BACK TO THE BRANCH.

Thought you could save money by chasing customers out of the branch and relegating them to ATMs and telephone and online banking? From the marketing perspective, that's dumb. Better to solidify the personal relationship by reinventing the branch banking experience.

Pity the confused branch bank! Over the last decade or two, the branch has suffered from an identity crisis: It couldn't quite make up its mind whether its job was to draw in customers or to drive them away.

Before the days of Web technology and drive-through ATMs, the branch was the primary retail location for the banking industry. To accomplish any banking transaction, the customer had no choice but to physically visit the branch. For most customers, going to the branch was a chore, despite the branch's crucial role. For some activities, such as applying for a loan, it could be an embarrassing or intimidating experience.

As time went on, banks introduced more convenient and less-expensive alternatives to branch visits. These included products such as telephone and online banking as well as full-service ATMs. For certain kinds of accounts, banks set transaction fees to dissuade customers from using expensive branch personnel except where essential, thereby discouraging customers from in-person visits.

Customers, when presented with alternatives, preferred to stay away from the branch. After all, branches, in many cases, meant long lines, lack of privacy and indifferent personal treatment.

After many customers stopped visiting the branch, the bankers started to rethink the situation. Were they passing up on a golden marketing opportunity to build relationships with their customers?

Some bankers started devising schemes to lure those wayward customers back to the branch. But how do you attract customers back in after you got them hooked on the habit of using ATMs and telephone and online banking?

The answer is that bankers have to change the experience of the branch bank. The aim must be to ensure every customer's branch visit evokes a rewarding feeling. To achieve that, bankers must create a branch environment in which the personnel, the physical layout, the use of technology and the banking products collaborate to serve and support a customer experience of value.

Common branch marketing mistakes

The bank has complete control over the branch, unlike other marketing channels such as the Internet. Every time a customer walks into a branch, there exists a potential marketing opportunity to expand the customer's relationship with the bank. However, too often, traditional branch marketing has been limited to communicating the bank's messages through the placement of signs and/or banners and literature racks. Yet, that is only a small part of what creates the customer experience. Every detail--from the presentation of the graphic materials, the consistency and ease of solving the customer's financial concerns, to the amount of time it takes to deliver products and services--must be orchestrated. Take a good look around your branch. What do you see? Which of these common pitfalls contribute to creating a less-than-ideal customer experience in your branches?

1. Are there too many messages? Confronted with too many marketing messages, a customer will ignore all of them. Even with the best visual message, the customer will invest only a few seconds to determine whether or not it is important Exhibit only one or two well-crafted messages. Other messages can be delivered to the customer either on demand or in a more personal format.

2. Are the messages presented in a cluttered manner? Are the messages' content consistent or presented in a contradictory voice--that is, personality or mood?

When the advertising agency, marketing group, facilities manager and branch-training manager are all on a different page, the result is a confusing jumble. There must be visual consistency, a common voice and design cohesiveness in all branch communication, merchandising and promotional materials.

3. Are the message categories clear? Marketing messages are not the only kind of message displayed in a branch. There may be informational messages designed to develop better understanding of products. Other examples are policy and instructional signage. Sometimes, signage for these purposes is confusingly similar to promotional messages. Confused customers stop reading.

4. Do your messages attract customer attention? Many promotional agencies used by banks have their roots in print publications, and it shows. Often, the graphics are excellent for viewing close, from hand to eye, but lack high impact from a distance. Customers are more likely to be attracted to a colorful literature grouping than a stack of brochures in small print with no color. To engage a customers attention and differentiate from other kinds of messages, promotional materials should present a singular look that is unmistakably promotional in appearance and placed in easy-to-access locations.

5. Can your customer see your merchandising and promotional messages? In today's evenly illuminated environments, one would assume that everything in the branch is seen easily. The problem is lack of focal contrast. Take a cue from specialty retailers who know how to create dramatic presentations with highly differentiated lighting levels. Spotlight the message. Introduce bright or contrasting colors in key focal areas. Juxtaposition your message with a contrasting scale.

6. Where is the brand identification? Many banks underestimate the importance of branding. Every communication, every promotion from a bank is an opportunity to build brand image. The goal is to differentiate your products, services and retail experience from the competition and deliver a memorable experience.

For example, if the bank has chosen red and gold as its colors along with the slogan, "We're the fast response bank," these should be everywhere--on the Web, on radio and TV ads, on posters, brochures, contracts, monthly statements and credit cards. This moves the bank's brand to first base. More importantly, the behavior in the branch (and in all delivery channels) must reinforce to the customer, in both obvious and symbolic fashion, the truth behind the claim. If the bank's brand is "fast response," maybe the staff should wear red and gold running shoes or caps to remind customers of the brand's mission, or find shortcuts to open accounts, preapprove customers for products and eliminate or greatly shorten lines. Even the branch layout should appear to satisfy the claim by offering multiple ATMs or fast-delivery shipping counters for small-business mail. Only when the customer experience consistently supports the brand offering, will it earn a home run in the customer's mind.

Fidelity Investments is one organization that has an extremely effective branch identification program. The company likes to remind customers visiting one of its 75 Investor Centers of Fidelity's heritage in money management and innovative customer services. "We believe strongly in the importance of our brand," says Tom Cmejla, senior vice president of Fidelity Investment Centers. "We feature a Fidelity history wall in the branch. This wail gives the visitor an important historical perspective of Fidelity's long tradition of service to the investment community."

7. Is your staff informed on in-branch or other bank promotions? Often the bank branch personnel are not involved in the creation, design or placement of promotional displays. All too often, the promotional messages and program are not integrated into daily activities, and the staff is not trained to draw attention to the message or even respond to queries. As a result, the momentum of a customer inquiry is lost, and the spark of interest fizzles out. To avoid this occurrence, integrate the merchandising and promotional appeals into the sales process. Incorporate materials displayed in the branch as part of the staff's selling routine.

Similarly, customers learn about the bank and its products through many media channels, TV, radio, Internet, newspapers and magazines. Often though, the branch personnel are unaware of marketing messages on these channels and are unable to intelligently respond to customer queries. Whenever a marketing program is implemented, regardless of the medium, it must include a training program for branch personnel.

8. How is the lobby maintained? Without branch staff buy-in, branch promotions often suffer from poor maintenance. Outdated materials are left on display while their replacements languish in a closet. Crooked banners are not straightened or scratched signs replaced.

9. Do customers know what to do next? A frequent mistake in promotions aimed at customer awareness is that they fail to explain the next step. A poster that makes the customer aware the bank offers an improved car loan program is incomplete unless it tells the customer the next step toward obtaining one. Such a poster requires the customer to take the initiative. Rather than waste time trying to find someone to answer questions, the customer simply leaves the branch.

10. Are banking representatives knowledgeable and available? People like to do business face-to-face with decision-makers. That is the primary reason people visit the branch. Yet, due to advances in technology, bank consolidations, branch downsizing and a lowering of branch personnel credentials, fewer qualified specialists are available to serve the customer. Consequently, an ill-timed visit while the manager is out may result in a customer waiting while a decision or approval is obtained from the regional office. Next time, that customer will just call the department directly (or seek a competitor who is readily available) and not bother with the visit. The solution is to maintain a constant online approval presence. The approval process can be transparent to the customer.

As the answers to these questions indicate, most branches today are still designed and operated much as they used to be. The layout with the counter and teller windows is still organized for routine banking transactions. Specialists handle more complicated requests in remote, private areas. Few branch personnel are trained to recognize a customer's visit as a sales opportunity.

Yet these days, the customers visiting a branch want the personal, one-on-one interaction. These customers also bring a complex variety of financial concerns and seek expert information in an environment that is often insufficiently prepared to address their needs.

Know your visitors

The bricks-and-mortar bank branch can be a powerful marketing tool. An important step toward improving the branch experience is to understand the customers who currently use the branch and their purpose in visiting. The profile of these customers will differ from branch to branch. It may also differ from one day to the next, even from hour to hour. The lunchtime crowd may be different from mid-afternoon visitors. Saturday morning customers may have distinct characteristics. With an understanding of the usage of a particular branch, managers can tailor services and messages accordingly. The aim is not only to respond in a timely and efficient manner to the customer's need in visiting the branch but also to provide added value. For instance, this added value might be in the form of practical advice or training that is uniquely valuable for different customer lifestyles (customized from the bank's MCIF data). It could also show the advantages of owning additional new banking products or services to realize the customer's goals more quickly.

The purchase of banking products tends to be event or life cycle driven rather than impulse driven. For instance, most customers are unlikely to apply for a car loan just because the bank is offering a new, improved loan package. Customers must first perceive a need to buy or refinance. Simply placing a poster announcing the bank's improved car loan program is not likely to be effective. Consumers are constantly bombarded with messages from all directions. Most branch customers simply do not read static posters, brochures or other marketing materials. Even if they do, without some kind of interaction, it is unlikely that they will retain the message longer than it takes them to leave the building. A month later, very few customers will remember the bank-financing program even when they go to purchase that new car.

Contrast that marketing program with the following marketing strategy. A series of on-going "themed" displays/events are planned in branches located in residential areas. These displays offer information, products or services (based on demographics of the community), like how to evaluate a person's transportation needs, where the most popular retirement areas are located, how to select college-level evening classes and tips and trends on remodeling a home.

For example, one week the bank features video footage of local retirement living, nursing care and home care options available in the community. Floor plans, taped interviews and a customer-controlled virtual tour on a large computer screen offer insight into caring for the elderly. More than just a bank initiative, several local companies offer free advice and information on moving, insurance, medical centers, downsizing checklists and counseling. The goal is immersing the customer and staff in a useful and valuable exchange. Sure, add the coffee and nice chairs, but the real experience is persona! education and enlightenment.

Together with the staffs assistance, the customer can play no risk "what if" games on refinancing, down payment and monthly payments. The customer can compare multiple financing options and access consumer-data reports on customer satisfaction. Most importantly, they can find out whether, at that moment, they or their family member qualify for a loan and how to complete the loan process once they have selected an action plan. While using the interactive display, friendly branch personnel check up on the customer to make sure that they are comfortable with the technology, to answer questions and to refill the coffee. They may chat about elderly care, find out whether the customer is just curious or actually in a changing life-stage process. That customer leaves the branch enriched with an understanding of personal issues as it applies to them. The branch visit experience was useful, educational and "unexpected." He or she will come back again. When that customer does decide to refinance, open a small business or look for college financing, there is a strong likelihood that they will opt for the convenience of a loan from their bank. Now they know, assuming there is no change in their financial situation, they are already approved.

Preparing the branch for the customer

Understanding the different customer profiles of those visiting a branch, the bank's next step is to prepare for the visit. This requires considerable rethinking. The layout of the branch, organization of its product and service information and even the experience planned for each customer must be prepared in advance. Today, in most branches, a customer or prospect who has made the effort to come into the branch is faced with waiting in the teller line to ask questions and gain information from the bank's lowest-paid personnel. Tellers are qualified, loyal workers with a passion for accuracy and process--but they are not often sales or solution-oriented. Frequently, marketing opportunities are squandered and customers are alienated.

In an ideal branch environment, the person best qualified to satisfy a customer's need would greet the customer at the door. The task of that person would be to put customers at ease, determine the purpose of their visit, initiate action to satisfy that purpose and start the customer on an appropriate path toward an enriching experience. The next step on that path might be an introduction to another staff member--who may be on-call via webcast from an off-site location--or a computer-based instruction session like the elderly living program described above.

However, the bank must exercise cure to avoid overusing technology. Customers who come to branches are often those who prefer to interact with people. Within the branch, technology must be optional or transparent. While most technology-savvy people prefer the do-it-yourself approach, there are still many who are more comfortable sitting down with a branch employee while the latter operates the workstation. The key is creating the perception of the customer always being in control. When there is a relaxed atmosphere of respect for the customer by the bank employee and vice versa, there is the basis for an expanded business relationship.

Under no circumstances should the desire to expand the relationship impede the customer's purpose in visiting the branch. Satisfy the customer's priorities for the visit first in a manner that is efficient and direct. Accomplish simple tasks for customers while they interact with the workstation or meet with another staff member.

Bank branches for the new millennium

In the last two decades, retail banking has undergone enormous change. As we look into the new millennium, it is clear that the rate of change is increasing. Products are changing and increasingly being offered more efficiently on the Web. Competition is on the rise. The impact of technology is everywhere. In this context, the bank branch with its teller counter, high cost of transactions and its vault in the back may be an anachronism. However, we should think carefully before embarking on further demolition of the branch network Bank branches are, in many area, still important elements of the local community's infrastructure. By rethinking the purpose of the branch, revitalizing and redirecting its activities, banks can gain considerable competitive advantage. Making each visit a rewarding, enriching experience is the key to getting customers back in the bank branch lobby.

Timothy Bachman, is a principal of BachmanMiller Group, Dublin, Ohio, a retail design and environmental communications firm that specializes in strategic facility planning graphic/fixture merchandising, implementation and installation. (www.bachmanmiller.com)

Four Ideas to Increase Customer Visits

1. Targeted branches

Not every branch needs to be the same. A branch in a corporate neighborhood may become a small-business branch, specializing in support of small-business owners and staffed accordingly. In an affluent residential area, the branch might become an investment center operating with the latest financial news and a noted authority on investment tactics. Perhaps including third-party vendors offering take-home software or a health bar in retirement communities.

2. Financial checkups

Branches can provide personal money management advice independent of traditional, regulated discussions: for instance, advice on the financial pros and cons of home improvement projects. If the customer wished, the bank could provide regular checkups on the customer's financial health, debt and spending habits. Many of these are benchmarked against general customer profiles in the community.

3. Personal mailboxes

Make the customer feel important and welcome. Offer a new destination within the branch. Whenever a customer visits a branch, a physical mailbox (customized with their name "just-in-time") is available for that customer. In that mailbox will be mail from the bank tailored to that customer--for instance, informing the customer that they are preapproved for a particular product or providing follow-up material from the last discussion.

4. Interactive financial planning

People learn by mistakes. Offer a no-risk opportunity to make hypothetical financial mistakes using the bank's "money." Workstations in the bank could enable customers to play what-if games. Starting from their current situation, they could investigate the effects of different financial strategies and different life events--for instance: the impact of dealing with an inheritance.