Mary Beth Sullivan from Capital Performance Group, in her recent blog article The Future of Branches: Reinvention in the Banking Strategies section of the BAI website proposed an interesting solution to retail branch profitability. It’s called sales. She referenced a huge market that banks can own by leveraging their branch network. This market is people who are looking for advice. Martha Stewart realized this a long time ago and built a business around it. People want to be told what to do. It holds true in personal finances as well. People are looking for simple and easy to understand information and guidance from someone they trust. And they will do business with the one who is there to provide it. This includes the enormous baby boom generation that has been turned upside down by the Great Recession. They want to be told what to do as they face retirement – without the confusing jargon.
Most banks have the people and products in place to provide their customers with a wide range of financial solutions. In spite of that, their share of wallet remains a low two out of ten. Bank executives have put organic growth through cross selling as a number one goal for years.
So, what is standing in the way and how do banks get over it? To be successful, banks must overcome a couple of hurdles. Today, bank branches are seen narrowly as a place to go for transactions. Banks need to broaden that image as the place to go for personal advice on financial issues that people face at all stages of life. And banks need to get better at having front line employees start dialogues and set up sales appointments. Most of these frontline employees are working at a bank because they are service oriented.
The way over both of these barriers is to provide educational content. But the key to using educational content to drive sales is how it is delivered. It cannot just sit idle on a bank’s website. Delivered properly, the bank becomes a resource, drawing people hungry for answers. And frontline employees use it as a way of starting dialogues and setting up sales appointments in a comfortable service oriented manner. An added benefit to this approach is that loyalty skyrockets. The bank provides a valuable service and the customer not only stays, but buys.