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Customer Engagement Model for Branch Banking

Mar 22, 2011 / Consumer Banking

Conventional wisdom holds that technology is changing the way a bank branch operates. For example, we often hear that the bank branch is dead due to the rise in online, ATM-based and mobile banking. Yet, bankers know from direct experience and industry research that the bank branch remains paramount when it comes to certain aspects of customer service. So while the branch is certainly not “dead,” it does need to change to meet the evolving needs of today’s consumers.

Technically-savvy customers primarily identify with their banks based on ATM locations, Website or a mobile banking application. But they probably don’t truly know their bank and the bank doesn’t really know them. For this growing number of customers, their reasons for going into a branch are typically prompted by lifestyle changes such as marriage, new home, baby, etc.

Therefore, banks must seize every opportunity to engage these customers in discussions about their overall financial needs and objectives. They also must create incentives for customers to walk into the branch and interact with bank staff because such engagements will only help increase customer loyalty, build the foundation for a long-lasting relationship and ultimately boost share of wallet.

Relationship-based Branch

Moving from a transaction- and/or service-based model to one that focuses more on “engaging” the customer requires a roadmap that will help make the shift in culture, skills and resources. The end result is establishing a relationship-based branch of the future. Here are four steps to help you get started on the journey:

  • Understand Customer Preferences and Get Feedback

The best way to get to know your customers is by having a dialogue with them; the days of opening an account in 10 minutes should be long gone. Instead, take extra time to explain to the customer what he/she can expect from your bank and ask questions during the process such as “What method of communication do you prefer? For complex transactions, do you access online or leverage the branch? What are your financial goals?” In a nutshell, position and reinforce your bank as a trusted advisor.

Another way to help understand customer needs and communication preferences is through a “get-to-know-you” campaign – essentially inviting customers to a meet-and-greet. Frame the offer as an opportunity for customers to ask the experts questions about their financial needs and share what they  expect out of their relationship with the bank. Be sure to avoid pushing the product-of-the-day, as this time should be centered on customer needs and relationship building. For select customers, a nice gesture may be taking them to lunch. Regardless of the approach, be sure to follow up so customers know you’re listening.

  • Define the Meaning of “Relationship Banker”

Taking the steps to understand what it’s like to be a “relationship banker” requires a real change in thinking. For example, Delaware-based Wilmington Savings Fund Society (WSFS) has been deploying “universal associates” – employees with a broad set of skills – for roughly eight years. Rick Wright, executive vice president and director of retail banking and marketing at WSFS Bank, was quoted in a recent Workforce Management Magazine article saying that instead of hiring people with banking experience, he seeks recent college graduates and candidates with retail experience. It’s critical to evaluate the qualities and skills needed to be successful in this new role.

  • Communicate Changes to Branch Staff

In order to make these changes a success, branch staff need to see a real commitment from executive management to the new branch model. Consider running an internal communications campaign, in addition to the one focused on the customer. By communicating to employees the value of shifting from a service to an engagement model, they will understand what is required to deepen customer relationships, not just sell them products. Incentive plans that are based on overall account or portfolio management and customer satisfaction, rather than the standard sales units and revenue, are also critical.

  • Improve Staff Performance with Training

The new engagement model requires that frontline staff be trained on relationship management, as well as having an in-depth knowledge of products and services offered. Historically, banks have leveraged classroom learning, which was followed by alerts and notifications. However, this traditional model is not scalable and the application of knowledge from alerts/notifications isn’t easy to measure. Solutions that deliver electronic learning clips to the employee desktop, and then tie in performance ratings that illustrate before and after metrics, offer banks more impactful results. It is also recommended that banks have a way to continually refresh training for staff, as products change frequently, new campaigns launch and consumer needs evolve. Both the branch and staff will benefit from the ability to measure performance to help ensure that customer and bank expectations are met.

While the landscape for branch banks is still evolving, one thing is certain. As more consumers enter the digital age, there will be fewer opportunities for branch staff to interact with their customers. Forward-thinking banks shouldn’t delay the opportunity to build strategies and tactical plans that will allow them to leverage their branches to deepen customer relationships and uncover lucrative, long-term revenue opportunities via face-to-face interactions. The key behind meeting the financial advice needs of consumers is in training and transitioning frontline staff from service and transaction processors to relationship managers – all with an in-depth knowledge of the bank’s products and services.

Ms. Hudson serves as director, retail banking practice, for Verint Witness Actionable Solutions at Melville, N.Y.-based Verint Systems Inc. She can be reached at [email protected].