Bank merchandising firms
From Wikipedia, the free encyclopedia
A bank branch is a retail location where a bank or financial institution offers a wide array of face to face services to its customers. Like a store, a bank branch may either be a standalone building, or a space within a larger complex, such as a shopping plaza, mall or office building.
Financial services organizations which are not banks also have bank-like retail branches. Credit unions, a bank-like entity, have become increasingly prevalent due to changing regulations in many areas, and often compete with banks for deposits and loans.
Other financial services companies such as full service brokerages (also known as wire houses”) and online discount brokerages have opened retail branches.
For merchandising purposes, a bank or other financial institution’s retail presence will be referred to as a branch, and when the term bank branch is used, it should be understood that it applies to credit union branches as well as brokerage retail outlets.
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[edit] Bank Branch Services
Services provided by a bank branch include:
- Routine transactions such as cash withdrawals from and deposits into a customer’s account facilitated through a bank teller (more recently, customer service representative)
- Application for and disbursement of loans and mortgages
- Access to safe deposit boxes
- Foreign currency exchange
- Advice and transactions regarding more sophisticated investments, and the sale of different types of insurance products
[edit] History - Bank Branches
Bank branches became prevalent in banking relatively recently in the history of American banking, at the early part of the twentieth century. Prior to that period, each banking institution was a standalone entity and had bu one “retail” outlet. Some states retained branch baking prohibitions well into the twentieth century.
Banks historically were large and stately buildings, often neo-classical in architectural style, intended to demonstrate security of the depositor’s cash. As branches proliferated and the suburbs of America became populated, branches appeared in retail strip plazas and the outbuildings of “big box” store parking lots – hardly the columned edifices of the early days of banking. With this change, came the importance of creating a uniform look among all branch location, allowing a certain comfort and familiarity for the customer.
Methods of transacting business at the bank evolved from within the confines of the bank branch to the drive-though, telephone banking, automated teller machines (ATMs) and more recently Internet banking.
With the advance of technology, many banks jumped at the opportunity to service customers in less expensive ways, encouraging customers to transact electronically to cut costs, and in one notable example in Chicago, a large bank penalized customers for using the branch by charging for each teller transactions.
More recently, several banks unveiled Internet-only divisions, enabling them to reduce costs, and expand well beyond their geographic footprint, trading better rates on savings and lending for personal service.
Within traditional bank management, senior executives have realized that they have to transform their frontline staff from transaction-oriented to sales-oriented, and institute a sales culture within the branches to cross-sell bank products and services.
Multiple product ownership, it has been proven, dramatically enhances customer retention. So hiring people with sales ability, conducting sales training classes or incorporating sales cues within transaction screens, to suggest the next logical product sell have all become commonplace.
There has also been a realization that the move to transfer transactions from within the branch to the ATM, telephone center and Internet has inhibited the bank’s ability to cross-sell, especially for non-traditional product such as investments and insurance. The absence of face to face contact reduces, or even eliminates, the ability to engage the bank’s most profitable customers, thus merchandising fixtures have stepped into the role of piquing a customer’s interest, and prompting them to ask questions about available products and services.
[edit] Bank Branch Merchandising
The term “merchandising” has different meanings in the marketing lexicon. It can mean using the brand of one product to sell another, or the promotional activities of an organization’s sales force, retailers, wholesalers or dealers.
In this context we will use the term to describe activities and tactics which involve the physical presentation of products and displays, and the decisions about which products should be presented to which customers at what time.
In the banking industry, this includes the visual interpretations of the bank’s brand. The brand represents more than the visual identification of the bank, or its corporate identity.
The bank’s brand represents includes every component of the customer experience, from the quality of the furniture and fixtures, to the greeting of the staff to the information conveyed on the walls, just to name a few. The customer experience at the branch is the best opportunity to present and differentiate the bank’s brand.
Engaging the customer in meaningful discussions, uncovering life cycle changes and the resultant financial needs, has become a primary responsibility for front line staff. They are charged with, and incentivized for, recommending products or referring customers to other staffers with more specialized skills, or requisite licensure.
Branch merchandising plays an important role in the sales process, and in the in the bank’s overall brand awareness and promotional campaigns.
The newest trend in retail banking involves designing branches to become destinations. Banks often consider a more retail layout and fixturing style, offering lounge, refreshment and reading areas as well as internet access and WiFi, providing comfort along with information, all of which the bank hopes will encourage a customer to linger.
It is well known that selling more product to one’s own customers is more cost effective than attracting brand new customers often by a multiple of five or ten times, and a customer who has spent time at the branch location has built up a level of trust and comfort with the branch personnel. Engaging the existing customer on a personal level, at retail, and building, and subsequently deepening, a relationship is the most effective way to increase a bank’s “share of wallet” for each customer.
[edit] Factors of Branch Merchandising / Merchandising Techniques
Areas of consideration for bank merchandising programs include space planning, the interior design and layout itself, both from a communications and a functional standpoint. How traffic flows, sight lines, waiting areas, how services are provided, and how the bank’s brand is represented in three dimensions are all critical considerations.
Other factors include the effective presentation, and optimal placement of products and services that the bank customer may not currently have. The information should be presented clearly and impactfully, and areas should be provided where customers can discuss their needs for bank products privately. By industry regulation, investment products require an identified separate area where non-FDIC insured products are discussed.
Identified high-value customers often have access to separate teller lines, or are able to avoid lines altogether.
Fixturing to hold signs and sales materials need careful consideration, and must fit into the overall scheme, providing a uniform branding impression.
Electronics play a part in modern branch merchandising schemes, with private television networks, programmed video presentations, interactive displays and programmable message boards beginning to proliferate in formerly staid bank branch locations.
While expenses for branch merchandising are often divided between marketing and facilities departments of larger banks, the best results are achieved when the departments act in concert to reach agreed upon branding goals set by senior management. Some merchandising expenses are considered “capital” improvements, while others are marketing “expense”, categories often pre-determined by the bank’s finance department.
A design organization, with significant bank branch merchandising capability will be able to provide strategic planning, design, fabrication and installation of a branch merchandising program.
[edit] See Also
- Design For Industry (DFI)
