I made a statement to a branch manager group recently that gave me a feeling of déjà vu.
While discussing strategy changes banks are making with their branch networks, I suggested that in order to “save your branches,” bankers need to more regularly leave their branches.
I am not suggesting that all branches are in peril. However, I do believe that the branch landscape is going to be shaken up over the next few years, and at an accelerating pace.
As customer patterns and preferences evolve — and the viable service area of each branch expands — branch networks will evolve as well. Certain branches will survive and thrive, while others in the same markets may not be long for this world.
Furthermore, one of the driving factors in some branches succeeding where others fail is not on enough bankers’ radars. Whether a branch succeeds or fails will not be entirely based on its design, technology or even location.
Those things are important. But branches will succeed or fail because of the activity or inactivity of their bankers.
The déjà vu I had was to a time more than a decade ago, when I first found myself preaching a similar message to in-store locations. It was relatively common to find branches inside stores with very high traffic seemingly unable to grow businesses.
I’d often find in-store branch cynics at some institutions stating that fact as proof that in-store locations were not viable.
How was it that they could provide the most convenient branch possible for thousands of people shopping a store each week, and yet not have customers lined up at the counters?
The point I made time and time again was that the thousands of shoppers inside of the stores were not actively shopping for what their branches offered. People shopped a grocery store because they were running low on groceries.
Customers did not run out of, or run low on, their current banks.
Many of these locations had well-trained and competent employees. The problem was they were usually behind teller lines or sitting in those small offices.
They had a traditional branch mindset and sales approach being attempted in a nontraditional, retail setting. In-store bankers were typically more than capable of explaining why their branches were the best choice for shoppers.
Unfortunately, those conversations were not happening nearly as often as they should.
One of the questions I began asking folks was simply, “How many people did you speak with today who don’t already bank with you?”
That one piece of information typically told me all I needed to know about why most branches were underperforming.
When bankers stepped out from the branch and simply interacted with people, they became relevant to shoppers and their productivity increased.
The most surprising thing to bankers was that their most productive conversations didn’t sound anything like a sales pitch. Simply stepping out and making new acquaintances and friends exponentially raised customers’ awareness and interest in these banks.
I’ve shared in presentations for some time that the banking industry is becoming more in-store-like each year. All branches are not moving into retail spaces. However, branches are becoming physically smaller. A three-teller window branch is no longer considered small.
The employee headcounts in most branches are fast approaching in-store branch levels, as well.
Above all, branch teams are increasingly asked to be proactive in initiating conversations and fostering relationships outside the walls of a branch.
There is a night-and-day difference in a potential customers’ view of a bank if they’ve actually had face-to-face interactions with one of its bankers.
The same branch a customer may have walked or driven by a thousand times takes on a different level of awareness once the customer associates it with an actual, friendly banker.
A face-to-face interaction and personal invitation to visit with a banker in a nearby branch tends to have far more impact than any marketing or branding exercise.
In an increasingly technology-driven industry, the quality of the bankers in branches matters more, not less. They will remain our last true differentiators.
Bankers cannot differentiate, however, if potential customers simply never interact with them.
Buildings may not distinguish one bank from another, but people do. Make sure yours are out and interacting in the communities you hope to serve.
