24 February, 2023

The Nine Key Lessons Learned Transforming A Failing New International Payments Business Into A €200m+ Per Year Success - Part 3

In the first part of this series I started to describe the background to Deutsche Bank's international payments business, FX4Cash, and the circumstances in which I came to lead the business. I covered how we prevented the business from being closed down and the first step we took on the path to success in the second part. In this third part I will detail the problems we faced with the way in which FX4Cash was being distributed and the changes we implemented to unlock its potential.

Distribution Strategy Overhaul

A key factor in the initial failure of FX4Cash was the original distribution strategy. The distribution strategy was the most glaringly obvious problem with the business and it is somewhat unfathomable that it was ever given the green light by whoever approved it. Whilst the distribution strategy required an overhaul, so did the governance of the distribution process and the approach to customer engagements. We cover each of these in the sections below.

Starting with the distribution strategy itself, the original strategy entailed having a dedicated team of five members of the FX4Cash team selling the product across all customer groups. The existing sales and customer relationship management teams across GTB and GFX that covered the target customers consisted of hundreds of people. Incomprehensively, instead of leveraging this broad group, who had deep knowledge of their customers cash management needs, the initial strategy was to have five people globally selling FX4Cash, who had no relationships with the target customers. This was a typical case of individuals trying to create their own personal monopoly in the flawed expectation that it would be a vehicle to achieve promotions and bonuses. The strategy put this small team in direct conflict with the GTB and GFX sales and customer relationship management teams and the failure of the strategy, in part, resulted from these teams being protective of their relationships. The failed strategy was a clear conflict between the personal ambitions of a few individuals versus what was best for customers, the business and the JV sponsors.

The new distribution strategy was to empower the broader sales and customer relationship management teams in GTB and GFX to sell FX4Cash directly to their customers and for these teams to be properly incentivised. The distribution strategy transformation was easy to determine but executing the new strategy faced severe resistance from the existing FX4Cash sales team. Implementing change that is unpopular with people that you are working with on a day-to-day basis is difficult, stressful and, as in this case, can make you the subject of campaigns to personally undermine you.

In dark moments, you need to be able to draw on your reserves of self-discipline. In my experience, in such a situation, it is important to maintain perspective and, if necessary, to regularly go back to first principles and the data that supports your decision to change strategy. You need to allow the data to reinforce the basis of the decisions you have made to help you persevere on the right course. Leading radical and unpopular change in a business can be a lonely and emotionally taxing journey. On the worst days you simply have to remind yourself that the sun will rise again tomorrow and eventually it will all be ok. There were many such dark days on this journey, but I benefited greatly from the support of a core group in the FX4Cash team who embraced the changes we were making and who were determined to make the business successful.

When individuals seek to prevent change by trying to personally undermine you, and when only you and your senior sponsors are aware that you are working tirelessly to save the business and the jobs of the very people who are attacking you, it is critical that you develop your own personal mechanisms maintain a positive demeanour. For me, I found the times that I was able to be completely alone, on the regular long-haul flights I took from London to New York or Asia, gave me the space to get my thoughts out of my head and on to paper. Processing those thoughts on those long journeys enabled me to regain the perspective I needed to keep going.

The existing FX4Cash sales team were given new roles as Product Sales Specialists. In this role they were given the objective of supporting the broader sales and customer relationship management teams with product expertise. The sales teams would retain responsibility for managing the relationships with customers and achieving sales. The Product Sales Specialists were responsible for providing the expertise in the product to enable the sales and customer relationship management teams to close sales of FX4Cash.

The model for the Product Sales Specialist was based on my own personal experience in the role of Risk Management Advisor ('RMA') at O'Connor & Associates early in my career. The role of the RMA was to provide the expertise to bridge the gap between the trading and sales functions in the distribution of derivatives, in my case, foreign exchange derivatives. A very senior O'Connor executive came up with the RMA role. It was based on a role that Intel employed to bridge the gap between engineers and salespeople in the distribution of microprocessors. It is a role that, particularly in the case of new products, enables a transfer of knowledge to salespeople that ultimately enables them to be self-sufficient. It accelerates the sales process by enabling distribution through broad sales channels whilst reducing bottlenecks caused by lack of product knowledge.

It proved to be a very successful model for selling FX4Cash.

This experience reinforced the need for determination and persistence to see change through when it's the right thing to do. If you have analysed a problem thoroughly, taken onboard the input and intelligence of key stakeholders and stress tested your strategy with your sponsors, then, you can be confident in the path you have laid out to enable the business to achieve success. There may be difficult days on that path, but they don't last for ever and success feels all the more gratifying for having overcome the obstacles encountered along your path.

The Role Out Of Sales Training To Sales Teams Newly Empowered To Sell FX4Cash

Another critical change to the distribution process was in the way in which the product was pitched to clients. As I described in the first part of this series I had studied the existing sales pitch book in great detail in trying to understand the business and had observed an actual pitch. It was totally unfit for purpose.

The powerpoint presentation for the pitch was very long. When it was presented to customers it filled all the available time. There was no time to obtain feedback from the customers and, given that the pitch was somewhat incoherent, it is unlikely the customers stayed mentally engaged for a full hour of being talked at. The best way in which I can describe the original pitch is fifty slides detailing every feature of the technology that had been built. If it had any message contained in it at all it was probably saying "Hey, look what we've built, aren't we smart!". It was not surprising that it wasn't working.

I spent lots of time with the FX4Cash team and its stakeholders. I was able to ask lots of dumb sounding questions as I was very open and honest about my lack of payments knowledge. Over time, a picture of what we were really selling emerged. It turned out that the fifty powerpoint slides of complexity could be simplified into stating the three problems that FX4Cash solved for clients, followed by five questions the salesperson needed to ask a customer to be able to follow up with the customer with a bespoke proposal.

Critically, by design, the sales meetings would have salespeople talking for a small amount of time, allowing customers to talk for the bulk of the meeting to answer the five questions. The answers the customers gave enabled the sales teams, with the help of the Product Sales Specialists, to tailor a specific configuration of the FX4Cash product to solve the customer's specific international payment pain points.

If you are regularly involved in sales pitches where the customer is talking for less than half the meeting, then go back to your pitch book and find ways of reducing it to only describe the problem that you solve. Manage the timing of your pitch to allow your customer the time to describe the specific challenges they face for the problem that you solve.

We now knew how to sell the product and the first few trial runs of the new pitch method provided us the feedback we needed to know we were onto something. The challenge was how to get this across to hundreds of salespeople.

I presented the new pitch and the feedback from the trial runs to the FX4Cash Steering Committee and was given the budget and go-ahead to produce and roll out an online training course for salespeople. The course was multimedia, including hiring actors to role-play customer pitches over a number of scenarios. The simplicity of objective: the three problems FX4Cash solved and the five questions salespeople needed to ask, and repeating that objective over a number of scenarios role-played by the actors, was compelling.

Our partners in the marketing and training functions did an amazing job and the course they delivered far exceeded our expectations. Senior sales management fully embraced the plan for the training and helped the FX4Cash team enormously by making the training mandatory for all their teams. They also closely monitored who had not completed the training and brought it up in their sales meetings to enforce the mandate.

Within three months the vast majority of salespeople and relationship managers were trained and equipped with the new six-page powerpoint slide deck that captured the new pitch.

When it comes to pitching a new product, simple is good but simpler is better. Whilst the FX4Cash product was complex, exposing that complexity to customers was unnecessary and didn't achieve anything. Simply framing the product in terms of the problems it solved and then getting customers to talk about their specific challenges with those problems, enabled rapid sales progress.

Implementation Of Extensive Sales Governance Processes

In addition to transferring sales responsibility to the broader sales teams, we implemented extensive new sales governance processes. From my experience of having managed global sales teams in the past, I have a strong bias towards systematically identifying and ranking opportunities and then being equally systematic in measuring the progress of converting those opportunities into customers.

To identify opportunities for FX4Cash we were able to mine data in the GFX business to identify customers who were doing large numbers of small transactions. We used a cut-off amount of USD 1mio and considered anything below that amount as potentially payment related. The data enabled each opportunity to be ranked by total volume. We were also able to determine the full breakdown of that volume by currency which, in turn, could be used to estimate potential revenue.

Having the data to hand enabled the FX4Cash team to guide the sales teams as to which customers represented the biggest opportunities. We knew these customers had payment related flows but it was unlikely Deutsche Bank was getting a large percentage of the total payment flow as the customer most likely had the underlying accounts spread across a large syndicate of bank lenders. Our goal was to first get the small flows we were seeing in the data to be mandated by the customer to be processed by FX4Cash. Based on our analysis of existing corporate customers and the growth in their volumes over time, our expectation was that once the customer experienced the benefits of the fully automated straight through processing that FX4Cash provided they would redirect international payment volume to FX4Cash that was currently being captured by competitors through the slower, less efficient, and more expensive legacy processes.

It was one thing to provide the sales teams with the data but kick-starting their sales of FX4Cash and then building momentum required a lot of hard work. Monthly meetings were scheduled with sales teams in each sales location. There were often multiple sales teams involved in each sales location, both within GTB itself and across Global Markets and GFX.

The meetings were all run in exactly the same way. The FX4Cash team provided ranked customer lists some days prior to each meeting with details of the flows that came from the data analysis. Each ranked customer list line item had the relevant salespeople across the various teams identified as being responsible for the customer. In each meeting we started at the top of the list, that is, the greatest estimated revenue opportunities, and went through the whole report line by line, with the relevant salespeople expected to update the meeting participants on the current state of each opportunity. Initially, these meetings lasted for hours.

As you can imagine, the meetings were not that popular with the sales teams. For the first few months, most of the updates were increasingly tenuous excuses for lack of progress. However, over time and with the intervention of senior sales management, who helped us enormously by taking time out of their busy schedules to attend the meetings and hold their salespeople to account, we started to see progress. The support of senior sales management continued for many months, represented a significant time commitment, and made a huge contribution to the success of FX4Cash.

Another key factor which came from my past experience of driving distribution across globally distributed sales teams was being prepared to turn up in person for the meetings. I personally attended as many of these meetings in person as was possible. This entailed monthly travel to the US and within Europe. I travelled to Asia every quarter and would attend sales meetings in up to ten countries per trip. It was exhausting but I cannot overstate the positive effect that turning up in person has on the productivity of salespeople. It's really difficult for someone to look you in the eye each month and make another excuse for why they have not made progress on a well-defined opportunity that has been handed to them on a plate via the data analysis.

As always, there was a small but significant number of salespeople who were very supportive of the new strategy and really didn't need any push from us. These salespeople delivered enough quick wins to demonstrate the potential of FX4Cash long term. They also set an example for the rest of the sales teams and gave senior sales management success stories to champion. Over time, the meetings became easier as more and more salespeople had successes to announce. As salespeople started to see the revenue ramp up in the CRM systems, they realised that FX4Cash could transform their ability to achieve their sales targets. After several months of hard work and hard miles, momentum started to build.

As anticipated, once customers started to recognise the benefits of FX4Cash they transitioned all their international payment flows to the product and revenues started to grow faster than simply by adding new customers.

The old adage "If it gets measured, it gets managed" is true. Systematically identifying the greatest revenue opportunities, making salespeople accountable for converting those opportunities and then measuring progress on a monthly basis, drives the necessary sales productivity to deliver results.

Coming Up...

In the next post in this series I describe how the FX4Cash team was reorganised and given new roles and responsibilities. I will also cover the transformation of the product management function and how and why the operations team were empowered to be leadership peers in the new structure.

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