Need a beer? Head to your bank
Forget free toasters—think beer and yoga.
Those extras are among the draws being used by banks to lure customers to branches in an age when checks can be deposited with a smartphone picture and mortgage applications filled out online.
LA’s Morning News’ Lisa Osborn and Phil Hulett talked to MarketWatch Writer Charles Passy:
An Umpqua Bank branch in Portland, Oregon, drew a crowd of 150 last fall with an Oktoberfest-style celebration, replete with pretzels, beer and a strolling accordionist. Such events are part of a larger slate of community events and programs—from yoga classes to dog fairs—that Umpqua offers in its 200-plus branches.
The idea is simple: The more reasons a bank gives customers—or just as important, potential customers—to visit a branch, the more likely the bank will grab a piece of their business. “You take the chore” of going to the bank “and turn it into a pleasant experience,” says Eve Callahan, an Umpqua spokeswoman.
The idea is spreading, as banks aim to reshape themselves from transactional hubs into more like community centers. The driving factor: Many customers never set foot in branches any more—even to visit an ATM. A study by Financial Management Solutions, Inc., a Georgia-based research and consulting firm, found that monthly teller transactions at community banks and credit unions plummeted 40% from 1992 to 2012.
Oregon-based Umpqua Bank has held Oktoberfest-style beer events and hosted yoga classes. Here, a children’s theater group offers a free performance. But banks remain dependent on branches to pitch services: The customer who walks in to cash a check—or get a free scoop of ice cream—may walk out with a car loan. And those marketing opportunities don’t translate as well in the online and mobile worlds, where customers are apt to remain focused on the transaction at hand, says Will Weidman, vice president of Applied Predictive Technologies, a software and analytics company that works with financial institutions. “Banks have not cracked the other channels as a means to cross-sell,” he says.
The new approach is similar to the Starbucks model. In some instances, it can be as basic as providing free coffee and Wi-Fi, or in the case of TD Bank, free coin-counting at “Penny Arcade” machines. Other banks are opening up their spaces for community meetings, or hosting their own classes and seminars.
Connecticut-based Connex Credit Union has held events for first-time home buyers and for seniors grappling with understanding Medicare. And Philadelphia-based Beneficial Bank set up financial libraries within its branches, so customers can read up on any number of money-related topics. In the process, Beneficial CEO Gerry Cuddy says, the bank hopes to create a “stickier” relationship with its clients.