Community Bank Growth Strategies

community bank growth strategies

We know community banks. To develop our community bank benchmarks, we survey nearly 3 million bank customers every six months to find out what community banks are doing well and where they’re faltering.

  • We know, for example, that it’s not enough to just be active in the community if you aren’t making sure consumers know what you’re doing to be active – through social media, in-bank marketing efforts, and local visibility.
  • We know that at any point in time, 50-70% of bank customers are ready to switch banks – and we know the top ways banks can keep their customers loyal.
  • And we know that for most community banks, it can be more lucrative to focus on attracting women as bank customers, who are more adept at using bank technology and have a greater lifetime value than their male counterparts.

Community Bank Opportunity

Whether you’re the community bank manager or marketing officer, one of the things you’re charged with is growth. We know that explosive growth is possible when there are more than 3 million bank customers are up for grab in the northeast. Whether actively looking or just waiting for the right offer to show up, millions of bank customers in the northeast are not loyal enough to the bank they’re with to prevent them from switching. The same is true for about a third of business customers.

How can you keep your existing customers loyal and attract new customers looking for something better?

While it varies from state to state and region to region, there are some key areas that we find can benefit every community bank when done well.

Show Up in Your Community

You can’t just sponsor the local baseball team and call it a day. To really show up in your community, you need to actually be a part of it. When you’re serving your neighbors and know them and what they need, you can do a better job of making them feel like you’re there for them. You need to demonstrate that showing up – through sharing posts on social media, through being present during community functions, and more.

Level the Technology Playing Field

Community banks have access to the same technology consumers want that big banks have. You can offer online banking and photo deposits and mobile banking. No customer even questions that capability. But you have to follow through and make sure every single employee knows how to use every single technology you offer. It’s as much about your own employee buy-in to the tech as it is about the tech itself.

Focus on the Experience

Bank customers can walk into any bank and get an unemotional, transactional experience. Set yourself apart. Make sure when they walk into your bank, they feel like they’re at home. Be a part of their community. Give them a reason to walk through the door (fresh popcorn, suckers for kids, welcoming smiles from the staff, community events hosted on site). When you give them a reason to feel good about being in your bank, you give them a reason to keep banking with you.

There Are a Million Ways to Grow Your Bank – But You Have to Know What Customers Want

Increasing your customer base, decreasing costs, improving loyalty, cross-selling and upselling products are all standard ways to grow your community bank. But knowing what really resonates with your customers and potential customers is essential for making sure you’re putting your efforts in the right place. Your customized banking benchmarks can provide all the insight you need to understand your bank and your competitors better so that you can adjust your efforts to be more effective. Contact us today for more information.

What the Best Community Banks Are Doing Right

Every year, we have the honor of presenting the Banking Choice Awards, in which the top community banks and credit unions are recognized for providing outstanding service to their customers and members. The New York Banking Choice Awards were announced in April at the Banking New York Conference, and on June 28, winners will be announced for Connecticut, Massachusetts, New Hampshire and Rhode Island at the Best Bank Expo.

The Banking Choice Awards are based upon the results of the Banking Benchmarks®, the largest and most comprehensive measure of banking customer experience in the world. The Benchmarks are independent of any financial institution and conducted by Customer Experience Solutions.

Our banking benchmarks delve into 53 different metrics about each institution customers use for banking services. These include the metrics used for the Banking Choice Awards: Overall Quality, Customer Service, Tools & Technology, and Community Contribution. Rankings for Overall Quality, Customer Service, and Tools & Technology are based on people’s responses concerning their primary banking institution. The final category, Community Contribution, is based on the responses for institutions that they are aware of but do not currently use, making it a reputation-based ranking.

There are consistencies among the winning community banks that can be used as a guide to improve your community bank CX:

Community Involvement

Community Banks who earn Banking Choice awards are among the most active in their communities. But they’re not just active – they know how to make sure their community involvement is visible to the community so that the people they serve are aware of the efforts they make to support them. Our surveys show that when a community contribution is accompanied by marketing spend to promote it, the impact to the bottom line can grow by more than 350%.

Technology

Winning community banks not only offer the same technology to their customers as larger banks but also have ensured their employees are trained to use it and can help members navigate it – without losing the personal touch that sets them apart. Staff training is typically one of the top reasons that people decide to switch banks, according to our benchmarks.

Personalized Service

Banking choice award winners are adept at providing exceptional customer service. They pride themselves on their ability to know their customers well, make more informed and faster decisions to help them with their financial needs. They know their customers. 

Customer Experience

What we’ve learned from our benchmarks is that not even better rates can pull a customer away when they feel valued and listened to by their community bank. In fact, customer experience is the most important differentiator. Customers will pay more for better service.

You Can’t Take Advantage of the Opportunity without Knowing Where You Stand

With 1.24 million customers ready to switch banks, there is a lot of opportunity for community banks and credit unions to grow, but it’s going to take not only delivering on customer experience but knowing where your bank stands in comparison to your competition. When you know what your customers and prospects think of your bank, you can make informed decisions to attract more loyal banking customers. Request your benchmarks now.

Community Banks and Credit Unions Can Gain Market Share with 1.24M Households in Play

Community banks and credit unions have a lot of opportunity to grow their market share, according to our most recent benchmarks. Whether it’s through growing loyalty or demonstrating a better understanding of gender differentiation in bank marketing,  opportunity abounds.

In New Jersey and Pennsylvania, there has been a sharp rise in the amount of market share in play. A shocking 1.24 million households across New Jersey and Pennsylvania are currently looking for a new bank. Two-thirds of bank customers in this region are up for grabs. This represents enormous potential for the savvy community bank or credit union manager who takes the time to understand why they’re unhappy where they are – and of course, it represents a big risk for those institutions that will be losing more than their fair share of current customers.

The most important differentiator community banks and credit unions have is their ability to deliver an excellent customer experience. When bank customers feel valued, listened to, and cared about at their bank, not even better rates can pull them away. This isn’t just speculation – it’s backed up by the numbers. Just like today’s retail consumer and today’s traveler, today’s bank customer is willing to pay more for a better customer experience.

What Does Today’s Bank Customer Want?

Our benchmarks are a massive scientific study across several states in which we interview hundreds of thousands of consumers and businesses about the banking institutions they use, asking them to evaluate each of the banks and credit unions they use on 53 different metrics. Today’s bank customer:

  • Expects your community bank or credit union to have the best technology and be as innovative as big banks
  • To deliver a more personal and more customized experience in which they feel known, recognized, and valued
  • To have a consistent experience across all touchpoints

What Don’t Bank Customers Want?

Bank customers don’t want runaround. They expect your staff to know how to use all of your product. They don’t want to repeat themselves because they called in, then visited a branch. They don’t want to work with poorly trained staff who can’t answer their questions. Read more about avoiding customer flight in the winter 2019 edition of Banking Mid Atlantic.

You Can’t Take Advantage of the Opportunity without Knowing Where You Stand

Our latest benchmarks make one thing clear: There is a lot of opportunity for community banks and credit unions to grow, but it’s going to take not only delivering on customer experience but knowing where your bank stands in comparison to your competition. When you know what your customers and prospects think of your bank, you can make informed decisions to attract more loyal banking customers. Request your benchmarks now.

Gender Differences in Banking

gender differences in banking

Our latest benchmarks revealed some interesting gender differences in banking: Women across the Northeast are about 10% more likely than men to prefer electronic banking over branch or phone. Furthermore, they are better at their male counterparts at figuring out how to use the tools, and they are moving more rapidly away from the branch. 

What does this mean for your bank?

If you are thinking of upgrading your online or mobile technology, you might want to keep Jane Q. Public in mind (rather than John Q. Public). As a community bank or credit union trying to attract additional bank customers, these kinds of insights are invaluable for making strategic decisions about where to invest in your bank.

Women generate more ROI

The lifetime value your bank customer varies by gender; the average lifetime value of a female customer is $308 higher than that of a male. Women are also more likely to consolidate all of their banking and remain loyal to the bank. 

For more insight into gender differences in bank customers, read Bruce’s article in Banking New England Jan/Feb 2019. In the article, he discusses why community banks and credit unions need to make sure they are doing what they should to cultivate female customers.

Banking New England takes a look at both the importance of women as bank customers and how banks can solve the gender problem in leadership.

Customer Experience Solutions analyzed over a half million reviews from men and women to discover differences by gender in banking across the region.

Request your benchmarks now.

The Factor that Impacts Bank Customer Loyalty the Most

The latest Banking Benchmarks came out the end of January, and there were clear indicators about overall banking strategies community bank and credit union managers should employ to maintain and grow in their markets. To understand where your bank specifically rates and ranks vs local competitors, be sure to request yours.

The One Factor that Determines Loyalty Above All

The most recent Benchmarks reflect that the most important differentiator community banks and credit unions have is their ability to deliver excellent customer experience.

CESCX Bank Customer Loyalty

Out of more than a million reviews, only about one-third of households and business can be classified as loyal. Loyalty is down significantly over the past 18 months. 

How Do We Measure Bank Loyalty?

Loyal consumers are those that have given the vast majority of their banking business to just one bank and are planning on giving the vast majority of their future business to the same bank.  These are customers or members that, barring any big unexpected problems, are going to be with you for at least the next 5 years. Statistically speaking, it is impossible to predict out longer than 5 years because of vagaries in the economy, people moving, changing jobs, etc.

What Can My Bank Do to Improve Customer Experience?

To improve your community bank customer service experience and generate more loyalty from your bank customers, we recommend this 7-step approach:

1. Compete with technology.

Customers expect even the smallest banks to compete well on technology. It’s an expectation, so if you fall short, you will lose share. But because technology is so ubiquitous, it also cannot be what you hinge your differentiation on. You need it, but you need more.

2. Consistency from every touchpoint.

No matter how your customer reaches you – phone, website, drive-through, walk-in, phone call – every experience should feel seamless and focused. Everyone should be on the same page about your services, and every single person who has any potential of coming into contact with your customers should deliver exceptional customer service and know how to use all of your technology.

3. Make your bank customers feel welcome.

Don’t forget the community in your community bank. When customers do walk in, they aren’t looking for an austere, corporate climate. They want smiling faces and people who know them by name.

4. Your employees should know how to bank at your bank.

As we interviewed thousands of banking customers, we discovered that staff training is typically one of the top reasons that people decide to switch banks.  Your staff – all of them – should be able to answer questions and demonstrate a clear understanding of existing technology.

5. Build a culture of customer service.

Nearly all bank managers think they prioritize service, but our surveys reveal that at least a third of customers report getting the runaround. Getting the runaround is a major reason households and businesses tell us they want to switch banks. Customer service has to be a culture in your bank from the top down.

6. Get personal.

What sets community banks and credit unions apart from big banks is that they can compete technologically while still being personal. When your banker is also your neighbor, has kids in the same schools, and understands the challenges of your specific community, it makes a difference.

7. Community involvement.

The customer experience is driven by your involvement in the community. Sponsor local teams and celebrate regional traditions. Reinforce that you are an important part of the community. And take every opportunity to promote what you do. Our surveys show that when a community contribution is accompanied by marketing spend to promote it, the impact to the bottom line can grow by more than 350%.

Want to know the specifics about your bank?

To understand where your bank specifically rates and ranks vs local competitors, be sure to request your benchmarks.

Customer Experience Solutions Benchmarks Highlighted in Banking Mid Atlantic

As the most recent banking benchmarks reflect, the most important differentiator community banks and credit unions have is their ability to deliver an excellent customer experience. When bank customers feel valued, listened to, and cared about at their bank, not even better rates can pull them away. Unfortunately, only a little more than one-third of the banking customers surveyed (over one million responses) are “highly loyal.”

This means two-thirds of banking customers throughout the northeast market are looking for a new bank. To make sure your customers aren’t the ones looking – and to attract the ones who are looking – you need to understand what your customers and prospects think of your bank.

New benchmarks are now available – request yours now.

Read the highlights about New Jersey’s and Pennsylvania’s banking benchmarks in the winter 2019 edition of Banking Mid Atlantic.

 

 

Consumers Are Looking for These 3 Digital Banking Services

Community banks have a lot of advantages over their larger counterparts, but that’s no reason to slack on technology. Regardless of the size of the bank, consumers expect certain digital banking services. Luckily for smaller banks and credit unions, the latest Benchmarks reveal that most households and businesses assume smaller institutions have about the same quality digital tools as the largest banks. Beyond delivering amazing customer service and employing strong community engagement practices, be sure these digital banking services are up to speed:

  1. Mobile Banking

A rapidly growing percent of consumers want everything accessible on a mobile device. The latest CES Banking Benchmarks reveal that 64% of consumers expect to increase their mobile and online banking in the next 12 months. Although you want your customers to feel comfortable coming into the branch, they shouldn’t have to come in for routine transactions if they don’t want to. Remote transfer, bill pay, and remote deposit have grown by up to 35% per year at some of the more proactive institutions. Person-to-person (P2P) payments are also more popular than ever, with friends using Venmo and PayPal to cover a shared cab rather than exchange cash. It’s essential that your mobile app can communicate with the preferred apps of your consumers, making every monetary transaction as easy as possible.

  1. Financial Planning

Consumers want more from their bank than the exchange of money. Financial planning is high on the list of what community banks should be offering, and this shouldn’t be limited to an in-person visit with a representative. Give your consumers the freedom to use files stored on their personal devices to make comparisons with your website or app. Budgeting, loan calculators, and tax preparation are only a few financial planning tools that are valuable to your customers. And once they start using these tools with your bank, they are far more likely to use your value-added services in the future.

  1. Online Account Management

Community banks can’t afford to forget about basic account management services. There’s nothing more annoying than having to fill out paperwork for something like a change of mailing address when it should be something the customer can do online. Allow your consumers the flexibility to make changes to their account digitally, without the hassle of paperwork or a trip to your branch. It should be easy to change contact information, switch mailing addresses, and check balances of different accounts. It may seem like common sense, especially since convenience is valuable to your consumer base, but these basic functions are often overlooked or not properly developed.

Bank technology is easily available, and it doesn’t take much to implement tools that make a difference to your customers.  An oft-forgotten aspect of employing banking technology is how important it is to educate your own employees on how to use them.  If your employees do not know how to use the technology you offer your customers, you can be assured that your customers question how good your bank really is if the employees don’t know how to bank there. During the interviews CES conducts for the Benchmarks, we see thousands of comments from customers who question the quality of their bank when they believe the bank’s staff themselves are not expert users of the banks’ technology.

An investment in digital banking services is no longer an option if your community bank wants to remain competitive. Community banks should always leverage their unique position as a member of the local community, but they must also deliver the level of functionality consumers expect from every bank large or small.

There is enormous opportunity for you to grow your community bank or credit union, but it starts with knowing what existing customers and prospects think of you compared to your competitors. Take action now and request our benchmark study for your region.

7 Secrets to Providing a Better Community Bank Customer Experience

Technology has done much to level the playing field between big banks and small community banks and credit unions. Digital interfaces are available to every business, regardless of size, which leaves the battle over customers to be fought in a different realm. It is customer experience that is more important than ever, and community banks need to leverage from these 7 secrets, to gain advantage over the competition.

  1. Don’t fear technology.

Big banks have done the hard work of mainstreaming technology, so don’t let this be your downfall. Technology assists in providing customers with the integrated experience they expect from businesses, and your bank is no different. Even the smallest bank or credit union is more than capable of capitalizing on the software that is available in the marketplace.

  1. Unify all touch-points.

The customer experience is not linear. Customers may complete a single financial task using multiple touch-points, and they all must connect seamlessly. Those who use your bank should be able to access their balances easily via mobile app, discuss financial decisions with an expert by phone or at a physical branch, and keep track of their finances on a desktop computer. Every form of communication needs to be instantly responsive to the needs of every customer.

  1. Create a comfortable atmosphere.

Digital components to your community bank are crucial, but the atmosphere of your physical locations still matters. Even as you integrate each touch-point, you  want to avoid making your community bank feel like a sterile government office. When your customers do pop in, they want to feel welcomed. Lighting makes a huge difference, and you could easily swap stiff chairs for comfortable couches and friendly décor.  Some leading institutions are even experimenting with olfactory ambiance to help customers feel more comfortable.

  1. Empower through training.

Staff training is often what makes the difference between a growing business and a dwindling one.  When we interview hundreds of thousands of banking customers, we learn that poor staff training is typically the #1 or #2 reason that people decide to switch banks.   When your employees have and understand all the relevant product and service information about your community bank, they can better serve your customers. Staff should be able to answer customer questions, and with a solid understanding of existing technology, your staff can teach customers how to search for answers that they don’t readily have.

  1. Build a culture of customer service.

When the customer is central to every process, your staff can provide superior customer experience. This tenet starts at the top, with upper-management implementing processes that enable frontline staff to solve issues immediately for customers, rather than always having to refer the problem to a manager.  Our surveys reveal that 27% of customers report getting the runaround when trying to get questions answered.  For businesses, this increases to 35%.  And in both cases, getting the runaround is a major reason households and businesses tell us they might switch banks.  If you prioritize the customer and their experience from every angle, you achieve an approach that naturally eliminates most of the problems they face.

  1. Personalize your service.

Your overall infrastructure may be amazing, but customers need help marrying their needs to your products and services. It is not a case of “If you build it, they will come.”  Community banks are in an amazing position to be able to learn about the unique needs of their patrons, and then provide them with the tools and advice to meet those needs. A familiar smile, remembering their names, and recalling that they are in the process of purchasing a home, for instance, can build lifelong relationships.

  1. Contribute to the community.

The customer experience is driven by your involvement in the community. Many customers want to know that you are aware of what is relevant to those that live there. Sponsor local teams and celebrate regional traditions. Reinforce that you are an important part of the community.  This will improve your own customer loyalty and will actually attract more business, especially from middle market and small businesses in your area.  And do not feel shy about promoting your good works.  Our surveys show that when a community contribution is accompanied by marketing spend to promote it, the impact to the bottom line can grow by more than 350%.

Community banks and credit unions have unique strengths. If you want to offer a truly impactful customer experience, you have to offer personalization that is also convenient. Your frontline staff must be fully trained and confident enough to offer financial knowledge in addition to providing account services.  Your electronic banking should be an extension of that service, not a replacement for it.   A concerted, thoughtful examination of your processes, and more importantly, an unblinking understanding of your current customers’ opinions of the bank will enable you to excel beyond your peers.

Winners & Losers

2.28 Million Northeast Households and Businesses to Switch Banks this Year

Banking New England Sept/Oct 2018
Published on Oct 16, 2018

In this special marketing issue, learn how to optimize your mobile site, understand why customers can be easily enticed to switch banks, and get an inside look at the New England Financial Marketing Association conference, featuring an article by Bruce Paul.

How Community Banks Can Capitalize on Advantages to Beat Big Banks

Community banks are constantly competing against big banks. To remain relevant, it’s critical that community banks find and capitalize on the competitive edge their unique positions offer. It’s impossible to play the same game as big banks and expect to win. However, with a unique strategy that leverages the advantages offered by community banks and credit unions, customers can be drawn to a local choice.

Community banks can offer customized services for a better banking experience.

Larger banks do what they can to provide a well-rounded service, but it’s a cookie-cutter approach that forces local branches of large banks to conform across regions, not taking into account differences in the local communities they serve. Large banks are rarely attuned to the needs of the individual banking customer, focusing more on quantity than quality. But customers of every generation, from Baby Boomers to Generation Zers, want a trusted financial advisor. They don’t want a pamphlet on services or a web page on APRs. They want their bank to know who they are and what they personally need to do to improve and manage their finances.

Continue reading “How Community Banks Can Capitalize on Advantages to Beat Big Banks”