What Do People Want in Branches?
The concept of a member-centric branch is the simple part-viewing the branch from the perspective of the member, rather than by product or distribution channel. Where the difficulty arises for many credit unions is in the execution.
Three speakers led a panel discussion on member-centric branch design at the recent CUNA Operations, Sales and Service Council conference here: Shawn Pond, senior vice president of IBT (International Banking Technologies); Marc Healy, director of member solutions for BECU, and Dave Willis, senior vice president and chief operating officer for Kitsap Community FCU.
Both BECU and Kitsap are clients of IBT. The Benicia, Calif.-based company has consulted with credit unions on branch design and building since 1984.
To build a branch that truly is member-centric, a credit union must begin with an in-depth knowledge of its members, according to Pond. Two questions must be answered: Whom do we want to serve at this branch? And what are the demographics, aspirations, lifestyles and life stages characteristics of these segments?
"Developing this knowledge is the foundation for finding ways to make the branch member-centric," he said.
Segmentation analysis can predict by lifestyle, income and age which products members and potential members are likely to use, Pond continued. This helps validate assumptions about the location and mission of a branch.
Also, research helps shape the decisions about the offerings, format, operation and appearance of a branch. "I don't believe we can separate operation of a branch and its appearance," Pond declared. "What works at one branch might not work at another. Treat each branch as an individual."
Five Key Features
According to Pond, members want five things from a branch experience: they want it to be easy to understand, easy to "get it done," interesting and/or unique, fun/comfortable/cool, and they don't want to be lied to.
The first two are easiest to deliver, he said. Clear signage directs people to where they need to go and will let them know all the functions they can do at a particular branch. In the case of a supermarket branch, let members know they can apply for loans, if applicable.
Easy to get it done means placing branches inside locations people already are going, such as markets. "That way, people don't have to get out of their cars twice to get their chores done," he said.
Some credit unions are devoting branch space to teaching people how to use online banking. "Think about how to make things easier for members," urged Pond.
Kitsap's Willis said Pond's point regarding something working at one branch but not at another was important to the discussion.
"We do a significant marketing study at each potential location," he said. "Market branches are all about convenience, not full service. Some people want a traditional set up and aren't ready for much change."
Pond pointed out some CUs are making fundamental changes to their teller lines, the flow of the entry lobby and even their desks. He said many credit unions have chairs on the same side of the desk rather than having members sit across from employees. "This says: 'We're working together on this to figure things out. We're not adversarial."
Finally, Pond said "don't lie to me" means a branch facility should not make a promise it cannot follow up operationally. For example, if a CU has a large concierge desk when members walk in the door, it must be properly staffed or it loses its purpose.
BECU's Healy said six years ago the former Boeing Employee's CU had two traditional branches to serve its members, both near Boeing plant locations in the greater Seattle area. Management wanted to serve existing members better and began opening branches in grocery stores. "We had a branch explosion two years in a row," he said. "We opened nine remote locations in 2003 and 18 in 2004."
Healy said BECU still has its two traditional branches, and is up to 34 in-store branches. He said they usually are staffed by one manager and three "consultants." The employees at the market locations are chosen for their retail-oriented skills.
"These remote locations have proven very successful for us. Before expansion, we were at $3-billion in assets. Now, we are at $5-billion. The in-store branches have played a significant role in that."
Bremerton, Wash.-based Kitsap Community converted to a community charter several years ago, and Willis said its branching strategy is to put a branch in a community where it fits with the community.
"We consider the number of households, potential market share and other factors before we invest the time and money," he said.
Willis offered two warnings when it comes to building branches: don't use a cookie cutter, and continue to survey the membership to make sure the branch is meeting expectations.
"Always test the profitability or ROI of a branch, including the number of hours each branch is open. Determine if the branch is doing more transactions by staying open two hours later on Saturday, or if it is the name number of transactions spread out over a longer time."