As banks seek to develop a stronger sales culture in their branches, they are faced with a vexing paradox: many of their employees became bankers precisely because they didn't want to sell.

Not surprisingly, the desire to be more sales oriented has changed the way many banks hire, train, and reward employees.

Nowhere is that more evident than at supermarket branches. While consumers fill their carts with groceries, bank employees are presented with a vast market of both existing and potential customers.

"The market opportunity at a supermarket branch is so much different from the market opportunity you have at a traditional branch," said John LeCave, senior vice president and director of marketing at National Commerce Bancorp., which operates 60 full-service branches in Kroger supermarkets. And through its subsidiary, National Commerce Bank Services Inc., the Memphis-based bank also offers consulting services to other institutions that want to open grocery store offices.

Mr. LeCave said consumers usually enter a brick and mortar branch for a specific reason, such as conducting a transaction or applying for a loan. And new customers typically choose a branch because it is conveniently located or has been recommended to them.

"By the time the customer has crossed the threshold of that branch bank," said Mr. LeCave, "they've already made the determination to bank" there.

Supermarket branches present a different hurdle. People go there to shop, not bank. And they may wonder, he said, if the small office is a full-service bank or just a place to handle basic transactions.

"A very strong and effective sales culture and sales environment is necessary to overcome what the customer's perceptions or misperceptions might be," said Mr. LeCave.

It takes the right kind of bank employee to overcome that hurdle. National Commerce looks to hire people who fit a particular profile.

"We generally look at college graduates, we generally look at people who have been involved in sororities or fraternities," said Mr. LeCave. "We look at people who have had prior work experience. And we prefer that experience to be in customer-contact positions."

More generally, he said, National Commerce wants people who "enjoy being 'onstage,' enjoy working with people, that are outgoing, that are sociable, (and) that have prior leadership experience."

Mark Alpert, an analyst with Alex. Brown & Sons, said supermarket banking can be a successful strategy when the branches are staffed with "nice cheery young people who are willing to run down the vegetable aisles to schmooze with a shopper."

Joseph A. Stieven, an analyst with St. Louis-based Stifel, Nicolaus & Co. who calls National Commerce one of the best managed banks in the nation, wryly observed that its strategy involves keeping traditional bankers away from the branches. "What they do would embarrass pin-striped bankers."

But beyond being eager and energetic staff, the staff must also be well trained.

"We equip them with product training, with operations training, with sales training," said Mr. LeCave. "The way people approach those prospects is critically important to the success of that supermarket branch."

Rather than push products, National Commerce's supermarket employees are encouraged to develop relationships with customers over time. That's possible, he noted, because customers make numerous and regular visits to shop.

"You want to blend in to their pace, their situation," said Mr. LeCave, "and not be intrusive."

To hook customers, branches hold a variety of promotional events. "They will do things like customer appreciation days, tax savings days, financial counseling days, financial physical days, anniversary sales, special events like loan sales," said Mr. LeCave.

Employees also roam the aisles to engage consumers and watch customer buying patterns. A box of Pampers, for example, is a flag that the shopper has a child.

"You can make the jump, obviously, that if they've got young children, they are going to have long-term savings and investment needs," he said. "And they may have long-term credit needs."

National Commerce says the high-touch retailing approach has been successful, particularly in generating loan business. "Our loan-to-deposit ratio is north of 50% in the supermarket branch," said Mr. LeCave. "In the traditional branch, it runs around 15% to 20%."

National Commerce also said the response rate to direct mail promotions is 50% higher in supermarkets.

The growth of supermarket branches stands out at a time when many banks are looking for ways to cut costs by reducing the number of brick and mortar offices. Since 1989, the number of in-store branches has doubled to more than 2,000. National Commerce expects the number to reach 6,000 by the end of the century.

The bank's consulting arm has worked with 130 different banks and 60 supermarket chains.

Part of the attraction of supermarket offices can be gauged by back-of- the-envelope calculations. Supermarket branches cost about one-fifth as much to build as conventional ones, Mr. Stieven noted, and thus banks can reach the break-even point faster. Some National Commerce branches have garnered $20 million of deposits within 18 months, he said.

Mr. LeCave also noted the in-store branches, at about $200,000 each, can be a lower-cost way to enter growing suburban areas. Residential subdivisions precede commercial development, he noted, and banks typically wait to see how development progresses before building a new branch. "They don't want to go out there and leapfrog in the wrong location."

But the first commercial development in a growing area, he observed, is a shopping center anchored by a supermarket. "Those residents moving into those areas are looking for a place to conduct their banking," he added.

National Commerce said the success of supermarket branching also depends on closely tracking sales and profitability.

"We look at what we call critical outcome indicators - which is number of new accounts, deposits, and loans." said Mr. LeCave. "And then we look at diagnostic indicators which help you to diagnose the outcome indicators. That might be cross-selling, that might be store visitation, that might be (product announcements), that might be implementation."

The banking company generates more than 60 different reports to track performance of employees, branches, and products. Those numbers are matched against quarterly business plans developed by branch managers.

"They have financial goals they have to go achieve, they have marketing goals, they've got sales goals," said Mr. LeCave. "They break those responsibilities down by person, so that basically each day, each week, that person knows what their goals and objectives are. And they measure according to that. The bank offers five levels of incentives to reward performance.

"I find banks are looking for hot buttons," said Mr. LeCave. "They are looking for the right incentive program or the right training program. What is important in this is that you have to manage the entire system - all the variables - simultaneously.

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