Banks can maximize every aspect of the site, and every floor and wall surface of the building, including signage, for visibility, awareness, community traffic and visitor absorption of information.
By Steve Reider
Renowned management theorist Henry Mintzberg, a professor at Montreal’s McGill University, first published his framework of managerial roles in his 1973 book, The Nature of Managerial Work. Mintzberg delineated 10 distinct roles of a manager, grouped into three categories: interpersonal (figurehead, leader, liaison); informational (monitor, disseminator, spokesperson); and decisional (entrepreneur, disturbance handler, resource allocator, negotiator).
Mintzberg’s role categorization provides a framework for understanding the essential functions of an effecte leader and correspondingly a framework for allocating a manager’s time resources across those roles.
With credit to Mintzberg, we can position the role of the bank branch in a parallel framework, by considering what the essential roles of the branch are and how bankers should organize branches around those roles.
In that context, the branch’s existence can be framed in eight roles under three categories. Operational, developmental and promotional.
The developmental roles of the branch are those that enable it to directly bring the organization toward its financial goals. Developmental roles include new-client recruiter and cross-seller.
The operational roles may be what consumers first think of in their perceptions of the branch: problem solver, fiduciary security, currency and instrument exchanger.
The promotional roles are most directly related to the physical design and positioning of the branch: awareness builder, community focal point, educator.
To the banker, the developmental roles likely seem most important, as the branch provides a private and calm environment in which to conduct face-to-face conversations about clients’ financial needs and aspirations. To the customer, the operational role may appear paramount, as there is an array of specific activities related to the handling of currency and other financial instruments that can occur only at a physical facility, be it branch or ATM. And even as non-branch deposit venues such as advanced ATMs and remote capture gain traction, exchange functions remain that can occur only at the branch: opening cash orders for businesses, cashiers’ checks and large-amount deposits (to name a few).
The customer also views the branch as the venue of last resort for problem resolution. When the call center and the online chat function are unable to resolve an issue, there is no better option than bringing issues face-to-face with an empathetic banker.
However, the promotional role of the branch may remain overlooked. Fundamentally, the physical structure itself doesn’t do anything. It stands unchanging year after year. And yet, no one can open an account, whether in person or online, or cash a check or withdraw cash from a bank unless they first learn that the bank exists.
That may seem obvious, but consider those who move to a new city for retirement or employment. How do they decide where to shop for groceries? Where to go for dinner that first night in a new town, before they’ve even found the grocery store to cook in their own kitchen? And yes, how do they find a bank?
You can browse online to find groceries, restaurants and bank and credit union branches. But we all also find many of our retail venues by the simple act of driving down the street and taking note of the businesses there.
Consider this: You are the CEO of a community bank in Detroit. You add an online banking platform. Should you reasonably expect a meaningful number of customers from Charlotte? A community bank’s marketing budget cannot possibly compete with national brands (whether online specialists or hybrid national banks) in gathering deposits and initiating loans online.
Rather, the community bank in Detroit likely remains limited to attracting clients from … Detroit. Given that, physical prominence—expressed in positioning, design and exterior signage—merits significant attention so the branch becomes as effective of a billboard for the company as possible. Something that passers-by notice and retain for when their next financial services need arises.
But the awareness builder is just one of three roles of the branch’s promotional dimension. The other two remain important, too. Developing the community focal point role can provide a key differentiator and build loyalty. For larger physical facilities, this may involve repurposing surplus space for use as a community room, actively promoted to local civic organizations as a place they can meet. For smaller facilities that lack sufficient space for external activities, consider community memo boards to advertise local events, or decorating the branch with works of local artists. Perhaps even featuring an artist of the quarter, with works available for purchase.
Some institutions allow branches to feature a business of the month, a chance for a local business client to promote its offerings in a respectful and appropriate manner. The overriding objective: Give people a reason to visit the branch beyond cashing a check or opening a CD. It will be rare for someone to attend a meeting of the community garden club or Neighborhood Watch and choose to open a money market account right then and there. But next time one of the attendees faces a financial need, the branch where they recently attended that meeting is likely to come to mind.
Finally, consider the educator role. Can a building educate? Absolutely. Keep in mind, every square foot of floor space, every inch of wall space, is an opportunity to present messaging that educates the consumer about the institution’s offerings. Even absent any contact with an employee, the physical environment of the branch can provide education to consumers.
In its simplest form, this can involve basic informational merchandising: the poster on the wall that illustrates the new home equity product; the kiosk that includes marketing collateral; the closed-loop television screen showing stories of branch staff engaging in local volunteer efforts. In more complex forms, this can progress to interactive kiosks and touch-screen wall displays where consumers can compare product options, or test drive the bank’s mobile and online banking platforms.
The overarching goal remains to increase consumers’ knowledge of the institution’s offerings. If that occurs, it will eventually manifest in additional product sales, even if those results occur with a lag from when the branch visitor first engages with the branch’s educational content.
Just as managers carry multiple roles, so do branches. And just as managers must allocate resources across their multiple roles, so must the branch allocate resources across its multiple roles. Bankers tend to focus on the interpersonal branch roles, of business development and operational functions. This is sensible; after all, consumers visit the branch specifically for direct interactions with other humans. However, the building itself, although immobile and non-sentient, nonetheless plays a critical role, too. A well-located and thoughtfully defined structure serves as a billboard to build awareness of the institution, provides a focal point for community engagement and educates visitors about the institution’s offerings, even before any interpersonal interaction needs to occur.
For years, many bankers were content to deploy classic colonial-style buildings with a large lobby teller area, a rate board in the center of the floor and some paintings of fox hunts and such on the walls. Today, it is imperative to consider every aspect of the site, and every floor and wall surface of the building, to maximize signage, visibility, awareness, community traffic and visitor absorption of information. To optimize the substantial investments branches entail. An array of architects, designers and merchandising consultants serve this very function in our industry and banks benefit when they avail themselves of such resources to maximize branches’ execution of their promotional roles.
Steve Reider is the president of Bancography, which publishes Bancology, a quarterly newsletter on bank marketing strategies. Email: [email protected].
