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I Bank at Caribou Coffee

Strategically Speaking
May 2, 2012

Brad Dahlman Author: Brad Dahlman,

This past summer I got a home equity line to remodel our kitchen.  I called a friend of mine that started a small community bank.  Dave (my banker) described their equity line products over the phone and we arranged to meet later in the week at Caribou Coffee.  We enjoyed a fine cup of coffee in a relaxed, friendly environment.  I provided him my most recent pay stub and financial statement.  He called me later in the day with a fast loan approval and then suggested we close the loan at my house.  This was perfect.  He could verify the construction and my wife and I wouldn’t need to find child care for our kids, haul them to the bank or leave them in the construction zone (formerly known as our kitchen). 

Dave understands that many clients don’t find it convenient to come into the bank.  He also understands that to interact with clients that “never” visit a branch, he needs to leave the comfort of his office and meet them at a location that is convenient for them.  Simply waiting around the branch for a client to wander in is just not going to work anymore!

Percentage of client using a branch – According to a recent study by, 16% of clients “never”  visit a branch and another 17% only visit once every three months.  This means that  only 2/3rds of your customers see you at your location.

The challenge for many bankers is to develop a strategy to connect to these clients and prospects that never (or rarely) visit a bank lobby.  The old adage from the movie Field of Dreams … “If you build it they will come” was not referring to younger, technology savvy professionals coming to visit your branches.  They simply aren’t coming in your doors like they have in the past and the trend is likely to continue given the various distribution channels available to banking clients today.  Over the past five years, lobby traffic has dropped by over 2% per year; and self-service transactions have increased by over 10% per year.  We have done a great job of making it easier for our customers to transact business with us, but one of the side effects is that we don’t have face-to-face contact with many of our clients.

Don’t get me wrong, I am not predicting the end of branch banking.  Branches will always serve an important need for our clients.  This is the primary channel clients choose when they need to process a more complicated transaction like seeking investment advice, financing a major purchase or even opening a checking account.  But there are a growing number of clients that don’t use our branches.

So the question remains… how are you going to reach out to clients that are no longer coming into your branch?  It will require a purposeful outreach strategy to connect with clients, including getting out of the branch to meet clients at a convenient location.   No bank today has enough resources to reach out to every client, so the key is to segment your client base.

Your most valuable clients, those with profits that rank them in the top 5% of your client’s base, should have bankers assigned to their relationship.  Those bankers should make quarterly outbound calls to each of these top clients to stay connected.  Maintaining a strong relationship with these clients is key to reducing attrition in this important segment.  Why not meet them at a local coffee shop that currently banks with you?

For the vast majority of clients, outbound marketing efforts are the best way to stay connected to these clients that don’t visit your branch.  These clients are technology savvy and use self-service channels, so the natural way to market to them is through these channels (mobile banking/ATM/online banking/text messages).  Sending them direct mail or putting a notice in a statement just doesn’t work in reaching this group.  After all most of them probably have electronic statements.

Changing how we approach clients given the exodus from the branch is a challenge, but with creativity and effort it can be done.

By the way, when we got the equity line account this past summer, Dave also brought along paper work to open my checking account, set up Internet banking, direct deposit and even brought starter checks.  The debit card arrived within the week. 

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