called for the FCA to deliver “a big change in banking culture across the industry”.
In our world today retail sales (including banking) has become a ‘high pressure’ approach, retailers know that if a customer leaves the shop the chances are they will buy at another shop or via the internet. Therefore the client must be ‘sold’ there and then.
“Can I help you?” has gone from a polite introduction to a new meaning; “Can I sell you something?”
I have worked in business to business sales for many years and high pressure sales tactics was the norm through the 80s and 90s, whilst retail was seen as ‘soft sell’. This has completely reversed these days as you will witness anywhere on the High Street.
Why do retailers not learn that what we want as consumers is great service from knowledgeable staff who are motivated to get us exactly what we need, rather than sell us something we don’t need or is unsuitable!
No wonder we have started to buy more and more goods online! I want our High Streets to thrive but high pressure selling is not the way forward.