Getting More Out of Less

A recent article in American Banker by Harry Terris raised my eyebrow. Every now and then you come upon a piece of information that suggests a turning (or tipping) point has been reached.

For the third year in a row, the number of bank branches per household in the US has fallen. That’s not an inconsequential piece of information. I was reminded of the saying, “Once is an accident, twice is a coincidence, three times is a trend.”

Ah, so branches are doomed and will begin being shuttered en masse, right? Eh, not quite. If we’ve learned anything through the decades, it’s that our industry doesn’t exactly pivot on a dime.

That said, I do think we’re seeing the end of the “more new branches equals more market share” axiom.

I think we’re also beginning to see the expansion of the physical geography each bank branch will be called upon (and able) to serve. Few institutions have branches literally stacked upon each other.

A common complaint I’ve heard from bankers in the past is that they don’t have the branch density in some of their markets to ably compete. Well, the necessary density is beginning to change.

Some might accuse me of being Pollyannaish, but I suggest to folks running and working in existing branches that their individual branch could possibly become more important, not less. But their jobs will evolve accordingly.

Falling transaction counts aside, the biggest challenge we face is that more and more customers do not look to “shop” or educate themselves about banking products in a branch. You may have a wealth of information and be a customer service force-of-nature.

That’s of little use when folks have less and less need to ever be in the same building with you.

For some time now, I’ve preached the seemingly contradictory message that the best way to increase the value of branches is to get out of the branches. If you’re in an in-store, it may be a short walk. If in a brick-and-mortar, it’s a longer walk or drive.

But make no mistake about it. The bankers who will succeed going forward are those who do the best job at remaining relevant by engaging customers where they live, work, shop, and play.

Branches are going to be expected to “cover more ground.” We need to personally cover more ground by getting out there and “pressing the flesh.”

How much ground will you cover today?
 

Stepping Out of Line

During a conversation with several regional managers recently, one made a comment about lines at their teller windows that made me smile and reflect back to my first days in banking.

After only a few days of training in a brick and mortar branch, I was convinced that the greatest fear of bankers had to be lines in their lobbies.

It may have been driven by all the surveys and studies pushed on them about how customers’ perceptions of their service were directly tied to how long they waited in line to see a teller. And don’t get me wrong, wait times do matter.

I do remember, however, laughing about the fact that my goal in life for my soon-to-be-opened in-store branch was to actually have long lines. I saw lines as a signal that we must have something worth standing in line for- and maybe even a great marketing message.

(I also soon learned to keep those kinds of heretical thoughts to myself.)

My feelings have always been that wait-times matter less than the experience a customer eventually receives. A short line for poor or indifferent service isn’t much of a value proposition.

Also, it’s hard to uncover new opportunities when you’re focused more on people standing in a line than to the person directly in front of you. But the same person who may be a bit aggravated waiting for a few minutes in a line walks away pleased if his eventual interaction with a banker is a pleasant one.

That came flashing back to me when this regional manager shared that he often reminds his teams (paraphrasing) “That customer chose to stand in a line today. We provide him with and promote many easy alternatives to handle his transaction that doesn’t involve standing in a line. We’re thrilled to have him as a customer and want to always show that. But he chose the line.”

My new friend’s point was that he has to remind his teams that dropping everything on their plate (outbound calls, coaching sessions, etc.) every time a line grew to 3 people wasn’t a winning strategy.

He stressed that you definitely don’t want to ignore when true “all hands on deck” situations arise.

But it’s hard to believe that sales efforts and banker development are priorities when they’re the first things abandoned in a (real or imagined) pinch.

Where are your team’s priorities this week?