Redefining Success for the Digital and Branch Channels
September 2, 2020
5 minute read – The following blog post was written by c. myers and originally published by CUES on August 17, 2020.
A digital- and mobile-first mindset was a primary focus for many credit union leaders before COVID-19. The nearly instant flip from branch delivery channel usage to digital has compelled many leadership teams to reevaluate how to strategically measure the success of both channels.
To help gain strategic clarity on this critical topic, gather your team to consider the following thought-provoking questions:
1. As branch lobbies are re-opened, how do we redefine success? Is low lobby traffic a good sign?
That depends on the strategic purpose of the branch. One way to think about this is to refresh your perspective on each branch as it is re-opened and ask, “What do we expect this branch to bring to the cooperative going forward?”
Different branches may have different purposes. The purpose for the next 12 to 24 months may be different from the purpose in five years. It must be clear how each branch serves the organization’s strategy in a meaningful way—either today or in the future.
Once the purpose is understood, measures can be created to gauge whether a branch is fulfilling it. For example, if the purpose of a branch is to handle complex interactions and create a marketing presence, you might measure the types of interactions that are taking place, the quality of interactions or brand recognition generated by the location. The important thing is to align the measures with the strategic purpose. Also think through whether there are any measures you’re using now that should be phased out because they are in conflict with the purpose.
In some cases, the ultimate purposes of your branches may not yet be achievable. You may realize that members will have to come in for some transactions as you work to enhance the capabilities of your digital channels. You may realize that you will need certain branches for building relationships in person until you’ve mastered selling and developing engaged relationships in the digital world. If there will be a transition period while the branch purpose shifts, recognize that fact, and create measures that will work for today, along with phased-in measures for the future purpose.
2. What do we need to have in our sights to ensure our mobile/digital channel is as successful, if not more successful, in quality member acquisition, generating loan volume, and cross-selling?
Many have been appropriately focused on making it possible for members to conduct business conveniently through digital channels. The next phase is the equally important challenge of how to effectively communicate your value proposition through these channels so you can acquire quality members, generate loan volume, and cross-sell. This is critical in a world where far fewer members wish to do business in person.
For quality member acquisition, think through the characteristics a quality member possesses, what products and services they use, and within what period they are meeting usage thresholds. Once this is understood, marketing messages can be created and measures designed to track success.
On the loan generation and cross-sell front, it’s sobering to realize that loan pull-through rates –the percentage of applications received that are funded – for the digital channel are commonly 30 percentage points lower than the branch and phone channels. That means if your pull-through rate in the branches is 60%, it would not be unusual for the digital channel to be 30%. The impact of shifting large numbers of loan applications to the digital channel can have serious consequences for revenue generation.
There are many reasons for this discrepancy in a channel that was initially designed as an add-on service option, rather than a revenue generation and member acquisition tool. Often, it’s the processes surrounding the digital channel that present the biggest opportunities for boosting quality member acquisition, and generation of loans and cross-sales.
3. What should be top-of-mind to ensure we are successful in aligning our brand through all channels?
This question goes beyond consistent logos and colors: At every single touchpoint, do you deliver on the feeling and experience that you want people to have when they interact with you?
Picture the members who open their accounts online and never walk into a branch or call on the phone. Their experience is entirely digital. Do those members “get” you? Do they understand your brand and get the same sense of the credit union that people who interact in person or on the phone do? If not, use your team’s creativity to find ways to make that happen. Look at some of your fintech competition for ideas on how the personality of a company can be communicated through a website or app. Having been born in the digital world, those companies had to get that right in order to survive. Test your thinking by asking whether the team believes you need to see people in person or talk to them on the phone to develop relationships. If so, challenge their thinking to find other ways.
If you feel the brand is well articulated and every interaction aligns, consider measuring how well the brand is understood at various touchpoints.
The world is changing fast. Align the purpose for branches and digital channels with strategy, and measure how well they’re fulfilling that purpose. This type of clarity helps ensure success in what matters today, and in the strategic future you’re working toward.