Over the past decade, banking at the branch level has changed and the signs are everywhere. Large regional banks as well as local community banks across the US are closing branches and cutting back on their branch staffing. And the latest sign that banking has changed is the introduction of the so-called “Universal Banker” staffing model that establishes a multipurpose branch position that combines a sales-oriented teller with the customer service role.
All of these changes are reactions to the drastic decline in branch customer traffic. Fewer Americans are setting foot in bank branches these days, opting to conduct transactions with self-help mobile apps or ATM's. More on-line banking companies are springing up every day to continue the drain on branch customers. Banking customer demographics and their preferred channels of banking are undergoing significant changes. Brick and mortar branches are losing as technology continues to impact their service delivery and revenue generation tactics and strategies.
Downsize or Change
Banks for years have realized that the branch banking world was changing. And in typical banking fashion, a lot of them have waited patiently to see if that trend would self-correct. Now that is apparent that this trend is going to stick around for a while, banks are starting to take their traditional action…downsizing. When branch revenue is being squeezed, typically banks downsize by cutting expenses, staffing and facilities. But as Tom Peters, noted author was fond of saying… “You can’t shrink yourself to greatness.” In other words, reducing branch staffing, hours, locations and expenses will only get the branches so far. To truly resolve this challenge, banks must totally change their customer sales approach.
One & Done
The branch problem isn’t that customers aren’t coming into the branches. They are but they are only coming in once! 85% of financial products like checking accounts, loans, individual retirement accounts and other types of financial investments are still purchased by customers coming into the branch. But Over 80% of a retail banking customer’s interactions now take place through self-service channels. So to buy the bank product initially, customers are coming into the branch but after that purchase, they are using electronic devices or apps (ATMs and online banking) to avoid setting foot back in the branch! So in branch sales it’s “One & Done” …customer meets branch sales staff one time to open an account then they are done with that relationship until the customer wants to buy another bank product or service. How do banks typically react to “One & Done?” They ask their branch staff to “cross-sell” other services when they have a “live” customer in the branch. Unfortunately over the years, this whole “cross-selling” approach has resulted in only minimal additional branch sales and revenue growth.
Change The Sales Approach
Over the past decade banks have been trying to find the key to selling more bank services during these “One & Done” encounters with very little success. But few have made any attempt to totally change their sales approach.
Here’s a thought…if you know you’re only going to have one shot with your customer in the branch and then the rest of their interactions will be through electronic devise and apps… why not figure out how the branch staff can engage the customer using the same channels? In other words, continue to follow-up with the customer to provide “insider” help and advice. If over 80% of retail banking customer’s interactions now takes place through self-service electronic channels, why shouldn’t the branch staff utilize that channel to provide tips and techniques on how to use that on-line service better? In other words, let the branch staff reach out to their customers on-line to help them avoid coming into the branches…until they need help.
Let’s face it, more and more bank customers are going to use on-line “self-help” banking services and fewer and fewer of them will come into the branches. That’s a given! Banks have two choices…they can either try to ignore this trend and hope it goes away or they can make some fundamental changes to how they approach sales in the branches and take advantage of it. So what choice is your bank making?
For more ideas on how to take full advantage of this new bank sales approach, contact me at firstname.lastname@example.org