Hunters vs farmers: looks like we may have a winner

Among the many fundamental dualities of the financial world, along with risk/reward, greed/fear, stocks/bonds, borrow/lend and all the rest of it, there’s one that’s very specific to people in sales roles:  hunter/farmer.

Actually, like many of the others, this duality exists outside financial services too.  There are, basically, two entirely different ways to be a successful salesperson.  (There are also dozens of unsuccessful ways.  Selling is a tough gig.)

What they are, and how they differ, is fairly obvious from the names.  Hunters hunt.  They love the thrill of the chase.  To them, the first sale – the initial conquest – is by far the most important.  After that, they tend to lose interest.  Don’t expect much ongoing CRM from a hunter.

Farmers farm.  The pleasure lies in nurturing relationships with a herd of clients over time.  There is more pleasure in the upsell, or the onsell – and also of course in the referral, which to them is an infinitely better way to acquire new clients than all that rather brutish hunting.

Like all sales people, hunters and farmers need managing, measuring and motivating.  Selling, as I say, is a tough gig.  Very few people will give it everything they’ve got unless a) they know they’re being scrutinised, and b) they can expect great rewards for outperformance.

On the whole, “outperformance” means very different things to the two different species.  An outperforming hunter sees more prospects, holds more first meetings, produces more proposals, uses more shoeleather. An outperforming farmer has much more regular client contact, buys more lunches, spends much longer on each phone call  This means that if you’re managing a salesforce that includes both hunters and farmers, it’s difficult to come up with a single set of metrics that works for both.

Except, crucially, for one big thing.  The means may be different, but the end is the same.  The quality of both hunters and farmers can be measured, and compared, with one brutally simple metric (in fact, the brutally simplest of all):  value of new business written.  Which, at the end of the day, is what all that hunting and farming was all about.

This somewhat simplistic account explains the basis of by far the biggest and most successful sales force in UK financial services today:  the St. James’s Place Partnership.  It consists of rather over 4,000 individual sales people, skewed to some extent in favour of hunters but with a significant minority of farmers, all motivated to achieve outstanding performance with an escalating programme of generous rewards for value of new business written. 

Yes, you’ve read about it, the famous cruises and cufflinks.

But here’s the thing.  The cruises-and-cufflinks revelations have blown up such a shitstorm that SJP has had to promise to take a fresh look at its incentive scheme – and although we don’t know what any scheme may look like yet, there are good reason to expect that it’ll be based on a much broader set of criteria.  Not just new business written, but also other measures like client satisfaction, persistency, repeat business, even qualitative measures of client perception.

Can you see the big issue arising?  It’s pretty obvious:  these are farmer metrics, not hunter metrics.  They’d result in a world where the farmers in the Partnership would be swanning off on all-expenses-paid cruises and wearing new cufflinks daily (brooches for the ladies), while the farmers live in a miserable world of self-funded holidays and cuffs fastened with buttons.

That’s not sustainable, and can only lead to a situation where the hunters quickly vote with their feet and head off to other markets (photocopiers?  double glazing?) where the skills of the hunter are still recognised and rewarded.

That could be part of a dramatic evolutionary process in which the current hunter/farmer balance (I’m reckoning roughly two-thirds hunters to one-third farmers, but I have no real evidence for that) gradually skews further and further towards farmers.  In the long run, that’ll be a good thing for the company and, in particular, a very good thing for the clients.

But as rebuilding-the-aeroplane-in-mid-flight challenges go, that one is right up there.  Good luck to the management team who have to make it happen.

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