BANKTHINK

Are Your Bank's Branches Billboards or Backdrops?

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There was something that did not happen in 2012 that was instructive to me (and it had nothing to do with the Mayans): I did not conduct a single banking transaction at a branch in 2012. I visited many for work but none for personal banking.

I wrote one check in 2012 to our sprinkler system repair guy. I don't mean that I wrote him one check. I wrote one check all year…period.

True, my wife handles most of the banking in our household. She wrote 16 checks last year (mostly to school and Scouting fundraisers) and visited a bank branch once to retrieve my son's birth certificate from a safety deposit box.

All checks we had to deposit in 2012 were deposited with her Android phone from our kitchen table. That's not an idiom. She only deposits checks via her phone while sitting at the kitchen table. It's her banking spot. (I've learned not to ask.)

And, oddly enough, those checks were scanned to a bank that was a very early provider of that service, but isn't our primary bank. She later goes online and transfers money to our primary bank when needed.

When I asked why she goes through that extra step, she asked if I would prefer handling the transactions. Suddenly, that system seemed just fine to me.

So in 2012, my household did not actually conduct "banking" in a branch all year. That settles it. Branches are demonstratively of no real use to us and therefore irrelevant to our choice in banks… right? Well, hold the smartphone on that one.

Late in the year, my wife mistakenly made a transfer from the "wrong" account at our primary bank. She was hit with a fee. And she reacts to "penalty" fees (and expired coupons) like Luke Skywalker learning of his real father.

Attempting to channel that energy into something productive, I suggested it may be time to consider changing banks. This led to a quick conversation about possible choices.

And the first thing she began taking into account was the very thing we have established should mean the least to us. She started listing bank branches in our local community.

When I pointed out that we don't really use branches, she shared her logic. She feels that banks offer basically the same products, technology and pricing anyway. So, she'll take the availability of a branch that she will likely never use over not having that availability. That's her logic and, by default, my household's.

But the funny thing was that the list of local branches she could rattle off was pretty short. She left out several branches I could think of, primarily because I pay more attention to bank branches than a normal human. Even then, when we Googled it, we found at least one-third more branches located along some of our normal commutes than either of us could recall.

Two of the branches that came up in our online search are side-by-side, next to a favorite restaurant of my kids. We frequently cut through their parking lots, passing within 100 feet of their front doors, to avoid street traffic. I thought my wife was kidding when she said she couldn't name the banks. She wasn't kidding. And we've driven through their parking lots one hundred times, at a minimum, in recent years.

Over the past few decades, banks have greatly improved their marketing within the four walls of their branches. On the outside, however, it's apparently still 1963. There's nothing to see here, folks, move along.

Branch awareness is something I've preached about to in-store bankers for going on 20 years. It's easy to sit in a spot and see 20,000 or more people a week in your store and think they see you as well. But they absolutely won't…unless you continually give them reason to pay attention to you.

And it's even easier for traditional branches to become part of a blurred background along customers' commutes – driving or walking.

One of the most basic tenets of running a successful retail business is making sure potential customers in your market know who you are, where you are and what you offer. Maybe that's just too basic a concept for busy bankers to pay attention to. And it too often shows (or doesn't show, actually.)

Branches still matter in customers' banking decisions. But your branches have to actually be on their radars to factor into those decisions. If customers are more likely to find you through an Internet search than by noting your actual existence along their commutes, well, good luck with that.

Is there even one thing new or different (lights, banners, balloons, window displays, garden gnomes… anything) on the outside of your branches from last week? Last month? Last year?

Don't fool yourself into thinking that having a "pretty building" is in itself effective marketing. The prettiest painting on a wall soon becomes as ignored as the others. That which is static becomes ignored.

How about putting someone in charge this year of making sure your branches act more as billboards than backdrops?

Dave Martin is an executive vice president and chief training consultant at NCBS, a SunTrust Banks Inc. subsidiary that offers consulting, training, design and construction services for retail banking programs. He can be reached at Dave.Martin@ncbs.com.

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Comments (4)
Couldn't agree more! Branches are just a channel.. albeit a rather ineffective sales channel and a service channel that is being discarded by consumers at alarmingly high rates. Perhaps consumers have determined that Branches offer little value, perhaps it is the staff inside of those branches that offer little value, perhaps the Bank provides little reason for consumers to visit? There is some truth to each of these "perhaps" but the reality is that Branches and associates costs account for 70%+ of a typical Bank's cost basis but generate little or no revenue / ROE.

Indeed, Banks - and particularly Community Banks - need to recognize that competing based on Branches and Branch location is a failed strategy. Growth and Profitability Require Competitive Differentiation and for the vast majority, the Strategy has little or nothing to do Branches.
Posted by Serge Milman | Optirate | Thursday, January 03 2013 at 1:23PM ET
Actually, the gist of this column is that while branches may no longer be the center of the banking universe for most consumers, they still have significant influence on who people choose to bank with. And if you are going to actually keep branches open, you should go the extra mile to make sure they are as conspicuous as possible.
Posted by My 2 Cents | Thursday, January 03 2013 at 8:07PM ET
The author certainly indicated that his wife wanted to "security" of having a nearby branch although her visits to the branch are less frequent than thunderstorms in the Sahara. At some point every Bank will need to rationalize the value of the branch vs the cost of the branch.

The reality is that Community Banks have little or no hope of getting noticed by consumers based on their branch locations... and trying to compete on the basis of zero differentiation / zero value to the consumer is ineffective and extremely expensive. Indeed, Community Banks must rethink their value proposition including their product design, pricing, channels, marketing strategy and customer focus to survive the next 3 - 5 years.
Posted by Serge Milman | Optirate | Friday, January 04 2013 at 11:28AM ET
Oh, just realized that you're one of those guys who attaches comments to self-promote, trying to get readers off of where they are and onto your site. Maybe submit your own column or run ads in American Banker instead of trying to glom their readers. I'm sure they'd appreciate it. Good luck.
Posted by My 2 Cents | Friday, January 04 2013 at 1:10PM ET
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