As members struggle to come to terms with a “new normal” in retail banking, there are many difficult questions to answer around the form, function and focus of branch networks. In particular, what role for Full Time Employees (FTE), by the far the biggest “bricks and mortar”-related expense? Here, as in other areas, practitioners must carefully balance tactical time-to-market priorities – in this case, getting your staff to do the things that matter most, now – against more long-term strategic priorities, such as ensuring your staff are able to do the things that will matter in 3-5 years.

On the “here and now” question, The Council’s Branch Salesforce Productivity Accelerator offers actionable insight. Based on survey responses from over 20,000 front-line bankers across 7,000 different branches, we identify the key characteristics of high performers versus core performers across crucial dimensions of in-branch activity, including:

• Defining the Optimal Branch Sales Role
• Building a Succesful Coaching Programme
• Hiring and Developing High Performers
• Generating News Sales Opportunities and Leads
• Learning from High Performing Branch Bankers

Re-orientating your core around these principles  is proven to drive considerable revenue uplift. Yet looking out across the next 3-5 years these skill-sets will clearly not prove “future-proof”. For one, declining and increasingly transactional footfall in-branch will  diminish opportunities for reactive sales, a key driver of sales according to our data. Likewise, a more self-directed, social-media savvy consumer will test the effectiveness of  in-branch advisory support, another important sales driver.  Yet whatever shape the branch finally takes, teaching and serving customers broadly construed looks set to remain an important constant. In a branch-based, on-line or genuinley multi-channel world it will remain the one true path to successful sales.

As we approach the second half of the year, the Council team is focused on ways to best serve our membership. We are excited to be able to offer a range of access points and resources to help your organization get the most out of its Insights membership.

• Leverage our website which houses searchable databases of all CFC studies, topic-specific resource centers, and regularly updated consumer data on financial outlooks and banking activities by region.
• Read our weekly newsletter and blog to learn of weekly updates on research, education on resources, and industry commentary to help members understand and access industry analysis.
• Send questions directly to our research staff for customized advice on best practices and resources for specific challenges.
• Hear peer views by asking questions to a web forum of other CFC members.
• Connect with other members and learn research firsthand at our Executive Insight Meetings.
• Stay abreast of current research initiatives through our webinar series.

In addition to these resources, the Council now drives decision-making through a combination of best-practice industry research and proprietary data sets.

• The Consumer Financial Monitor, a quarterly survey of over 18,000 consumers, tracks sentiment and product demand.
• The Branch Salesforce Productivity Accelerator, a survey of 20,000 frontline bankers from 7,000 branches offers key factors to make proactive sales efforts more effective.
• Our Multinational Customer Experience Survey provides analysis of changing consumer banking channel preferences and uncovers primary reasons why banks fail to convert serve into sales both through the branch and online.
• The Post Crisis “Boomer” Opportunity unpacks how the financial crisis shifted expectations and behaviors of this segment and separates the analysis of mass market, mass affluent, and high-net-worth sub-segments.

We invite you to visit our updated website. Our continued investment in web capabilities is designed to help our members maximize our value and find meaningful solutions in our extensive databases, resources, and quantitative insight pages.

90%: That’s the percentage of the over 30 banks who took our recent social media survey that said they have a presence on social media. As banks move toward a fuller embrace of social media, it is imperative to understand the customer’s experience through the medium and the role its increasing role in financial decision making. CFC’s global survey of social media users shows that social media plays a big role in addressing and confirming life and purchasing decisions around financial services.

In short, the decisions that were once taking place in branch lobbies are now being made through personal social network conversations.

Our series of surveys on social media in financial services are designed to help banks answer essential strategic questions about customer experience: What type of people use social media? What are the behavior patterns and personality segments that emerge through the medium? What are the key questions–and resulting actions–that social media plays a part in?

For our members, we now release country-level data on customer social media use for financial services:

• Australia
• Canada
• Singapore and Malaysia
• United Kingdom
• United States

As members refine their strategies and seek to understand trends in banks’ social media initiatives, we can also offer a glimpse into the social media strategies at 4 leading firms in “From Innovation to Launch: Social Media Experts Speak about their Ongoing Initiatives“–featuring insights from RBS, Fulton Financial, SmartyPig, and Umpqua.

The combination of shifting economic outlooks and rapidly changing expectations around technological access will impact every aspect of consumer banking–from how consumers access financial services, to what products they demand, to what they seek in relationships with their banks. As the chart to the left shows, mature markets will continue to face tepid outlooks on personal finances. On the other hand, consumers in emerging markets show exceptional optimism. To meet these new economic circumstances, banks must re-define “financial engagement” and carefully consider how new technologies will impact the future shape of customer relationships.

Through market research of emerging technologies and global survey data of 20,000 consumers, Transformative Forces demonstrates that:

• Fewer than 1 in 4 customers budget their finances: this represents an enormous opportunity for banks, as even informal budget creation leads to confidence in personal finances, which in turn links directly to product sales.
• Consumers in mature economies report ample access to financial services, but the lowest financial confidence in the world–meaning that winning strategies are not about having more access, but about creating stronger engagement through that access.
• Social media and technology are empowering consumers to receive the advice and expertise traditionally housed in a branch through non-traditional networks–threatening to turn banks from relationship centers into merely cash registers where sales are completed.

Opportunities await in this new economic and technological ecosystem, but success will require innovative approaches to partnerships and a willingness to re-imagine customer relationships. By examining key innovations in customer interactions, disruptive technologies, and areas of emerging demand, this study will help our members serve the post-financial crisis customer. Our members can read “Transformative Forces” by downloading it here.

We estimate that consumers’ lack of confidence in financial services providers left as many as 63 million financial products unsold across Europe and North America in 2010.  When asked to rate providers on dimensions critical to trust in financial providers, respondents, who included 18,500 consumers across 24 countries, expressed low confidence in financial providers.  They believe institutions lack shared values, have an inability to provide helpful guidance and advice, and offer overly complex product suites.  Unfortunately, our findings indicate that low consumer confidence in these attributes suppresses product purchases.  Customers with higher confidence, in turn, are more likely to purchase.  (CFC members can access the global survey findings).

If there is one clear theme running through recent bank earnings releases it is that most financial institutions have a revenue problem.  While some of the revenue pressure sits outside of direct industry control, financial institutions can influence sales by helping customers feel confident about their money management decisions.

Repairing the Relationship

We suggest that institutions wanting to capitalize on product sales—and revenue—left on the table in 2010 begin working to rebuild trust with consumers in 2011 by:

1. Becoming a money coach: Put a personal budgeting tool in consumers’ hands that will automatically plug in transaction and balance information.  View examples of money management tools.
2. Being courageous: Be transparent about pricing and tout the value of products.  Institutions need to remind customers of the value and convenience of core products and provide a rationale for the fees associated with them.  Read CFC documented pricing and activation strategies
3. Listening to customers: Equip staff with simplified sales processes that incorporate the lost art of listening to customer concerns and needs.  Review examples of frontline execution support

Banks are struggling with lofty sales goals amid disengaged customer bases. To counteract negative customer outlooks, Wen Bank’s (a pseudonym) sales staff focused on providing a list of concrete suggestions that save customers money or time before attempting any sales. Through this simple strategy, they earned the right to sell while gaining rich customer insights.

The Challenge: Wen Bank wanted to improve both the quality and quantity of sales. Rather than chance proactive marketing contact, where customers are difficult to reach and engage, it sought to take better advantage of the revenue opportunity presented when a customer enters the branch.

The Solution: The greatest challenge was to move sales staff away from the instantaneous selling mentality. Instead, the bank taught them to earn the right to sell by educating customers on subjects like where they could make greater use of products they already owned, earn more points, or qualify for premium services. Through conversations focused on better uses of current accounts and products, sales staff could easily identify new areas of need, useful customer information, and insights into possible improvements on product offerings.

The Result: By adopting a service-to-sales approach focused on education, the bank saw significant increases in customer retention, improved customer product usage, and–because sales staff became better in-tuned with customer needs–developed a stronger product innovation insights process.

Our members can read this complete case study on our website.

What makes a sales force productive? CFC surveyed 20,000 bankers to find the key differentiators between top performers and core staff. The results provide our members with a picture of what a top performer looks like:

• Top performers gain greater leverage from reactive selling
• Top performers spend more time with customers
• Top performers spend less time preparing for calls, but are still more effective than their counterparts

If core performers are given strong guidelines around time allocation for call preparation and actual customer outreach, they can begin to replicate top sales staff. The key: it’s about working smarter, not harder. As our study shows, through small, habitual changes, core performers can deliver dramatic lift toward sales goals.

To understand all the characteristics of top performers, our members can read our profile of ”High Performing Branch Bankers.”

A new consumer segment is emerging. This segment, characterized by social media prowess, is strongly influenced by a new, global bank called “The Shadow Bank.” Haven’t heard of it? Your customers have, and they are turning to it for advice.

In the last two weeks we introduced the concept that social media savvy customers are more proactive with their financial management, and that consumers who proactively manage finances are more likely to purchase. In other words, social media and financial engagement go hand-in-hand–meaning banks cannot afford to ignore social media or the vital consumer segment it is empowering.

The new segment is armed with advice from a bank other than ours. They come to us pre-advised by the large and growing information network we have termed the “Shadow Bank.” Nearly overnight, the Shadow Bank has market share that rivals the largest consumer banks in the world.  Social media has not just created a new channel for us to consider, it has created a new competitor. Read More »

Consumers who use social media are two-times more likely to proactively take actions such as shop for a new bank, and move balances between banks, versus a less connected consumer.

We told you last week that consumers who proactively manage their finances are more likely to purchase financial products and report much higher satisfaction with the products they purchase. Social media is now a key area where customers are now engaging with their finances.

How are people engaging with banks through the social media world? In the Council’s recent survey of over 3,000 banking product consumers, over 30% reported using social media to communicate and learn about banking related issues.  More specifically,

• 18% of consumers are sharing frustrations
• 17% are using their networks to aid in financial decision making
• 12% are making bank recommendations to others.

But the implications are more important than you may think. Learn more about the social media savvy customer and the ways in which they interact with their bank by reviewing early findings from the Social Media Consumer Survey or by joining our upcoming webinar on 20 April or 28 April.

The Council recently surveyed over 20,000 frontline bankers from across 7,000 branches.  Initial analysis shows that banks that have a sales process that is easy to remember and follow best equip staff to sell and are therefore have the most productive bankers (measured by deposit and loan balance growth and “widgets” sold).  As executives seek to provide advice at the frontline, there is a seeming paradox between the inherent complexities of advisory interactions and the frontline’s need for simplicity.

A comparison of banks where branch bankers feel well-equipped vs. banks where they do not.

Few institutions have managed to solve this paradox.  Most simply focus their staff on needs-based sales or employ expensive advisors who have licenses to sell investments. 

Benson Bank (pseudonym) proves that mass market advice is possible by creating a process that helps customer compare their financials to peers and recommends solutions that help customers feel encouraged when they leave the branch.  Customers that go through this process are much more likely to consolidate their banking relationship with Benson and typically have three times the level of savings and investment balances than customers that do not.

CFC members can download the full case study, “Mass Customized Advice.”