FITCHBURG, Wis. — Summit CU remodeled its branch here in early 2013 as part of a move to "inspire" members to dream more, and the project appears to have paid off.
Kim Sponem, CEO at the $2 billion CU, told Credit Union Journal recently that loan volumes at the "Inspiration Branch" are up by almost 5% over this time last year, while member growth at the branch has soared by 20% — after negative growth the previous year — and deposit growth has also risen by 5%.
The branch uses sets and scenery such as beach scenes, the Leaning Tower of Pisa, a replica of an airplane, a traditional English pub, a cross-section of a home and more to help members think about how the CU can help them better their lives and achieve their dreams.
When Sponem initially told CU Journal about the branch early last year, she indicated that the sets might be swapped out every 12 to 18 months in order to keep things fresh, but she said that nearly a year and a half into the project that "the novelty hasn't worn off."
"We don't feel the need to swap anything out right now," she said. "Members are still very engaged with it — they just love to visit it.... We're finding it's a little bit less about needing to swap things out and it's really more of a destination. Kind of in the same way that Disney doesn't swap things out very often."
The branch also continues to be a community draw, added Sponem, with various business and groups visiting the branch.
Mortgages Lead The Way
Sponem was hesitant to credit all of the CU's growth to the unusual branch, but said that it certainly hasn't hurt things. One element that also hasn't hurt is that the bulk of the growth is coming from mortgages.
While Summit has not expanded the concept to any full-size branches, it did mimic the "Inspiration Branch" strategy at a small branch that opened in November specifically to offer home loans. Summit has one other home loan branch — that one is not modeled on this concept — but Sponem said that it was too soon to compare the two or draw any conclusions about how the inspiration concept might be impacting business. Additionally, Summit did not have any presence or name recognition in the area where the new home loan branch was opened.
Sponem stressed that the "Inspiration Branch" concept is still very much a work in process.
"[I]t takes time to evaluate whether a pilot is what I would deem as successful or not."
A survey conducted several months after the first branch opened found that more than 71% of members polled loved the branch, whereas 16% didn't care for it and 13% were unsure.
"I thought those results were really solid in terms of what I think you need to expect when you innovate," said Sponem. "When an organization that has an innovation is trying to please everyone, then it's not really innovation. If it's looking for 100% love, it's not really an innovation. It's not unique enough, it's not different enough; it's just more of what people expect."
She called the survey results "a testament that we stretched the concept and really did something different."
While the "Inspiration Branch" is unique, noted Andrea Simler-DeGolier, retail design and development at Cincinnati-based design firm DEI, Summit's efforts to go beyond the traditional branch model is also part of a larger shift in the financial services industry toward turning FIs into more traditional retail environments.
"[T]here is definitely a question in people's minds of how are we going to differentiate ourselves from the competition when everybody was looking very homogenized," said Simler-DeGolier. The retail industry is "what the financial industry is competing with. Everywhere that we look nowadays, it's all about the best of the best and beautiful spaces and comfortable spaces. You look at the hospitality industry, healthcare, retail — everything is based around having a comfortable, well-planned space."
Sponem emphasized that the "Inspiration Branch" concept won't work for every CU, but should be aligned with a specific strategy. Summit's strategy is based around helping members recognize and achieve their dreams. Similarly, Simler-DeGolier said that all branch design must be based around the institution's strategic plan.
Simler-DeGolier said that despite Summit's success with the branch, she is not aware of any studies connecting design elements to improved financial performance. DEI has seen some anecdotal evidence of that, but nothing that can be said to be industry-wide. If anything, she said, the shrinking credit union landscape is resulting in many CUs creating prototypes "based on their brand, and that prototype layers into all of their branch network so they have a uniform look and feel."
A design concept that hones in on the credit union's brand is crucial, she stressed, but it's also important "to look outside of the financial industry from a client perspective and really look at what's going on and what is appealing in the retail and hospitality environment. All of those elements work together to drive you to what your demographic will accept or not accept."
