Putting The ‘Community’ Back Into Community Banking

Community banks and credit unions only have themselves to blame for the dwindling number of customers in their branch lobbies. Traditional financial institutions have pushed customers into mobile- and self-service channels so hard that relationships have been stretched to a point where loyalty barely exists and people find it increasingly easy to abandon their current banking provider.

As consumers become more and more distanced from their primary financial institution, they increasingly turn to alternate providers. In an Accenture study, seven out of ten consumers said they chose sources other than their bank or credit union for an auto loan. More than half chose someone else for a home loan.

Reality Check: Digital-only relationships can work against the best interest of financial institutions, especially community banks. If customers don’t come in, you can’t see, sell or service them.

Liberty Bank in Chicago is fighting the drop in branch lobby traffic with a marketing initiative that puts face-to-face back into community banking by bringing customers and prospects back into the bank (or at least the parking lot).

Liberty Bank branches serve diverse neighborhoods filled with hipsters, seniors, young families, ethnic enclaves and smatterings of upscale professionals. To reach these groups, the bank sponsors a series of activities — each targeting specific audience segments — that give staff members the opportunity to mingle and introduce themselves. No overt selling takes place however, manned booths are usually present where parents can learn about Liberty’s financial literacy program, for example, or seniors can get details about upcoming events.

Liberty Bank has hosted music festivals and petting zoos in branch parking lots, held college information fairs in lobbies and sponsored health fairs and driver education classes for older adults. The bank partnered with a local site to sponsor a Taco Crawl which took Millennials to six local Mexican restaurants. There was a contest for the best pierogi in Chicago (a big deal in one of Liberty Bank’s Polish neighborhoods).

Family-focused activities are excellent vehicles for bringing in parents who don’t interact with Liberty Bank staff either because they do bank online or with one of the four megabanks. Bringing a children’s choir to your branch or host an entertainer that appeals to kids in your lobby generates goodwill and provides opportunities to make personal connections.

Often, the bank incorporates a fundraising component into the program. By partnering with a local nonprofit, community connections are reinforced, and each event’s reach is immediately expanded.

For example, on one occasion, the bank sold reproductions of an old-time baseball shirt worn by a long-gone semi-professional team with roots in the area. Exclusively available at Liberty Bank over a two month period, the shirts proved very popular with Millennials, and proceeds went to the local preservation society which publicized the event to members and promoted it in the media. Subsequently, the bank partnered with them to sell miniature reproductions of a local monument and sponsorship of bicycle tours of iconic area homes.

Attendees at Liberty Bank events are asked — but not required — to sign-up in advance using Eventbrite, a registration site. Besides capturing valuable contact information that can be leveraged internally later, using a registration system like this will help you better anticipate the number of attendees you will need to accommodate. Periodically, a Liberty staffer will cross-check names of registered attendees against new accounts opened to help the bank gauge the return on its investment.

An aggressive community outreach program can achieve many important objectives. It’s a customer acquisition program that counters the loss in lobby traffic, builds new relationships, and differentiates the bank from national institutions. Some “community institutions” consider generous donations to be the extent of their community involvement. Times have changed, competition has picked up, and banking providers must demand more from their community engagement efforts.

This article was originally published on . All content © 2024 by The Financial Brand and may not be reproduced by any means without permission.