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Ten Myths about Workplace Banking


Financial institutions are facing declining branch transactions and diminished branch sales. As a result, more banks are looking to Workplace Banking as an effective channel for attracting new customers, expanding relationships with existing customers and therefore improving sales productivity and cost efficiency. After all, Workplace Banking puts branch teams in front of prospects and customers they no longer see in the branch.

If implemented effectively, Workplace Banking can be a significant incremental source of revenue, representing between 10% and 30% of total new customer relationships according to our analysis of over 20 Workplace Banking programs. The problem is that while many banks offer Bank-at-Work programs, comparatively few provide the structure needed to optimize long term profitability. Here’s a look at some myths about Workplace Banking and some suggestions of why your bank may not be getting the most out of these programs and how you can rectify that:

Myth #1. Workplace Banking drives low balance, low quality customer relationships.

Reality: Workplace Banking provides higher account quality than the bank average if the program structure includes focused company targeting. Although company targeting is the number one determinant of new account quality, many banks fail to put a disciplined process in place. Without this structure, local managers will often call on the easiest targets of opportunity, such as retail and hospitality, resulting in low balance and high turnover accounts. Conversely, employees working in professional services, academic, medical and technology fields will provide the bank with profitable, long lasting relationships. Additionally, branch teams will also meet current bank customers at their worksite and have the opportunity to cross-sell and deepen relationships.

Top Tip: Successful programs include a company approval and registration process to ensure targeting strategy is maintained and fail-safed.

Myth #2. Workplace Banking is an ineffective lead generation model.

Reality: The value of Workplace Banking is that it enables regular onsite access to potential and existing customers where they work. But access needs to be coupled with a lead generation program and a process to create appointments. Simply “showing up” onsite does not necessarily create a high level of immediate, on-the-spot, sales, but it can generate leads and appointments. For example, a monthly calendar of Financial Education Workshops will generate ongoing program awareness resulting in new appointments, which can be fulfilled either at the workplace or in the branch. It’s also important that program metrics capture cross-sell to existing customers, not just new checking, to measure the full marketing opportunity.

Top Tip: Program success should be measured by the number of appointments generated from workplace events, not just the number of onsite applications taken.

Myth #3. Workplace Banking programs require a heavy investment in sales resources and are expensive to build and run.

Reality: Based on our surveys and client work, cost per acquisition (CPA) can actually be 70% to 80% less expensive than traditional marketing programs. A CPA of <$100 can be realized with a fully structured and implemented Workplace initiative. Workplace programs do not require that banks make huge investment in sales resources. The fact is, dedicated support representatives can individually provide coverage for dozens of branches. For example, one major bank has just 12 sales people supporting over 1,000 branches and their program is generating over 10% of the bank’s new checking production.

Top Tip: Banks should leverage their commercial banking team to help cross-sell the program to their client base and reduce sales costs

Myth #4. Branches can manage Workplace Banking on their own.

Reality: Branch teams lack the training and experience to source, sell and implement targeted Workplace Banking programs on their own. Profitable Workplace Banking programs require a structured sales process with defined roles around who does what, when and with whom. For example, commercial relationship managers (RMs) should identify the client opportunity. A Workplace specialist will help sell the program to the company decision maker (especially at larger companies) and develop the implementation plan. And trained branch teams execute onsite events for employees. Workplace initiatives must also be proactively managed and monitored by bank leadership to ensure the bank is delivering on the program promise for clients.

Top Tip: Management needs to provide program structure including dedicated resources, tools and tactics to help branch teams be effective.

Myth #5. The bank needs to offer unique products and special pricing to get companies to buy in and employees to sign up.

Reality: Workplace Banking programs do not require the development of unique products or product pricing to be successful. Instead, Workplace Banking is a group sales model that entails understanding the needs of the group. For example, is the targeted firm growing or restructuring? Both scenarios present opportunities for the bank to help. At growing companies, the greatest opportunity may come from signing up new employees during their hiring and on-boarding and helping them enroll in direct deposit. At companies that are re-structuring, employees may need help with 401K transitioning. Companies are looking for partners who understand and support their objectives. In that regard, we’ve found that providing employee wellness programs, coupled with financial education and planning, resonates more than pricing discounts and are easier to convince companies to endorse.

Top Tip: Pitching “free checking” to employees will inevitably drive low quality relationships and is an unsustainable model.

Myth #6. Workplace Banking doesn’t fit with our customer segmentation strategy.

Reality: The workplace affords the opportunity to identify and uniquely communicate with all segments ranging from entry level staff to senior management. Banks can effectively demonstrate the benefits of their products, their commitment to customer service and their commitment to the communities they share. Comprehensive offers combined with focused company targeting will put branch teams in front of customer segments the bank wants to reach.

Top Tip: Integrate bank products and services that address various employee needs, for example, education and planning services for associates, wealth management products for mid-level executives and private banking services for “C” level staff.

Myth #7. Workplace Banking results are difficult to track.

Reality: Tracking programs can be created that are no more complex than the way any marketing program is monitored. For example, several large banks utilize individual company “marketing codes” to track employee enrollments. But the issue is rarely about capabilities to code activity, but more around the management process to ensure consistency and strategic focus. The company coding process should be standardized – and perhaps centralized – to ensure that Workplace volume is both incremental and targeted. Structure must be built around the sales process so that prospecting, selling and implementing activities can be monitored and tracked on a by-company basis.

Top Tip: Leverage in-place commercial banking tools for Workplace program pipeline management and sales activity tracking.  

Myth #8. Commercial banking teams will not support Workplace Banking.

Reality: Commercial banking teams will support programs that address the needs of their clients and deliver relevant, tangible value. As part of their normal sales process, commercial RMs are used to introducing product experts to their clients but they are not comfortable putting less experienced branch generalists in front of senior level company contacts. Build cross-business support by involving the commercial team in program development. Create credibility and rapport by having them participate in the selection of Workplace Banking representatives, since these will be their partners in joint calling efforts.

Top Tip: Integrate Workplace Banking product revenue into the commercial RM scorecard to pragmatically build cross-business support.

Myth #9. Branch teams don’t have time for Workplace Banking.

Reality: Shrinking customer traffic has led to fewer in-branch sales opportunities. Research by the Philadelphia Federal Reserve Bank indicates check-writing activity has been declining at a rate of 5-7% annually and, according to a report by FMSI, branches processed roughly half the transactions they did 20 years ago. Management can proactively support this transformation by refocusing branch teams away from declining transactions and toward sales growth with a comprehensive bank-wide Workplace Banking program.

Top Tip: The program objective should be increased penetration at targeted companies, resulting in reduced acquisition costs, increased branch team productivity and improved customer relationship quality.

Myth #10. More is better.

Reality: More accounts are not better if they are not the right accounts. Although new account production is a key performance metric, a singular volume focus can obscure underlying issues with account quality and targeting. Management needs to get underneath program volume to understand portfolio performance at both the company and industry level.

Top Tip: Make sure program metrics include new balances, product cross-sell, retention, household revenue and sales activities on a by-company and industry basis.

Mr. Corrigan is a consultant with Austin, Texas-based Peak Performance Consulting Group, which specializes in retail, community, and small business banking. He can be reached at [email protected].