Bayer FCU Builds Branches To Be 'Always Within Reach'

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Bayer FCU, Elkhart, Ind., went years without building a branch, but in the last seven years it has gone on something of a branching binge, building 11 new branches as part of its strategy to live up to the motto "always within reach."

The key to effective branching: go beyond location, location, location-a very important aspect of branching to be sure - to include robust design and friendly, able staff. That, according to Bayer FCU CEO Dallas Bergl, is the key to raising the loyalty meter.

Bayer FCU didn't build its first branch until 1999, said CEO Dallas Bergl, but they now number 11. "We're coast to coast, but a little thin in the middle," he said. One of three credit unions that serves Bayer employees, BFCU serves the pharmaceutical and consumer drug segment (Alka-Seltzer and One-a-Day vitamins, and several hundred select employee groups). BFCU has six locations in Indiana and one each in Berkeley, Calif.; Clayton, N.C.; Morristown, N.J.; Orange, Conn.; and Tarrytown, N.Y.

In the early to mid-90s, Bergl said that like most people, he expected a big breakthrough from the Internet and BFCU put a lot of money into Net operations and "not much into branches. We expected the 'big touch,' but we learned a lesson," he said. While Net transactions went up as expected, so did the number of in branch transactions, which were expected to drop.

"People expect you to anticipate their needs in everything, even before they ask for it," said Bergl, trying to explain the mystery. Revising the strategy to include more branches brought BFCU out of the doldrums of growth and fear of being a merger target. "Our growth was flat before we stared branching. We were a $125-million credit union when we started in 1999, and without branching I'd say we'd have seen growth in the 2% to 3% level. This has brought us a new member base." BFCU now has $256 million in assets and 35,000 members.

With a motto of "Always within Reach" BFCU's strategy is to use all available channels to serve members and make the most of members' presence in branches with eye candy. The corporate location in Elkhart has large plasma TV screens that show home improvement channels in the lobby area (the DIY Network) and News and Sports Networks (CNN and ESPN) in the teller line area. Those programs are interrupted at intervals by a closed-circuit marketing piece about the credit union and/or a special promotion for a product or service, depending on the season. Each teller line also has a smaller flat screen TV that flashes video posters and about new services or promotions on existing ones.

"It's basically a PowerPoint presentation, so it's easy to change and we do that frequently," Bergl said. "The best part is that it is not costly to create and there is no shipping or mailing costs, and we present a consistent marketing message in all our branches."

Not all BFCU branches have these features yet (three are in plant locations), but they have committed $100,000 to retrofit all stand alone 'traditional branches' with the same bells and whistles.

The biggest revelation to its branching success was its impact on market presence. "Branches are akin to good will," Bergl said. "It's free advertising and great publicity for credit unions. I think most CUs are horrible at this: they just don't understand the importance of market placement. It conveys status and marks you as a financial market player."

Another important lesson Bergl said he gained by simply standing in the CU lobby and watching the action was the need for a Kids Corner. "I saw parents dragging their children around, trying to keep them quiet while they applied for a loan or did some business. The kids get restless because they're bored so parents want to hurry things along. But a Kids section with video games and toys will keep them happy, so Mom and Dad are happy. That's an opportunity to cross sell and serve them in some other way we'd lose otherwise."

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