Know Your Community’s Triangle

By Mark Gibson

Does your bank pass the “save our triangle” test?

Ask a community bank leader what makes his or her organization special, and you will often hear:

“We deliver great personal service, we take care of our customers, and we are committed to our local communities.”

While you have to wonder about the uniqueness of this value proposition, what I want to address today is more fundamental: Are we living up to that promise?

The question calls to mind a controversy in my own community—let’s call it the “triangle debacle.” I live in Homewood, Alabama during part of the year. It is a beautiful bucolic suburb of Birmingham. Recently, city engineers decided that the small landscaped triangle pictured above was more trouble than it was worth, and proposed paving over it. Local residents mounted a boisterous campaign at City Hall to “Save Our Triangle,” and so far, they have prevailed. But what does this have to do with banking? Quite a bit, actually.

To deliver great service, take care of your customers, or serve your communities, you first need to know what is important to them.

Based on my observations in 34 years of either consulting with community bank executives or serving as one, I have seen many who would receive a “Needs Improvement” score in this category. Examples shed light on what I mean.

A month ago, I was visiting with a community bank CEO, and she was lamenting that the bank had experienced significant attrition of its most profitable customers when it instituted a $5 a month paper statement fee. “But we gave them the alternative of free e-statements and there were lots of ways they could have avoided the fee!” she observed.

Don’t get me wrong. I like fee income as much as any banker. The point is, the bank didn’t fully understand what was important to the customer and how to increase value in ways for which clients were willing to pay.

Two weeks ago, the CMO at another financial institution shared his frustration that he could not stop branch employees from creating their own handwritten displays, no matter how many times he communicated the policy against impromptu marketing.

I understand the importance of brand standards, consistency, and professionalism. But I also understand how difficult it is to establish the entrepreneurial spirit in your store managers so that they embed themselves in the community, keeping their ear to the ground for what really matters. Or to put it another way, to understand the equivalent of your community’s “Save Our Triangle.”

Each community in which you operate has it’s own version of the triangle. And it’s imperative that someone in your organization understands what it is.

Client centricity and community engagement/understanding don’t just happen by themselves. And it takes more than a mission statement or statement of values to achieve them.

So how do you bring those statements to life—through your entire staff—to truly differentiate yourselves?

I would offer three suggestion

1. Innovate around customer needs.

It’s true, we are in a commodity business. But, as Morton Salt proved 100 years ago, you can differentiate anything. It all starts with really understanding your customers’ needs and where you and the industry are falling short. An example might help:

The Plutonium Card – Landmark Bank, a community bank headquartered in Missouri, identified an opportunity in the fact that a significant proportion of its customers had a credit card from a third party provider. According to Shon Aguero, EVP of Retail and Small Business Banking, “We had to ask ourselves, ‘Who will buy this product?’ Understanding the type of customers we draw, their relative profitability, and their propensity to purchase a product like this was a great place to start.” This research helped the bank craft a set of benefits that would meet the customers’ needs better than any alternative. The end result was the Plutonium Credit Card, which doubled Landmark’s credit card sales and achieves mail response rates at twice the industry average.


2. Consider price for value.

What are customers willing to pay for, and what particular fees get under their skin? This is a critical question as it relates to the triangle, and it’s amazing how many bankers don’t know the answer. The answer doesn’t even require expensive market research. Talking to your branch and contact center employees can yield key insights.

Bangor Savings Bank’s Totally Free ATMs – In 2006, Bangor Savings Bank knew it was on to something. In focus groups bankers kept hearing about customer frustration over paying $3 “to get my own money.” The bank introduced “totally free ATMs” and never looked back. Eliminating a prime pain point allowed the bank to attract more than its fair share of new households and to earn revenue on the range of other services these new households purchased. CFOs may shudder to know the bank has refunded $16 million in ATM fees since launching the program. CEOs will appreciate that Bangor is the fastest growing bank in a mature state and that profits have nearly doubled to about $25 million in 2016.


3. Engage with your communities.

Community banks all provide donations to charitable organizations. But have you assigned an individual in each community to identify the local triangle, and to visibly support it? Are your people as visible in community events as your logo?

Heard on Hurd – This monthly street festival was created by Citizens Bank of Edmond (Oklahoma). It’s a food and music gathering that brings together neighbors and generates revenue for small businesses. And it’s brought to the community solely by Citizens Bank, which you can see in the background of this photo.


Lead Bank’s Business Incubator – We’ve heard of banks dabbling with business centers, but Lead Bank’s Crossroads location in the Kansas City Arts District goes much further, inspired by business incubators. It’s open to business customers and noncustomers alike, and they are free to sit and work on their laptops using free WiFi, conduct business meetings in private conference rooms, or just relax on a rooftop deck.


Saving your triangle.

Do you know what really makes your customers tick? What’s critically important to them? What they like about doing business with your institution? What unmet needs they have?

Customer analytics and segment-driven strategies can help.

Have you assigned someone to “own” each community, be a visible vibrant member of that community, and have their ear to the ground to discover that community’s triangle?

Reconsider how roles and responsibilities are defined.

Finally, do you factor this insight into your bank’s service management, sponsorships and donations, and efforts in marketing, product development, and community relations?

Alignment across the organization is critical.

Don’t be like Homewood City Hall, concerned only with budgets and efficiency. Rather, begin by listening to your customers and communities. Not only will you save your triangle, your community will continue to grow and shine ever brighter.

Mark Gibson is senior consultant at Capital Performance Group, a strategic consulting firm that provides advisory, planning, analytic, and project management services to the financial services industry. Email: [email protected]. LinkedIn. Portions of this article are based on a similar article written by Mary Beth Sullivan, Managing Partner of Capital Performance Group.

Hear more from Mark Gibson and Mary Beth Sullivan, when they present at the ABA Bank Marketing Conference, September 24-26, 2017. We look forward to seeing you in New Orleans!