Make the most of bricks and mortar

Northwestern Financial Review, Aug 15-Aug 31, 2004 by Dunphy, Mike

Branching Basics

Today, customers increasingly view financial products as commodities, and the banks that deliver them, as stores. This means banks, community banks in particular, need to find other ways to differentiate themselves without focusing solely on product. For many, this means using their branches as a statement of their brand, like a traditional retailer.

The branch is a powerful tool for delivering brand experience. The retail storefront is an opportunity to present the visual and cultural aspects of your brand. It's the element of the brand story most likely to influence public opinions - either positively or negatively. Until recently, the branch has been a service center, a place for transactions. Now, it needs to be something more.

Consider the impressions that the physical facility makes on customers. The branch is the bank's public face. If the carpet is tired and the windows are dirty, what message does that send? If it's difficult to find information or the right person to talk to, how will that be reflected in the buying decision? These critical impressions will shape a customer's view of the institution and may well influence whether they choose you as an advisor for their important life decisions.

There are both big picture and immediate steps banks can take to present and reinforce the public image and make the branch customerfriendly. On the larger scale, a well-planned retail merchandising system may be the only common visual theme across an otherwise disparate branch network. With proper placement and layering, you can deliver simple, consistent and easily understood messaging to create awareness of current offerings. This is particularly important with non-traditional services like investments and insurance since many customers still don't know these services are available at banks.

Merchandising is critical to the educational process. Most customers prefer to educate themselves about financial products that can be confusing and even intimidating. Armed with the basics, they're more comfortable approaching bank staff. It is a commonly held truth that the educator gets the business, and if customers can't find information about your services, they may well seek out the answers elsewhere.

Clear and understandable way-finding signage is also important. Make it easy for customers to find information they need. It's frustrating for customers and staff alike to waste time searching for the right person to talk to. This concern can be eliminated or reduced with signs that point people in the right direction and designate staff capabilities.

In the immediate term, there are several simple steps any bank can take to dress up their public face and project an image of success, professionalism and stability. It is critical to view the branches from the perspective of a new customer, experiencing the branch for the first time.

Customer Contact Points. Critical impression points include entries, drive-ups and ATMs. At each, you can create a clean, welcoming, professional presentation. This can be as simple as cleaning the glass, removing old stickers and promotional items, and making sure that required postings like hours, holidays and contact information are neatly and consistently presented.

Trading Branches. A fun way to create staff buy-in and deliver a fresh perspective is to hold a seminar on retail best practices - what the bank wants to do, and not do, in the branches. Then, have staff switch branches for a day, and ask them to report their findings back to the group. Combine the suggestions and create a plan to improve the retail presentation for customers. Maintain the momentum by sending out teams of staffers to execute the changes.

Shopping the Competition. Sometimes it's easier to see what looks good and bad by visiting other banks. You'll notice the clutter of cords and doggie biscuits at the driveup, or the collage of notices taped all over the teller line more clearly when you are in a new, unfamiliar environment. Take what you learn and look again at your own branches.

Remember, the branch is a store, in the same way that the Gap or Starbucks are stores. These retailing companies study all the points where customers interact with the brand. The tactical approach inside the bank may be different, but the lesson is the same. Customers draw conclusions about your company based on what they see. With constantly increasing competition, it's critically important that you reinforce your positive brand message at every opportunity.

Mike Dunphy is a partner with Semaphore, Inc., a retail consulting and merchandising design firm in Holliston, Mass.

Contact: MikeDunphy@Sema4inc.com.