The Bank Branch Blues

The key to success is to get out into the store and listen to what the associates have to say. It’s terribly important for everyone to get involved. Our best ideas come from the clerks and stock boys.”u00e2u20ac”Sam Walton

One of the biggest mistakes bankers make is they don’t build a culture in which senior management can obtain regular, direct feedback from front-line employees. This mistake is particularly debilitating to an organization as it grows larger and larger and its executives become more remote from its customers.

The reason that Wal-Mart has grown into such an astoundingly successful company, in my view, is that Sam Walton never fell into this trap. Tellingly, there’s no national banking organization that’s as dominant in banking as Wal-Mart is in retailing. One reason why, I believe, is because the senior management teams at most banks are not maniacally focused on the details of their retail business.

I can testify to this from firsthand experience. My firm makes a habit of shopping bank branches as we travel around the country. The highlight of our mystery shopping year, though, is the annual “branch hunt” we conduct each spring on the Upper East Side of Manhattan. We divide into teams, stopping in at every retail financial services outlet we come across.

What we find is worse than depressing. The design of most of the branches we visit is off-putting at best, and the service generally varies from inattentive to downright surly. Sales cultures? They’re usually nonexistent. If the CEOs of the banks we visit ever accompanied us, most would be appalled.

There are exceptions, of course. Commerce Bank of New Jersey, a relative newcomer to the Manhattan market, consistently stands out as providing the best customer shopping environment and customer service. Not coincidentally, the company’s senior management, from the CEO on down, actively monitors the quality of Commerce’s customer experience by regularly visiting branches. In addition, Commerce uses outside firms to help in the process.

But Commerce is the exception. Here are some highlights (or, rather, lowlights) of our 2004 branch hunt:
The filth. It is astonishing that any bank would expect customers do business in spaces that are so out-and-out dirty. Some branches had ancient, threadbare carpeting and needed a coat of paint. Others were simply littered with trash. Unspoken message: We’re sloppy and disorganized.

The unthinking standardization. At some banks, branch initiatives are being promulgated from on high, without taking into account individual branch circumstances. The results can be ridiculous. Here’s one example: It’s fashionable among banks lately to place TVs in branches for customers standing in line. But TVs don’t help in every branch. One branch we visited of a national player was in a smallish basement. Into this cramped space the bank had placed a single television positioned so that no one in any of the teller lines could watch it without facing backward. I’m sure the branch manager was instructed to install a television by a superior somewhere up the line, and put it in the easiestu00e2u20ac”but most ineffectiveu00e2u20ac”location. Unspoken message: We don’t care much about the customer experience we provide.

The lack of attention to basic customer needs. We walked into one branch that had a battery of nine ATMs in the frontu00e2u20ac”and a customer standing in front of them mumbling, “It’s not working . . . They’re all not working.”

Unbelievably, he was right! Each ATM had a sign on it saying that all the ATMs in this particular branchu00e2u20ac”and in three nearby branchesu00e2u20ac”would be “down” all day Friday and Saturday as part of an ATM upgrade program.

Now, did this bank really need to take down every ATM all at once for the sake of an upgrade? And if it did, was a taped-on sign the best way to communicate this inconvenience to its customers? Not a chance. Unspoken message: Customer needs are at the bottom of our priority list.

Follow-up? Forget it! Two people in our group posed as a highly affluent couple to an investment consultant at a branch in a ritzy neighborhood. Despite a long, pleasant conversation, during which our people imparted a lot of juicy financial information, the IC didn’t even ask the couple’s names, let alone their address and phone number. Instead, he simply trusted that they’d return when they opened their checking account. Unspoken message: We’re lazy!

After a day of branch shopping, we understood more than ever why most big banks aren’t rolling over their local competition. How can a bank turn things around? For starters, every member of a bank’s management should ask: Do we do enough to monitor and inspect each of our primary customer-contact sites? I guarantee that the bigger the banking company, the fewer of the company’s managers who will answer “yes” to that statement.

No matter what your bank size, providing outstanding customer service requires an attention to detail at the individual store level. Sam Waltonu00e2u20ac”and his successorsu00e2u20ac”understood this. The lesson: As you grow your bank, don’t forget to think one store at a time.