SELLING IS THE PRIMARY FOCUS IN BRANCHES

Now that selling is the number one priority in branches today, the next step is to find one or more ways to bring more consumers into your branches on a daily basis.

Business as usual won't make this happen.

What's required is a significant change in marketing strategy supported throughout the institution.

Your ultimate goal should be to make visiting the branch a pleasant and productive experience that is rewarding to customers and prospects. Accomplishing this requires that you provide them with an experience they'll want to share with others.

After all, word-of-mouth or referrals are the single-most cost-effective way to get consumers inside your branches on an ongoing basis.

But before this happens, you have to find and implement a marketing strategy to get and hold the attention of residents around your branches.

At ACTON Marketing we've identified seven strategies to help make this happen.

THE SEVEN STRATEGIES

The seven strategies are:

1. Increase and refocus your marketing efforts
2. Reconfigure your branches to give them more of a retail look and feel
3. Identify a meaningful point of differentiation and focus on it
4. Partner with a local boutique retailer to share space
5. Hold special events
6. Use a variety of promotional activities
7. Create an experience

No matter which strategy, or some combination, you choose, it's critical that you always provide customers and prospects with valid reasons why they should want to come into your branch.

Remember, people are focused on the WIIFM or "What's in it for me?"

This is what immediately comes to a person's mind when confronted by a marketing message or sales call exhorting them to come into the branch for any reason.

You have to be able to answer this very important question every time – What's in it for me? Otherwise, your marketing and advertising messages will be ignored or discarded.

Of the seven strategies listed above, six of them depend on the first one which is your overall marketing strategy and yearly marketing plan.

INCREASE AND REFOCUS YOUR MARKETING EFFORTS

Your bank or credit union can have desirable products and services, low lending rates, higher rates paid on deposits, a genuine point of differentiation, highly-trained and friendly employees, branches that are fun to visit, a reputation for excellent customer service, and good locations. But if few consumers are aware of this, in the long run, none of it matters.

What matters is that you have, and execute, an effective, highly focused marketing strategy to communicate the "what's in it for me" to everyone living and working around your branches. Your annual marketing plan helps make this a reality.

In too many small-to-medium-sized banks and credit unions, marketing is looked upon as an expensive, necessary evil needed to compete with the big banks. Often, one person wears the marketing title – a person with little or no marketing background – and is given a small budget to spread the word throughout the year. The end result is usually a mish-mash of assorted marketing messages with no central theme or focus.

It's the du jour approach to marketing...and it doesn't work.

Generally, there are two possible outcomes here...

...One, the bank or credit union remains "invisible" in the market place.

...Two, customers and prospects are confused as to what the institution offers and why they should bank there.

You can validate this by simply thinking about all of the financial institutions in your own market.

The big banks spend a ton of money on marketing and are widely known. At the same time, some are much better at marketing than others. Yet most of them simply overwhelm the market with a constant stream of changing messages – the scattershot approach. Personally, since the demise of Washington Mutual with its consistent free checking message, I'm not aware of a big bank with a consistent, tightly-focused message.

The same is true of the growing number of regional banks. They spend a lot of money on marketing yet provide no overriding reason why consumers should choose to bank with them.

And then there are the large number of smaller community banks and credit unions spending much less money on a variety of ever-changing messages which are largely ineffective.

Whether you have a huge marketing budget or a small one, what's critical is that you identify your point of differentiation and devote your marketing dollars to communicating it consistently and frequently.

For smaller financial institutions with limited marketing budgets, applying a laser-like focus on one overriding marketing message consistently over time enables you to compete more effectively against the big banks.

Your ultimate marketing goal is to burn into the minds of your target audience the answer to the question, "What's in it for me?"

The remaining six strategies listed above depend on an effective marketing strategy to ensure their effectiveness.

If, today, your bank or credit union isn't generating sufficient branch traffic to meet your new accounts, share of wallet, market share, and cross-sell goals, then the first thing to examine is your existing marketing strategy and supporting marketing plans.

It might be time for a complete overhaul of your marketing strategy. Most likely, you'll need outside help to make this happen.

Before you consider hiring an expensive marketing consultant, try to find an excellent book on the subject.

While there are plenty of marketing books available to assist you, perhaps the best book on this topic was written by international marketing consultants Jack Trout and Al Ries and published in 1989, Bottom-Up Marketing.

Over many years of consulting with major corporations all over the world, the authors have discovered that the traditional "top down" approach to marketing planning is obsolete. What they've found works best is starting at the bottom and working up. According to Ries and Trout, "Strategy should be developed from the bottom up, not from the top down. Tactics should dictate strategies. That is, the communications tactic should dictate the marketing strategy. Find a tactic that will work. Then build the tactic into a strategy."

One example provided by the authors comes from Tom Monaghan, founder of Domino's Pizza. Monaghan's winning tactic was "home delivery of pizza in 30 minutes or less, guaranteed." From this one tactic, Monaghan was able to build Domino's into one of the nation's largest pizza chains. His entire marketing communications campaign was built around this one tactic.

Another excellent example of a single tactic that was used to create an effective marketing strategy to drive customers and prospects into the branch is free checking and a free gift. From this one big, tactical idea, a turnkey marketing strategy emerged that's been in use since 1982 and continues working today.

Unfortunately, a majority of free checking marketers fail to optimize their free checking program by allocating scarce marketing dollars to other product and service messages throughout the year.

Ask yourself, what one tactic could your bank or credit union identify that would enable you to develop an effective marketing strategy to drive greater numbers of customers and prospects into your branches?

The future of your financial institution depends on it.

Another traffic-building strategy being pursued by a handful of banks and credit unions is reconfiguring the branch to appear more like a fun, retail store.

RECONFIGURE YOUR BRANCHES

This entails remodeling your branches so they no longer resemble the typical boring, traditional branch with its velvet ropes and brass stanchions standing guard in front of the teller windows. The new branches take on a more retail-like appearance that has greater emotional appeal to both customers and prospects.

The goal is to bring in more consumers by creating a warm, friendly, environment featuring a variety of interactive options including big screen TVs, free coffee, access to free desk-top computers, and Wi-Fi. Management hopes that such branches ultimately create a buzz in the neighborhood resulting in more traffic.   

Leading the way in branch redesign is Umpqua Bank in Portland, Oregon. Unlike the folks at Washington Mutual who developed more of a cookie-cutter approach with its patented Occasio design, senior management at Umpqua designs each branch interior to fit the look and feel of the neighborhood in which it is located.

Umpqua's newest version of its one-of-a-kind branch opened in December 2009, in Northwest Portland. Referring to it as a "boutique" approach to store design, this neighborhood branch occupies only 1,500 square feet and can be built much faster than a traditional branch. Several photos of Umpqua's newest branch interior are available here.

Giving Umpqua Bank some strong competition in branch design, New York-based Visions Federal Credit Union has been introducing customized branches in its market areas for the past 12 years.

A branch resembling a lodge was opened in 1998 in a Pennsylvania community where fishing is popular. Another branch located in wine country resembles a winery. And a recently renovated branch in Binghamton, at University Plaza, targets Gen Y students at the nearby university. Included in the design is a Music Café with headsets hanging from the ceiling.

Still, over the past ten years very few financial institutions have jumped on the branch redesign bandwagon. The possible reasons are:

1. A lack of validated information on whether or not such retail designs actually draw more consumers inside the branch.

2. No proof that a majority of consumers prefer the retail look to the more traditional branch look and feel.

3. The cost of major branch remodels is significant.

4. In today's still struggling economy, most banks don't have the funds available to spend on expensive remodels. Many banks are still carrying a lot of bad loans on their books.

Should data begin to emerge that such redesigned branches attract many more walk-in customers, we are likely to witness a significant branch remodeling boom very quickly.

Only time will tell.

If you are currently waiting for validation, you might want to consider seeking a meaningful point of differentiation.

IDENTIFY A MEANINGFUL POINT OF DIFFERENTIATION

Following this strategy requires that you identify one or more meaningful points of differentiation that answers consumers' first question upon seeing your name, logo, branch, billboard, ad, or marketing piece: "What's in it for me?"

"Why should I come into your branch?"

Answering this question requires that your point of differentiation provides value of some sort.

Once you've identified how your bank or credit union will be meaningfully different, you must communicate this difference consistently over many years. In effect, you're building your brand.

One of the best, if not the best, examples of a financial institution differentiating itself is Commerce Bank in New Jersey, which is now known as TD Bank, having been acquired by Canada's Toronto-Dominion Bank in March 2008.

Using the tagline, "America's Most Convenient Bank," founder Vernon Hill delivered his "convenience" point of differentiation by...

1. Having branches open seven days a week.

2. Issuing ATM cards in the branch at the time a new checking account is opened.

3. Providing the branded "Penny Arcade" coin counting machines in every branch which are available to both customers and non-customers without a fee.

4. Ensuring employees provide excellent customer service through the bank's internal WOW program.

Owning the convenience point of differentiation was easy for Vernon Hill as he didn't have to completely revamp an existing bank's approach to business. You see, Hill founded his bank in Cherry Hill, New Jersey, in 1973, having previously been a very successful fast-food restaurant franchisee owner.

It was Hill's fast-food experience that enabled him to realize that what was sorely missing in the retail banking business was all-around convenience. Not only in hours and days open, but in instant issuance of ATM cards and free coin counting machines in every branch. Additionally, Hill put together an internal program to ensure that every employee provides excellent customer service. Other points of differentiation include no-fee Visa Gift Cards for customers and dog biscuits in every lobby and drive-up.

In effect, Hill approached branch banking more like a retailer and less like a bank. Growing from a single branch in 1973, to more than 435 branches by 2006, Hill's bank developed a cult-like following in the markets served.

While a growing number of banks and credit unions provide coin counters inside the branches, most resemble an ATM and require the coins counted be deposited directly into an account. And they are not available to non-customers.

Hill, on the other hand, took the coin counter idea, branded it, and marketed it primarily to young children as you can see in the two photos to the right in the sidebar. A step-by-step description of using the machine, complete with photos is available here. As you might expect, these counters appeal to adults as well and have become famous in the markets previously served by Commerce Bank.

Another idea for meaningful differentiation that comes to mind would be to refocus your credit union or bank to be the market leader for identify theft prevention. Along with offering a full range of products and services directed at identity theft prevention, each branch would offer daily shredding of documents for customers. Given some additional thought, this differentiating idea may have legs.

In all your planning, just ensure that you're providing answers to the burning question, "What's in it for me?"

Perhaps more consumers will be drawn to your branches if you share your sales space with another retailer.

PARTNER WITH A LOCAL RETAILER

This is exactly what Continental Bank, Chicago, did in the 1970s when it allowed a local businessman to operate a small specialty store in one corner of its huge, downtown branch. Appealing to the largest number of shoppers and workers in the downtown area, the owner sold tobacco and snack items, greeting cards, cold drinks, flowers, newspapers, and gifts. Having worked at the bank for over 13 years, your newsletter editor can attest to the traffic generated by this vendor.

While this was not a co-branding effort, it is a less costly approach to partnering with a local retailer in an effort to attract more walk-in traffic on a daily basis.

As mentioned in the August issue of this newsletter, two East coast banks are taking a partnering or co-branding approach in an effort to attract more consumers into their branches.

In October 2009, Capital One partnered with Starbucks to open a co-branded branch in Manhattan while Citizens Bank opened a branch inside a local Dunkin' Donuts store in Bellingham, Massachusetts. Links to articles on both co-branded efforts are available in the sidebar to the right.

While there's no reason to believe these efforts shouldn't succeed, only time will tell if these banks benefit from their co-branding efforts with famous retail brands.

At a minimum they both deserve credit for thinking outside the box.

While opening co-branded branches can be costly and time-consuming, there are other less-costly approaches to driving more traffic into your branches.

HOLD SPECIAL EVENTS

Use your bank's branch network to hold events of interest to community residents.

Get started by establishing a moving 12-month events calendar and scheduling a special event every month. Examples of events include:

• Exhibiting the art of local artists
• Community history month
• Breast cancer awareness
• Identity theft prevention including on-site document shredding
• Youth banking with a focus on financial awareness and education
• Ways to save money while helping the environment by going Green
• Book appreciation and the joy of reading
• Clean up the community activities
• Support the local grade schools

This is the community outreach strategy which supports your corporate halo.

One option worth testing is partnering with local charities and varying them throughout the year to appeal to a larger audience. Since most charities have a dedicated support group, this should help spread the word about your events and bring more consumers into your branches.

Remember to develop an aggressive marketing campaign to promote these events beyond your existing customer base. Space ads in the local newspaper and billboards are two channels worth exploring.

And don't forget about the significant PR opportunities here. Your local radio, television, and newspapers love to report on stories involving local community activities. Make them partners in your community outreach strategy.

USE INTERACTIVE PROMOTIONAL ACTIVITIES

Almost everybody loves the idea of winning something of value. The proof of this is evident by the growing number of American Indian casinos and the hoards of people routinely visiting them.

There's no reason why your bank can't adopt a similar strategy to bringing more people into your branches. And unlike the casinos, consumers don't have to spend money to participate in your fun activities.

Here are just three of the interactive promotions available:

• Key to a new car. Here you send a mailer containing a key to residents living around your branches. An individual is invited to bring in the key to see if it fits the door lock on the new car. If you can't get a new car into your lobby, you can substitute a padlock on a display showing a photograph of the new car. This event is an opportunity to promote new and used vehicle loans.

• Key that opens the treasure chest. Again, you send a mailer containing a key to residents living around your branches. They must come into your branch to see if the keys fit the lock on the treasure chest. Inside is $10,000 in play money to symbolize the $10,000 savings account you'll open in the winner's name. You can use this event to promote deposit products.

• A secret number that wins the grand prize. With this promotion, you send a postcard containing a secret number hidden behind a peel-off tab. Recipients must bring the postcard into your branch to see if it matches one of the secret numbers on the display board. You have the option of offering a variety of gifts including free safe deposit boxes for a year, savings accounts with an opening balance of $100 to $1,000, rate discounts on loans, and similar financial products.

Should you elect to experiment with these interactive promotions, it's important that you decorate your branches to create a fun, festive atmosphere that puts your branch visitors in the proper mood for a selling experience.

Generally, bank and credit union branches are cold, boring, impersonal places with an absence of laughter and visual stimuli. Your goal with interactive promotions is to change this atmosphere – making your branches fun places to visit.

At least one retailer has reached the pinnacle of being a fun place to visit as you'll discover in the next strategy.

CREATE A MEMORABLE EXPERIENCE

While your newsletter editor has never had the good fortune to shop for groceries at Stew Leonard's in Connecticut, from all that I've read about this place over the years, it is quite a memorable experience.

Given a choice, I'd easily select Stew Leonard's for my next vacation destination. In fact, a writer for the New York Times called it the "Disneyland of Dairy Stores" because of its petting zoos, costumed characters throughout the parking lot and store, regularly scheduled entertainment, and animatronics throughout each store. Click here for photos and a brief history.

But entertainment alone won't keep customers coming back time and again. Fortunately, the Leonard family is passionate about customer service. Helping deliver this high level of service is a dedicated staff of employees who are passionate about their work. In fact, Stew Leonard's has made Fortune magazine's 100 Best Companies to Work For over the past nine years.

Founded in 1969 as a small dairy store, Stew Leonard's has quickly grown to become the world's largest dairy store and best performing grocery store in America. Headquartered in Norwalk, Connecticut, it has stores in Danbury, Newington, and Yonkers, New York. It remains family-owned and operated today.

Has creating a memorable shopping experience paid off?

In 1992, Stew Leonard's was recognized in The Guinness Book of World Records for having the greatest sales per unit area of any single food store in the United States. And management guru and author Tom Peters has featured Stew Leonard's in two of his books.

Whole Foods is another example of a grocery store providing a memorable shopping experience – albeit differently than Stew Leonard's. Upon entering a Whole Foods store you aren't sure if you are in a restaurant, café, fast food joint, coffee shop, or upscale grocery store. In fact, you are experiencing all this and more upon each visit.

About now you're probably thinking that while this can work for a grocery store, it could never work for bank and credit union branches. But don't tell that to the folks at Umpqua Bank in Portland, Oregon. They've been pursuing the same goal since 2000, but at a much slower, more deliberate pace.

Remember the excitement the first time you entered a noisy gaming room full of assorted machines occupied by eager players? The sights and sounds were mesmerizing. Now imagine something similar at your local bank branch. The branch, too, is full of assorted machines and terminals – but machines and terminals of a different kind.

Inside the branch is a coin counter like those inside TD Bank branches. It makes a clanging sound and lights flash as coins are counted. Accompanying the coin counter are computer terminals providing a variety of education and entertainment options. There's an online game teaching children about the value of saving money. Adults can be seen at other terminals testing their skills at money management and investing. With today's technology, there's no limit to the possibilities for providing entertainment tied to financial education inside branches.

Supporting this effort is an array of branched merchandise including your bank or credit union mascot – like Hubert the Lion at Harris Bank in Chicago.

Bottom line, consumers today like to be entertained when they shop. And they reward those businesses that entertain them by visiting regularly while telling all their friends, co-workers, and family members about their experiences.

If you're looking for ways to bring more customers and prospects into your branches, consider providing them with a memorable experience.

DEVELOP YOUR ACTION PLAN

Assuming your financial institution is looking for ways to bring more customers and prospects into your branches, you now have seven viable strategies to consider. While not an exhaustive list, they represent your options from easy to difficult and less costly to very costly.

Once you have senior management approval to move forward and develop a recommendation, the next step would be to create an employee committee to review the seven strategies presented above, adding any additional strategies you feel apply.

Once you've identified your complete list of strategies, the next step might consist of some primary market research to determine consumer preferences.

Next, you can prioritize your strategies based on a scoring algorithm consisting of a number of factors including cost, budget availability, fit with markets served, fit with your brand, customer preference rankings, and projected traffic increases.

Once you've prioritized your list of strategies, it's much easier to decide which strategies to pursue further. The goal here is to winnow your choices to the top two or three so your team can move forward with a more in-depth analysis of each one.

At some point during the in-depth analysis stage, members of the team may want to visit Stew Leonard's, a Whole Foods store, Umpqua and TD Bank branches, and the co-branded branches on the East Coast. There's nothing better than bringing first-hand experience to the table when discussing the strategies on your final list.

Ultimately, the more information you have to consider, the better your chances of making the best decision for your bank or credit union.

And during your discussions and negotiations, keep in mind the one question on every consumer's mind – What's in it for me?