There are pundits in the financial industry who believe branches are dead. Most financial marketers, however, acknowledge that branches are not going away anytime soon, and that teller-based transactions will continue to occur — at least to some extent — for the foreseeable future. If your financial institution is among those sustaining its investment in branches, then there are some critical questions your senior leadership team should address:
- When you build a branch, is it designed strategically? Or do you simply duplicate what you’ve always done?
- Why do you use the layout(s) you use? What design decisions were made and why?
- If you only need 2-3 tellers 90% of the time, then why do you put in 8+ teller stations?
- Do you follow branch trends and study best practices? Or do you just hire some local architect to make something that looks and feels like a bank should?
Reality Check: Financial institutions are lousy retailers. They make many retail mistakes, starting with the basic layout of their branches.
Among the many lessons banks and credit unions could learn from retailers is the maxim, “Put the milk in the back of the store.” The underlying rationale is intuitive: Drive consumers past everything else you sell as they make their way to the one thing they need most often.
“Put the milk in the back of the store.” Duh, right?
Despite the fact that this expression is practically a cliché, the vast majority of financial institutions completely ignore it. They put their tellers (the “milk,” as it were) everywhere except for where they should — even including right by the front entrance!
This article examines the advantages of applying this basic retail principle and why financial marketers should locate teller/transaction areas in the back of their branches. Three different floor plans are presented, each demonstrating common flaws financial institutions make when designing their branches, followed by two examples where the “milk is in the back of the store.”
Common Flaw #1: The Split
In this familiar layout, the entrance opens into a shared common area (green), which divides the Transaction Zone (orange, left) from the Sales & Service Zone (red, right). Four Tellers sit across sit across from two sit-down Service Representatives and a modest waiting area. The design intent is to isolate the noisy hustle and bustle of high-volume transactions from the quiet privacy of consultative sit-down spaces.
Design Flaw: Unfortunately, the reality is that customers perceive an implicit barrier (indicated by the black-and-yellow strip) between the neutral public area and the Sales & Service Zone. Customers trust that as long as they stay in the green zone, a Sales Rep won’t sling sales pitches at them. Customers who need something know to step inside the red zone. Everyone else knows to stay out, and avert eye contact with “those people who just want you to open another account.”
Security Flaw: Bad guys always like to keep an eye on their exit while committing their crimes. This layout gives robbers excellent field of vision. They can easily scan the teller area and their escape route in one casual glance.
Merchandising Flaw: Retail Displays are placed near the entrance/exit where people are moving too quickly to pause or notice. This is a high-speed, high-traffic zone, not a “dwell zone.” People aren’t going to linger here. Anyone who stops to absorb marketing messages would be subject to the ‘butt brush factor.’
Common Flaw #2: The Straight Shot
In this example, the emphasis is on convenience, enabling customers to get to-and-from the Transaction Zone quickly and without obstruction.
Design Flaw: The “milk” may be in the back of the store…er, branch… but it’s a straight shot: customers walk in, conduct their transaction, then leave. The very instant customers enter the branch, they are focused on the queue, then zeroed-in on the tellers. On the way out, the only thing that has their attention is the exit. They get tunnel vision, so they never notice the Service Reps off in the periphery.
Security Flaw: Think about it…if customers can get in-and-out easily, so can robbers.
Merchandising Flaw: Customers may love this kind of branch because it makes things easy for them. Of course grocers could give shoppers an unobstructed path to the milk fridge too…but they don’t.
Again, it’s not generally very effective to situate marketing near entrances/exits. The message has to be very short and extremely simple — no creative abstractions or complex concepts.
Common Flaw #3: L-Shape
This layout is frequently used by financial institutions who believe it is important to have 8-10 teller stations available for those 1-4 peak days in a month (typically Fridays) when transaction volume is at its highest. This results in a long row of teller stations dominating the entire branch.
Design Flaw: Service Reps are tucked around a corner, so there are no opportunities for engagement. Customers could walk past the Sales & Service Zone a hundred times without knowing what goes on back there. How would customers know you offer home loans when they can’t even see you have a mortgage rep?
There may be the capacity to staff six teller stations, but how often will all six be staffed? What will customers think when they see employees at only two stations? They’ll think you look sad and abandoned, like airline counters on the graveyard shift. And God forbid a queue develops while you’ve only got two staffers manning your massive teller operation; customers will moan about how woefully understaffed you are.
Security Flaw: The closer you put tellers to an exit, the more likely you are to get robbed. In this layout, a robber could practically keep one foot out the door while passing his note.
Merchandising Flaw: With this floor plan layout, don’t be surprised if customers think of you as nothing more than a check-cashing store. No matter what you try to tell customers, the design of your branch says exactly what you’re about: processing transactions.
When tellers are near the entrance, you run out of space for retail displays, further limiting cross-selling opportunities.
Putting Milk in the Back of the Branch
There is one common problem shared by each of these three flawed branch layouts: Branch visitors must make a conscious decision and a deliberate effort to engage with Service Representatives. Service Reps are left twiddling their thumbs, passively waiting for a Customer to voluntarily upgrade themselves to a Prospect by stepping across the “barrier” and venturing into the Sales & Service Zone.
Situating your teller area in the back of your branches allows you to integrate Service Reps into the experience. “But just placing tellers at the back of a branch is not enough,” points out Paul Seibert, a principal at EHS Design and one of the world’s foremost authorities on branch architecture. “The experience must be engineered to properly expose products, services and staff to customers as they move along the path to the teller area, and then back out towards the door.”
If people are coming in to conduct costly transactions in your branches, why not make them say “hi” to your friendly, personal employees and pass by a few of your marketing messages? It’s only fair, isn’t it? When you move tellers to the back of branches, you not only create opportunities for positive interactions, you give yourself more space for marketing.
What’s more are the security benefits you’ll realize when situating your Transaction Zone in the back of branches. If you want to minimize your risk of robbery, move your tellers as far from the entrance/exit as possible. Robbers prefer the shortest possible path between the teller area and their exit, and, preferably, to keep an eye on both locations at the same time. Putting obstacles and people in front of robbers is good security. Putting smiles and promotions in front of consumers is good business.
The concept is known as SafeCatch. Developed by the FBI in partnership with EHS Design, SafeCatch requires customers and potential robbers to follow the same path, but each have very different psychological experiences. “Customers feel they are the center of attention and well-served, while robbers experience vulnerability and loss of anonymity as they move through the branch,” Seibert says. “When properly implemented, SafeCatch reduces robberies by as much as 70%.”
The Open Floor Plan
This layout takes customers looking to conduct transactions on a journey to the back of the branch. Along the way, customers must navigate a path that passes both Service Reps and Retail Displays, giving the financial institution more flexibility, security and cross-selling opportunities.
Design Advantages: If you equip your sit-down desks with the proper technology, Service Reps can pick customers out of the queue whenever customers start to line up. For instance, a Service Rep who might spot someone holding a check can say, “Sir, if you’re just here to make a deposit, I can help you with that.” Shifting some of the transactional workload onto Service Reps during peak hours is a great way to reduce the number of teller stations you need. But Service Reps can only assist in this capacity if juxtaposed along the queue. Do it right and you won’t ever need 6-8 teller stations again.
EHS Design’s Seibert endorses this solution. “Over the past ten years we have seen the size of teller lines shrink from an average of 6-8 down to three or four,” Seibert says. “Managers and service representatives are getting out of their offices and working the line to help alleviate any crunches in the teller area.”
Merchandising & Cross-Selling: Savvy retailers don’t cave to every consumer desire, yet banks often build their branches to suit customers without giving any consideration to the organization’s strategic objectives. What you need to do is carefully craft the experience. You must engineer where customers go and what they see, because every time you get them to engage with one of your employees or retail messages — even briefly — it helps fuel potential cross-selling opportunities.
Security: Acknowledging people with a smile and a friendly greeting isn’t just a nice thing to do, it’s the FBI’s favorite technique for deterring robberies. Simply saying “hello” to a would-be robber cuts your robbery risk significantly. Robbers hate making eye contact with employees because they don’t want to be noticed. When bad guys realize they have to engage with your peppy, proactive employees on the way to rob your tellers, they’ll probably decide to move on down the street and rob your competitor instead — you know, the branch that isolates staff and offers robbers an easy getaway.
Using a U-Shaped Traffic Pattern
A greeter warmly welcomes people as they enter. Customers “bounce” off Service Reps and branded retail displays as they make their way back to the teller area.
Design Advantages: The Greeter, which replaces one of the tellers, is not a new fulltime position. The existing branch staff are reassigned and rotated into the Greeter position following a regular schedule. This means no one gets stuck with the same job all the time.
Most financial institutions improperly deploy Greeters. If a Greeter doesn’t have the right training and equipment, they become little more than a smiley, feckless lump. But if you use Greeters strategically and effectively, they will be able to intercept a significant number of those customers who don’t need to travel all the way back to the Transaction Zone. With some sly design, you can create a Greeter Zone that won’t look like someone is missing when the station is unstaffed.
The growing trend of online+mobile has put the number of in-branch transactions on an irreversible decline, so it’s smart to cut the size of your teller activities. In the U-shaped illustration, giving the Greeter and both Service Reps the right tools enables them to act like three additional tellers during peak hours. This is another reason you no longer need branches that accommodate an army of tellers.
Merchandising & Cross-Selling: A good Greeter can really help you build positive customer relationships. If they regularly assist customers with cashless transactions, there will inevitably be opportunities to teach people about alternative delivery channels. If the Greeter position is staffed by someone trained as a Service Rep, then they will be able to assist customers with their needs, or, alternatively, walk a customer over and introduce them to another Service Rep.
The U-shaped layout provides the greatest potential for retail marketing. Customers must look at no fewer than four walls before reaching the teller area. Plus there’s one more wall behind the tellers when they get there. Every one of these walls represents a retailing opportunity.
If you want to put a corporate identity display in your branches, there’s no place better than on the wall behind the Greeter. Financial institutions frequently waste the space behind tellers with a large logo and slogan. But the “teller backwall” (as its officially called) is premium real estate. Why put a logo there when customers already know where they are? The teller backwall should almost always be used for eye-catching digital displays that present the financial institution’s most attractive, most popular and most profitable products.
Security: There is no single robbery prevention technique more effective than a dedicated Greeter. Also, the U-shaped layout means robbers can’t see their exit during the heist (“Are the cops waiting for me outside?”) and they have a long, circuitous route out of the branch after they’ve got the loot. They have to loop all the way around the greeter backwall during their getaway.
[Please note: These examples are rough illustrations intended to illustrate concepts. They do not take into consideration factors such as location, size, technologies, products/services nor the commercial context of a branch — all which significantly impact design decisions.]