Actionable Insights From APT's Retail Practice

Creating Opportunities for Customer Engagement

March 30th, 2011 | Posted by Will Weidman in Uncategorized - (Comments Off on Creating Opportunities for Customer Engagement)

It is no secret that customer are interacting less frequently with bank branches.  More and more, customers transact at the ATM and online.

A recent Banking Strategies article argues that despite this shift, customers will still need to go into the branch in some cases.  These customers “are typically prompted by lifestyle changes,” and the interaction can provide a major opportunity to strengthen and build the customer relationship.  Banking Strategies highlights the importance of understanding customer needs, having the right staff in place, and training staff appropriately to take advantage of these opportunities.

It is important to be well-positioned to take advantage of these opportunities.  However, banks also need to be able to create these opportunities.  Interacting with customers only when they come into a branch for a more complicated transaction will not be sufficient to build engagement across a large number of customers.

After putting in place the right staff with the right training, banks should also have these employees proactively reach out to high opportunity customers.  The key is to know who to target.  With limited resources, branch staff can’t effectively reach out to all customers.

Determining who to target is not easy, though.  Is it best to focus on those with the largest relationships, those with the most room to grow, or customers who have (or don’t have) a particular type of product? 

When implementing this type of program, try targeting a variety of different types of customers.  Then measure the impact on key metrics such as retention, cross sell, balance, revenue, and customer satisfaction relative to similar customers that weren’t targeted.

It will be vitally important for banks not just to take advantage of customer engagement opportunities but also to create them.  Branch staff will need to be more focused on relationship banking to effectively interact with customers that use the branch.  But fewer branch transactions will also provide branch staff with the opportunity to proactively reach out to customers.   Determine which customers have the most opportunity and take advantage of relationship bankers in the branch to engage those customers.

Do Staff-wide Training Investments Yield More Sales?

March 24th, 2011 | Posted by JMarek in Uncategorized - (Comments Off on Do Staff-wide Training Investments Yield More Sales?)

Earlier this month, Church’s Chicken closed all of its Nashville locations for 18 hours for employees to attend “an intense customer service training boot camp”.  While extreme, the “close and train” theme had occurred before.  In 2008, Starbucks famously closed all 7,100 of its American stores for 3 hours to train staff.  According to a New York Times article on the subject, Starbucks employees learned espresso-culture tips such as “’without aeration, the milk screams and lacks sweetness.’ And: ‘The perfect milk requires surfing the tip of the steam wand until the sound is SSHHHH.’”

While Starbucks has clearly recovered its mojo since 2008 (the stock has doubled since the training day), the question remains:  what is the incremental sales impact of the training programs themselves?  Do these programs overcome a breakeven hurdle given the loss in sales (and potentially customer satisfaction) that results from closing the network and turning away customers for a period of time? (more…)

Our Initial Thoughts From Restaurant Leadership 2011

March 21st, 2011 | Posted by retailblogadmin in Restaurants - (Comments Off on Our Initial Thoughts From Restaurant Leadership 2011)

Jonathan, Josh, and Michelle from APT enjoyed attending this year’s RLC in Scottsdale.

Political punditry aside, the burgeoning marketplace for daily deal sites and social media continued to be a hot topic – as the novelty of these coupon channels wears off, we are seeing operators move past simple redemption stats to understand what impact these various offers have on actual profits. Additionally, we enjoyed insightful conversations about how restaurateurs are evaluating new pricing and menu strategies in a world with increased commodity costs and signs of a recovering consumer.

We enjoyed hearing from industry leaders ranging from Sally Smith at Buffalo Wild Wings to Robert Brozin, chief of the expanding Nando’s Chicken chain, building on recent interviews with Starbuck’s Howard Schultz and Panera’s Ron Shaich.

Also of note, we’ve been remiss in not mentioning it earlier, we’re thrilled to welcome Wendy’s into the family of companies driving value from Test & LearnTM.

We’ll write more about detailed reflections from the RLC in future newsletters.

How to Optimally Expand Branch Staffing

March 18th, 2011 | Posted by Will Weidman in Financial Services | Uncategorized - (Comments Off on How to Optimally Expand Branch Staffing)

While banks cut back on staff during the economic downturn, many are now investing to increase branch staff levels. JP Morgan Chase, TD Canada Trust and Wells Fargo, among others have already added staff. The Washington Post reported that “Wells Fargo plans to hire 1,000 employees for 404 branches in its Mid-Atlantic region.”  The new staff members will include “tellers, managers, and personal bankers.”  This is a major increase in staffing levels, amounting to 2.5 additional employees per branch and  ~4 additional employees per branch in the Washington, D.C. area.  Other leading banks have announced their own investments into their branch networks and staff.

We observe many banks investing in additional branch personnel to accommodate the changing ways in which their customers use the branch.  But this can be a sizable bet, potentially increasing operating expense by tens of millions of dollars at a time when the economy and regulatory changes are still impacting the top line.

Banks considering a sizable staffing investment need to make sure they understand whether they will get a return and which branches and sub-markets would most benefit from additional resources.  Branch needs are not uniform, and employees should therefore not be added uniformly.  Factors such as branch size, characteristics of the current customer base, local demographics, and competition are all potential factors that can influence the optimal staffing complement by branch.Also, it is important to focus on getting the right staffing mix at each branch.  Some branches may need more personal bankers, while needs may be more aligned to tellers in other branches.

Staffing models should be supplemented by testing to determine optimal staff allocation.  Some leading banks are trying different staffing approaches in different types of branches, then measuring the impact relative to branches with constant staffing, and using the findings to refine the staffing strategy by branch.

Social Media: Marketing Steals the “Location, Location, Location” Adage from Real Estate

March 7th, 2011 | Posted by retailblogadmin in Marketing & Media - (Comments Off on Social Media: Marketing Steals the “Location, Location, Location” Adage from Real Estate)

Location based marketing is “here.” From Chili’s to Target, leading restaurants and retailers are showing an enthusiasm for piloting offerings from a range of hot New York and Silicon Valley start-ups including Foursquare, Shopkick, and Gowalla.

While each location-based service (LBS) is unique, they are all oriented around a central core principal: offers and coupons are most effective when restaurants and brands can target consumers at a specific time and place. (more…)

3 Steps to Improve Fee Testing & Strategy

March 1st, 2011 | Posted by Will Weidman in Financial Services | Uncategorized - (Comments Off on 3 Steps to Improve Fee Testing & Strategy)

Well into 2011, new fee strategy testing continues to make headlines in major publications. The Wall Street Journal recently has published another article on the topic, recapping the checking account fee testing at Bank of America and JP Morgan Chase, as well as some of the first testing around debit card fees.

As banks move into uncharted territory, testing is certainly the best way to inform difficult decisions, like refining fee structures.  However, we feel there are three challenges and opportunities to improve fee testing. (more…)