Wells Fargo has put in place a new compensation program for retail bank team members to focus on the customer experience within its branches. The new compensation program took effect on Jan. 1, 2017, and applies to all branch team members, including managers, tellers, and personal bankers.
Wells Fargo eliminated product sales goals in its branches on Oct. 1, 2016, following settlements with regulators and the city of Los Angeles related to improper sales practices. The company pledged to make things right for customers as well as identify and fix operational and cultural problems that may have contributed to these practices.
“This plan is another step in our journey to restore trust with our team members and our customers, and makes delivering a great customer experience our highest priority,” said Mary Mack, who runs the Community Bank. “Our future success depends most of all on our ability to make the changes that will restore that trust, and this new plan is an important one of those changes.”
The plan was designed by an integrated team of Wells Fargo leaders with input from front-line branch team members from around the country. The compensation team engaged independent expert Mercer Consulting to provide advice and perspective on the plan design. Mack gathered input on the design during a listening tour that included visits to more than 20 cities and meetings with about 3,000 Community Bank team members. Front-line retail bankers expressed their desire for a compensation plan that creates the type of positive environment they can go into every day to serve their customers.
“The charge to the design team was to create a plan that puts the focus squarely on customer experience, includes greater oversight and controls than ever before, and helps foster an engaging environment for team members where they can succeed,” said Steve Bond of Corporate Compensation, who leads compensation planning and implementation for the Community Bank. “The team was passionate about achieving those goals, and we have a very strong plan. We will spend time throughout 2017 coaching the team to ensure we successfully achieve the objectives of the plan.”
New ways to measure performance
Key aspects of the new compensation plan include:
- No product sales goals.
- Primary customer growth and feedback: A larger allocation of incentives is associated with direct customer feedback and growing the number of primary customer relationships.
- Longer-term view: Metrics in the plan take a longer-term view of customer relationships and incorporate the quality of customer experiences and customer retention.
- Team-oriented performance: Entry-level banker incentive plans are based on team rather than individual performance.
- Greater participation: A significantly higher percentage of team members will have the opportunity to earn incentive pay under the plan, which is expected to drive greater alignment across the Community Bank.
- Stronger oversight and risk controls: Stronger controls have been put in place at the local, regional and corporate levels to monitor behavior; additional reporting is built into the plan to provide enhanced oversight of the sales process.
“Huge thanks go to Steve Bond and the design team for leading the effort to create a plan like we’ve never had before in less time than we’ve ever done it. This group worked long hours with enthusiasm and dedication to incorporate the best ideas and best practices into our new plan,” Mack said. “At the end of the day, our team members want to go home and feel that the company has enabled them to take great care of clients. The new plan is designed to center on understanding customers’ needs. When we take time to listen and understand, customers will want to do more business with us.”
Mack added: “We will measure our performance based on direct customer feedback as well as by how much our customers choose to transact with us and grow their balances, not just simply trying to sell the next product.”
“Importantly, throughout all of our efforts, we will be establishing different expectations of our leadership because every leader is responsible for managing in the spirit of the design of the program.”
Delivering great customer service
Larisa Perry, lead regional president for the Northeast, was one of the executives who participated in the design of the plan. Larisa emphasized the increased focus of the plan on delivering great customer service. “The entire incentive plan is built around customer experience. If we deliver on that and meet the customers’ needs, they will use our products, grow their business with Wells Fargo, and tell their friends and family. Every one of the metrics in the plan encourages a better customer experience.”
Rick Redden, lead regional president for Washington D.C., Maryland, Virginia, and North Carolina, underscored the importance of the plan’s longer-term approach. “Rather than measuring a single product at a moment in time, the new plan is focused on building a relationship over time. This is much more conducive to delivering a great customer experience. It’s less about one interaction, and more about adding value and the customer’s confidence in doing business with us.”
Focus on team performance
John Gavin, regional president for Dallas-Fort Worth, Texas, commented on the plan’s emphasis on a team approach. “Our customers will see a genuine focus on them from everyone in the branch and they will experience the best that branch has to offer them. Great customer service depends just as much on how the teller greets the customer as how that customer is introduced to a banker. As a collective team, our bankers will be focused on understanding our customers, understanding their needs, and constantly delivering value for them. When we do that, we become a trusted advisor and trusted bank for our clients.”