Branches are expensive. They must deliver a rich customer and staff experience that increases awareness of products and services, promotes the brand and creates natural opportunities for staff-to-customer interaction to maximize ROI. The richest customer experience guides customers along a path that exposes them to learning and engagement opportunities. The longer the path the more time and opportunity to communicate and connect. The planning skill is in balancing customer’s desire to feel smart through easy navigation and efficiency in terms of perceived time and effective messaging, learning options, interaction with technology and face-to-face contact.

If the milk (transactions) is at the front, you sell milk. If you place the milk at the back, customers may buy an entire picnic. I want to sell the whole meal.

The milk is certainly not in the back of the store for the customers experience, but more because it is a staple in everyone’s refrigerator across America and markets capatalize on this and the notion that most customers will grab other items as they move back towards the checkout. You are comparing apples to oranges here, but if you insist, yes I would probably buy my milk from a drive thru kiosk if it were available. Perhaps Deibold is working on it!
Paul M. Velandry
Archiceptual

If a financial institution encounters any potential property that is so challenging a branch can’t be designed correctly, then either (A) the existing building needs to be razed, or (B) the property needs to be abandoned and the bank/credit union needs to go find another location.

Site selection is the most critical component to branching success. It’s one of the myriad of factors the article above did not address. If you pick the wrong location, no design will ever save it. If you start with the wrong building, you may not be able to recover costs to redesign it.

Financial institutions who let transactors dictate their branch priorities will suffer. Teller transactions are very expensive to process, and the customers who conduct them are the least profitable. Why should a bank or credit union design its “customer experience” around expensive, unprofitable customers it doesn’t even want?

For those of you in the “customer experience” or “customer convenience” camp, ask yourselves this: Why does every grocery and convenience store in the U.S. put their milk in the back of their stores? Is it because it’s convenient for consumers? Do consumers decide to buy their milk somewhere else because they are irritated when Store X puts it in the back? Do consumers ever think, “I’m going to pass on milk today because it’s in the back of the grocery store?”

While we obviously want the opportunity to engage and cross-sell customers, shouldn’t consumer preferences take more of a front seat? While you’ve addressed consumer preferences to a degree (You point out that the branch design “Common Flaw #2″ is probably a favorite of customers), I’d vote to have the Customer Experience added to your key considerations alongside Design Advantages, Merchandising & Cross-Selling, and Security.

Placing the bucks at the back of the branch is a highly productive concept for most institutions and has been measured in terms of driving higher customer awareness of products and services, cross-selling and share-of-wallet while reducing cost. While this reorganization of elements and the customer path sets the foundation for a more productive customer and staff experience, it is just the beginning.

To get the most out of every branch delivery dollar we need to build a powerful brand experience upon this foundation or it can be a waste time and money. The experience must be unique to each institution and support specific business and market objectives such as Wealth Management, Small Business and Commercial Banking, Mortgage or Consumer Loans and the institution’s true values and interests and culture.

We need to engineer an experience that “wows” customers every time they visit our branches no matter the size, type, location, configuration or budget. An experience that engages their senses and constantly pushes the institution’s relevance to their needs and desires. We cannot just design a great looking branch with the bucks at the back, say we are done and walk away. It is easy to design an attractive branch that gets raves from customers, staff and management for its good looks.

Today, branches are a part of the brand amalgam and one of the key informers of customer’s brand perceptions. Just take a look at what Umpqua Bank and North Shore Credit Union have created in terms of a consistent and unique brand experience across all delivery channels resulting high market awareness, target market growth and ROI.

For significant financial issues, many consumers prefer face-to-face interactions. This is when branches should be viewed as more than just “buck stops. They become “meeting spaces” or “sales offices.” Only around half the staff in the average branch are tellers. The others are (or at least should be) selling- and servicing new accounts and high value services. [Note: This begs a whole new series of questions about staffing, sales and training, but that is beyond the scope of this article.]

Please Note: The article does NOT advocate for remodeling or retrofitting branches to “put the milk in the back of the store.” It isn’t worth the expense to initiate a project just for this purpose. But if a bank or credit union is already considering remodeling its branch(es), and/or planning to merge with another financial institution and absorb its branch(es), then these principles should be applied. And obviously, if you’re building a branch from scratch, then please put the “milk” in the back of the store.

Today, the “milk” is transactions/tellers. What will it be tomorrow? Philosophically speaking, as long as financial institutions maintain physical locations, the “milk” maxim will always be relevant: Locate the thing that consumers need most commonly in the rear of your space while exposing them to other aspects of your brand.

Key Takeaway: Any bank or credit union spending any money building branches, remodeling branches, or taking over another financial institution’s branches should seriously consider putting the “milk” principles to work. If you’re going to remodel a branch, at least make sure you don’t replace an old set of design flaws with new ones. Unfortunately, many banks repeat their own mistakes by applying their flawed design to the branches of the banks they acquire.

Thanks for the great rundown of branch design/layout considerations. I think with the ease of online transactions, people sometimes forget how important face-to-face can be. That being said, I think elegant, strategic design is often overlooked, and can have an incredible affect on customer experience and satisfaction.

Apple is a good example of design/layout of retail space. Look at their stores – dissatisfied with poor layouts and design at retailers, Apple developed their own stores and staffed them with friendly, welcoming staff. The stores’ success shows just how important a well-designed and well-staffed physical location can be in augmenting a great online offering.