Yes, there is such a thing as overbranding, and as credit unions strive to have a consistent look and feel from branch to branch and touchpoint to touchpoint, they could learn what some large retail chains have already discovered: cookie-cutter approaches don't always fly.
"You can overbrand. If you try to be a McDonald's in every market, it's not going to work," said Paul Siebert of Emick, Howard & Siebert, Seattle. "Unless, of course, you're Starbucks."
But even chains like McDonald's and Starbucks, which have prided themselves on consistency in the quality of their products and retail delivery, have backed away from "branch-in-the-box" production.
"In some cases, they've been forced to because of the evolution of building codes in cities across the country," Siebert explained. "Communities wanted to be unique, they didn't want to look like every other town."
A perfect example: in Delray Beach, Fla., the McDonald's restaurant is lacking its trademark red roof over brick walls. Instead, the fast-food place sports a more tropical look, with Mediterranean barrel tile on the roof over pale beige walls.
"There's a huge value proposition in having a consistent look and feel, in people recognizing who you are when they drive by," said Connie Lyle of KDA Holdings, Inc. "But you don't want to be cookie cutter; you want your branch to play to consumers in that area."
To achieve this balance between consistency and customization, credit unions should work with their facilities consultants to create a prototype branch with a variety of elements that can be switched out depending on its location as well as certain elements that get carried through from branch to branch.
"This is our kit of retail branding parts, our retail branding tools," Siebert suggested. "Now, look at how we can make a specific connection to this unique community."
When moving into a new community, it's important for a credit union to "match" the new community-but this has to go far beyond the design of the branch, noted Ralph LaMacchia of LaMacchia Group, who suggested there must be a deeper alignment for this move to work.
"We are working with one institution that is moving into a rapidly growing resort community," LaMacchia related. "They need to look 'North Woodsie' and look like they have been there for a while; as we also need to be sensitive to the local folks. This is related to design, merchandising, images, etc. Generally, climate also plays a large role, as do ethnically different areas. For example: if you don't speak Spanish, nor does anybody in your credit union, building a Mexican hacienda style branch in a Mexican neighborhood won't necessarily get you business."
While convenience is king, and one key to providing greater convenience is having many branches, there is an advantage that credit unions have as a result of their branch networks being smaller.
"Credit unions have a small enough network that they can really delve into their demographics and really tailor their branches to those neighborhoods," suggested Bill Bily of DEI, Cincinnati. "That means their brand promises become more relevant, more sincere. When you get to be too generic, you lose your sincerity. Your ability to touch the consumer falls off because you're speaking to the masses."
And the masses know it-and in some cases may resent it, especially in an area that's experienced a number of mergers. "The whole [financial] industry is at a crossroads. Larger financial institutions are coming in and taking over certain markets," Bily noted. "As they've become more global , their demographics have gotten more homogeneous, losing any appeal they might once have had for a specific community."
Even giants can overcome this problem by getting back in touch with a certain amount of customization. "Look at Nike. They have created several subbrands under the swoosh," he observed. "Nike realized you can't talk to a mountain biker the same way as a basketball player. Each sport has its own culture, and Nike has found a way to reach out to all of them."
Even within the same city, credit unions may discover that each of its branches is driven by something slightly different-product mix is a perfect example.
"We try to help guide clients to the types of products and services that can drive the messaging," counseled KDA's Will Klein. "For example, we might find that on the north side of the community there are more older people who want investments and deposits, while on the east side you have younger people who are buying first homes. The branch should offer all products and services, but it should designed to promote the products and services that most appeal to that community, or that part of the community."
It is all part of a trend toward more strategic thinking before deploying a branch, the experts agreed. "It used to be that the board-or even just a particular member of the board-wanted a branch in their area," recalled DEI Imagineer Cynthia Grow. "They didn't care about deposits in that area, they didn't look at the potential loan volume. Now, credit unions are looking at where they've been and where they are going-and they look at where the community is going-before placing a branch."
Another branching strategy that is going by the wayside: mirroring the competition. "Some credit unions had put branches in on a defensive basis," noted HBE's Paul Barrath. "If they saw Bank of America or some other competitor open a branch in one area, the credit union had to put one near it, too. Part of their demographic analysis also has to look at whether they may need to consolidate some of those branches, particularly if the market has changed."
While there are many factors that have to be taken into consideration when designing a credit union branch, at the end of the day, LaMacchia suggested, it still comes back to the basics.
"When we take credit unions into new communities, we ask, 'Are we customizing certain branches for these members?'" he offered. "When we are looking into a new market or community and we have no members there, this is a de novo charter for all intents and purposes, the answer is yes. At that point we have a wide spectrum of issues to work through, not just the facility.
"If we're moving into an area where we already have some members, or we're coming in with a base or merging a credit union, each of these are very different situations," LaMacchia continued. "What we need to remember is what got us to where we are-our basics. If you get too far away from the fundamentals, you'll find that you're going to encounter growing or changing pains; it may or may not work."
