Filed under: Experience
Presented at the Retail Financial Lending Summit 14th May 2010
If everyone from supermarkets and search engines to phone companies and airlines offer banking services where does this leave banks?
- And what happens when we use less cash, if by 2018 less than half of all transactions will be paid that way?
- And this virtual currency thing- how does that change what a bank is- and what people might want from a bank?
- Australia’s big banks are failing to make the grade according to consumer ratings released by Mozo.com.au
- Yet innovation is coming from direct banks and credit unions.
- And players who have good retail understanding are encroaching on traditional territory.
Might focusing on your brand experience and your customers change the game?
- Zappos is powered by service
- The power of Repeat Customers & Word of Mouth
- Explicit core values that get translated into brand behaviors
- Recruitment is indoctrination into company culture- everyone gets a $2000 offer to leave. 1% take it.
- It sold for $1 billion
Why can’t complex organizations provide great brand experiences?
- Mike’s Hard Lemonade-Barry Schwartz call to defeat process over practical wisdom
- Best Buy’s Geek Squad turns the ordinary business of technology troubleshooting into a customer adventure
- Zip Car innovating the experience of car rental
- That customers want to be served face-to-face. If banks are to move beyond acquisition – to retention and to wallet penetration – then they must reinvent the branch from a glorified transaction centre to a product sales and advisory service center.
- Up to 90% of customer relationships are formed - and lost – in branches.
- Banks will not succeed at maintaining and growing customer relationships unless they provide customers with quality sales and service in branches.
- The conundrum of customer centricity, however, is that most customers don’t see banks as providers of advice-based services. This is not surprising given the extent to which branches have been deskilled over the last decade. The perception map shows that banks deliver only on broad knowledge and bright smiles—not what is needed to deepen client relationships.
The reinvented bank
- There has been a lot of excitement recently around the “Gap-ification” of branches—making them look more like retail stores than like stodgy old branches. But a mere face-lift is not enough.
- The Umpqua Bank retail design strategy translated the culture of a small community bank into an integrated brand experience and helped Umpqua grow from $120M to $8B.
- “It’s all contrary to what you might find in a bank,” says Lani Hayward, executive vice-president for creative strategies at Umpqua. But deposits at the branches Umpqua has converted are up an average of 30% since the changeovers, and the average number of products sold to each household is double that at the traditional branches”
- ING Direct is an online bank, but management realized the bank needed some physical presence to reassure the public the bank was more than a billboard. So execs devised the ING café, which look like Starbucks; people can go have coffee, smoothies, use a free-wireless connection, and learn about ING if they choose. But the eight “branches” have no transactional ability whatsoever; people still must sign up and do transactions online. For example, the ING café in Chicago had “Bike to Work Week Specials” in mid-June. “Every bicyclist that rides to the ING DIRECT Café during Bike to Work Week will be treated to a free bike valet, beverage and tune up. While you’re there, ask a Café Associate about other simple ways to save your money.”
- WaMu rolled out its retail branch design with great fanfare in 2000, and used the new model as they moved into new markets such as Las Vegas and Atlanta. Later they remodeled existing branches to incorporate the new retail features. Before WaMu collapsed last September, they had spent roughly $1 billion on a branch-building binge.
- Some bankers are thinking along these lines, and they repeat a similar mantra: innovative branch design and technology must encourage engagement with employees, not to discourage human interaction. Executives at Barclays, Umpqua, Key Bank and TD Bank, to name a few, view the branch as the channel of choice to build customer relationships. “The biggest thing in banking is the relationship, and you can’t do that online,” says Lani Hayward, evp of creative strategies at Umpqua Bank. “You can make mistake after mistake after mistake, and the customer will stay with you if they believe you’ll take care of them.”
Aligning brand promises into brand behavior
- You can understand where you’re NOT delivering
- In order to work out where you can make improvements
- But you need to inspire your team’s BEHAVIOUR
- And understand that your team is made of different types of people
- Who have different engagement needs
- Warmth and Wisdom
- There are no miracles
Research compiled for this presentation can be found here: http://delicious.com/katiechatfield/banking
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