IF APPLE WERE A BANK, YOU’D WANT TO VISIT THEIR BRANCHES: LESSONS FOR BANKS FROM GREAT RETAILERS
Bank branches are an expensive way to do business. They are unprofitable, have a patchy sales record, and it is unclear whether they are doing anything to restore banks’ reputation. And it’s not just branches that are suffering; whole high streets are dying. As a result, banks find their remaining branches sandwiched between £1 shops and pay-day loan companies – hardly the image they had in mind for their primary face-to-face channel.
Yet this doom and gloom story is not true of every retailer. There are still some notable successes on the high street and in out-of-town shopping centres. Apple may rely fundamentally on consumers’ online and mobile activity, but its Apple Stores are phenomenally successful. John Lewis has reported annual online sales over £1bn, but still favours an integrated ‘omnichannel’ approach. And Ikea has more than doubled its sales in the last 10 years. It is perhaps no accident that all three retailers have brands that are trusted by the public in ways that banks today can only dream of.
High-performing retailers have moved beyond paying lip-service to customer experience and are now using their stores to really engage with the public. They are driving this engagement through a combination of sales strategy, environment and staff motivation. As they strive to rebuild their shattered reputations, banks have much to learn from this.
A refocus on experience
HMV tried to compete with Amazon on price. Doing so, they lost their vital differentiator: the experience of being in a record store – that little bit of ‘rock-star chic’ in the high street.
Understanding and delighting the customer is central to this idea. Done correctly, banks can use their branches to engage with people in a way that simply isn’t possible through other channels. At the best branches, a customer engages with knowledgeable and trusted staff, experiencing the right tools and products in a pleasant atmosphere. At the worst, consumers walk into an uninspiring building with bland pamphlets, empty spaces and standalone machines.
How do you change this? As a start, you can invest in technology. Interactive touch screens allow customers to build their own products with staff members guiding them. You can also use multimedia displays and empowered digital merchandising, which enables customers to share information directly with their own devices. This information can be as simple as a QR code to take them to additional material, a record of the personalised product they built in the branch, or their new account details.
HSBC has taken significant strides to enable in-branch self-service, while Metro Bank’s offer to open a bank account with cash card within 15 minutes is making life simpler for busy consumers. Many others have taken steps to upgrade their branch fittings, fixtures and lighting. But, for many, much more can be done to create the right experience.
A change in mindset
Apple’s stores don’t push sales. Recognising that they aren’t offering anything that can’t be bought more quickly and cheaply online, the company makes customer needs the focal point of its stores’ activity. For Apple, it’s about delighting the customer – not just the glitz of well-lit spacious stores with an attractive product range, though of course that helps!
Similarly, banks should stop seeing branches as a pure sales channel. If they use them to start focusing on building relationships, they will improve their brand in the mind of the consumer. In practice, this means not only equipping branch staff with the product knowledge and skills to be able to understand customers’ needs, but also providing them with knowledge of competitor products. Ultimately, this builds trust. Shoppers already have access to online price comparisons and user reviews but, if they trust you, they will visit your branches to have an informed discussion about options. You only have to start with one customer at a time for word to spread – in this world of social media, chatter is much louder than it used to be.
When it comes to sales, it doesn’t matter which team finally closes the deal – so make sure your branches aren’t trying to compete with what you are offering online or through call centres. It is far more valuable to have an integrated offering that treats the customer fairly and gives them a consistent experience no matter which channel they use to reach you – be it through branch, website or call centres. Barclays, for example, has made a first step towards refocusing front-line sales by replacing incentives based on product sales with those decided by customer service scores.
The right staff, the right incentives
Apple is reputed to employ only people who are fans of their products. Could any bank say the same of their staff?
Inspiring your people represents a challenge, but not an impossible one. First, you need to take the time to listen to your workforce. Build pride and rapport by engaging with their values, investing in their education and making a difference in the communities in which they serve and live. First Direct is a good example of a bank that has taken some positive steps in this direction. It began by recruiting staff with customer service rather than traditional banking experience. The bank is consistently rated highest on customer advocacy and loyalty scores.
Another driver of staff behaviour relates to the targets, rewards and incentives you give them. Training at successful retailers includes a detailed philosophy, practice and message, and a focus on the customer. Similarly, banks need to let go of sales targets as key motivators and instead concentrate on understanding the customer in front of them. Some leading mobile phone operators use a real-time SMS feedback mechanism to understand customers’ in-store experience. Both positive and negative feedback is shared with staff to continue development and improve service. Social media also allows for instantaneous feedback, the response to which continues to be a challenge.
Face-to-face shopping on the high street is not dead; it’s just changed forever.
Sundeep Gupta is a financial services expert at PA Consulting Group. For more information, visitwww.paconsulting.com/financialservices