Mar 29, 2019

Branches at the crossroads: Distribution centers or centers of advice?

While consumers and small businesses consistently rate “local branch convenience” as a deciding factor in choosing their financial institutions, branch transactions are declining at an average rate of 7 percent per year—even higher in many urban areas.

If transactions continue to drop and customers still want branches, then what does the “branch of the future” look like? We consistently hear bank leaders say, “Our future branches will be centers of excellence where consumers and business owners go for advice.”

But can they deliver on this promise?  As digital search and self-service capabilities grow, consumers and small business owners increasingly look to the internet, friends and social media for advice. 

You can find many good examples of bankers who’ve earned their clients’ respect and trust through their own study, experience and desk-side manner. But very, very few banks have lifted all or most of their branch, field sales or call center client-facing team members to this level. Nor will they, unless they re-think the approach.

Turning over a new leaf on turnover

During the last 50 years, many banks chose “growth stock” strategies. They adopted consumer product marketing strategies and invested in sales cultures—pushing product disguised as “consultative selling.” They built or acquired significant distribution systems to pump out products.

To reduce costs, bank leaders increased regional and district managers’ territories from eight to 16 or 18 branches. But that made serious behavior coaching almost impossible. As cost pressures increased, many banks reduced investments in customer service and sales training—and provided only a few hours of conversation skills training and product knowledge training during employees’ first weeks with the bank.

In larger banks, annual turnover in the most frequently customer facing positions reached 25 to 35 percent. This degradation led to an outcome put starkly by one bank customer: “Why would I want to go to a place where I know more than they do?”

The view from the branches: Out of the woods

That customer question frames the path forward: it’s about knowledge and the ability to use that knowledge productively to provide counsel or advice. This helps clients choose the right products or make more weighty decisions.

Since it’s very expensive to build and maintain guidance or advice skills in a salesforce that experiences significant turnover, banks must strategize where they want to provide guidance or advice, on which of their issues, and through which people or online resources.  

We propose six steps:

1.  Choose who you plan to advise or guide ... and on which issues

While most banks and credit unions serve a general public, each bank should decide to which of their client segments they want to provide guidance—with an eye towards focusing on key questions.

2. Decide who delivers how much guidance

For each guidance issue, options include (1) online self-service advice, (2) branch manager or universal associates, or (3) roving or video/telephone-based specialists with branch connections. Considering the range of guidance issues, a bank might decide to deliver guidance differently depending on the issue; for example, referring more complex matters to more skilled colleagues.

3. Support “guidance” with front-line tools

Branch staff need front-line tools that walk them through logical conversations to identify needs, present options and prompt with supporting information. This way, they need not depend on their memories alone to provide guidance or advice.

Supporting information can include paper or online articles, “health checks,” calculators or other software branch staff recommend to clients. 

4. Train staff to facilitate “guidance” discussions

Most branch staff are young and possess little personal financial experience. Many branch managers lack deep experience with small business management issues; few have managed businesses other than their branches. Shift training to focus first on building knowledge about clients’ questions or challenges; second, on asking probing questions to draw out the challenges; and third, how we solve them with products or guidance.

5. Require more practice. Coach more frequently and intentionally. 

Provide more and higher quality conversation practice time and coaching to all levels of staff. Otherwise, staff will likely default to “We have these five products. Which one would you like?”

Regional and branch manager roles must shift from administrator to coach. Branch managers in particular must learn their own “guidance-providing” roles and expand them from “lead salesperson” to “coaches of sales staff teams.”   

To support this metamorphosis, we need to provide the right tools. These include training content, protocols for branch activity cadences,  and dashboards. The dashboards should show how staff perform the activities and relationship-deepening conversations required to provide guidance—and make their branches successful.

6. Feed the front line continuously

If banks want to develop and maintain their role as trusted advisors for consumers and small businesses, they must act as the “go to” source for financial information. And that means continuous investment in the information bank customers need; providing it to staff and customers; and training both staff and customers to use it.

Right tools, right time

Getting from here to there may seem daunting and yet ... good news! Consumers and small business owners still prefer to visit bank branches to purchase new products or to ask for input. There are many existing and emerging “plug and play” resources and tools to help financial institutions create information libraries and support meaningful, valuable banker conversations.

The trick is to, first, define focus and strategy and, second, provide the tools and training that get results. Taken together, these enable our generalist call center, branch, and business banker team members to listen thoughtfully, help customers consider their options, and provide targeted advice when it’s needed.

Before we can expect customers to put their money in our branches—whether in the future or right now—we must first make sure to put money into our employees. Giving them the tools they need will help them and our banks succeed.


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David Kerstein is president at Peak Performance Consulting Group and Nick Miller is president at Clarity Advantage.  They can be reached at dkerstein@ppcgroup.com or nickmiller@clarityadvantage.com

 

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