CUSTOMER LOYALTY: POINT-OF-PURCHASE: Banks branch into POP - Banks and building societies are using POP to make their branches more customer-friendly, writes Rachel Miller

Walking through the doors of some banks is like stepping back in time: you enter a large, unadorned hall and join customers queuing in bored silence on one side of the counter while staff work on the other side.

Walking through the doors of some banks is like stepping back in

time: you enter a large, unadorned hall and join customers queuing in

bored silence on one side of the counter while staff work on the other


Compared with other retailers in the high street, many bank branches are

still in a time warp in terms of welcoming customers into their ’stores’

and promoting their services.

But all that is changing. Banks and building societies are recognising

that their branches need to be customer-focused and that the branch

environment represents an opportunity to reach a captive audience.

The branches finally seem to be waking up to the fact that, in marketing

terms, they are falling behind remote banking services, which are

extremely customer-oriented. But is it a case of too little, too


Visits to branches are already falling as the number of ATMs rises and

telephone banking becomes established. And there are more services on

the way that threaten to make the branch a thing of the past. Several

banks are launching Internet and PC banking services, including Lloyds

TSB, Barclays and The Royal Bank of Scotland.

Telephone banking pioneer First Direct is conducting a PC banking trial

with the help of 2000 customers and plans to roll out the service later

this year. The system has been developed with ICL and the all-important

on-screen interface was designed by Nucleus. Chief operating officer

Andrew Armishaw says PC banking will only gain acceptance if it is

’customer-friendly, simple and easy to use’.

The same criteria are now being applied in the high street and more

attention is being paid to the customer interface in the branches.

Layouts are becoming more welcoming, point-of-purchase material is more

imaginative and interactive kiosks offer information and services.

Research seems to justify these innovations by suggesting that many

customers still prefer visiting their local branches. Mintel’s 1996

study of phone-based financial providers revealed that 81% of consumers

prefer to deal face-to-face, and that 57% did not like giving sensitive

information over the phone.

’Most banks and building societies are experimenting with different


But few banks have had the courage to go with one concept and roll it

out across the branch network, because the costs are prohibitive,’ says

David Williams, chairman of the Point of Purchase Advertising Institute

Europe (POPAI), and chairman of NDI Display Group, which handles POP

merchandising for the Royal Bank of Scotland.

’There is often conflict between architects, property services, security

and merchandising; there are so many facets to be considered,’ says


’In the Royal Bank of Scotland, this is changing and there’s a greater

co-ordination of in-house departments and an acceptance that branches

have to attract customers and communicate a marketing message.’

Many financial institutions are starting to use the same research and

evaluation techniques as the supermarkets to help them understand their

own retail environments. Retail Marketing Services (RMS), whose clients

include the Cheltenham & Gloucester building society, studies customer

behaviour, traffic flow and branch interaction to advise companies how

to site POP material.

’We assess how customers interact with their environment and improve

that interaction from the customer’s point of view,’ explains Martin

Kingdon, business development manager. RMS uses analysis software called

Multitrack to make sense of hundreds of hours of video recordings which

track where customers go in a branch and what they do there. Each action

is pre-coded so that customer behaviour can be quantified and


This research can be used to help formulate a POP strategy and then

evaluate its success. ’We are trying to prove that POP material works if

you do this, that people do use displays more and that they do make more

enquiries,’ says Kingdon. ’People behave differently in financial

services environments compared with other retail environments.’

Keep it casual

Kingdon says that banks are also recognising that ’customers do respond

to a less formal environment’. That realisation was behind Marks &

Spencer’s decision to redesign its dedicated financial service areas in

50 of its UK stores.

M&S entered the financial services market in1985 with a telephone-based

operation. But with 15 million customers visiting its stores every week,

its presence in-store has always been crucial.

’We looked at the financial services areas and it became apparent that

these places weren’t very approachable and also that there was no

consistency of branding between stores. The redesign was a chance to

bring in consistent branding and a fresh approach,’ says Chris Larkin,

M&S Financial Services media relations manager.

Larkin says the new layout was intended to make customers more at


M&S approached Evans Petty Associates to tackle the redesign. Chairman

Nigel Petty says: ’Our brief was to ensure the in-store space was used

efficiently, that it was user-friendly and had a fresh and open ambience

rather than the original, rather clinical atmosphere. What M&S is doing

with its financial services areas is reflecting the ambience of its


Also changing the face of the traditional bank branch are user-friendly

interactive kiosks, where customers can find out about mortgages and

accounts as well as depositing and withdrawing cash and checking

balances. One of the most successful systems to date is Interact,

Nationwide’s multimedia service, which will be installed in 200 branches

by 1999.

Launched in 1995, Interact combines text, sound, photography, video and

graphics with easy-to-use touchscreens. Customers can access information

about the home-buying process and find out how much they might be able

to borrow and how much it might cost. It also offers information on

loans, insurance and accounts.

’We initially built a demonstrator model and took it on the road to

focus groups,’ says Alan Oliver, Nationwide press officer. ’The feedback

enabled us to modify it and it did change dramatically.’ That

consultation process has helped to build a highly-competitive


Pilots take off

Oliver was manager of the Southampton branch, one of seven pilot sites,

and he says customers have reacted very favourably. ’One customer of

advancing years told me ’I wouldn’t use a computer but I would use one

of these’,’ he says.

Nationwide compared how the seven branches were doing, from a business

point of view, with control branches and found that those with Interact

were performing better. The building society has also developed a

self-service touchscreen system, which is available in 14 branches,

offering automated cash and cheque transactions.

All of the financial services companies are exploring systems like


For example, NatWest has plans to launch its own multimedia system at

the end of 1997. Meanwhile, NatWest’s Instant Share Dealing Service

continues to thrive. This touchscreen system was launched in 1986 for

the British Gas flotation. It has since been used by three-and-a-half

million people, is installed in 280 branches and offers 1000 leading


’It captures details of your account and automatically debits and

credits accordingly,’ says Paul Williams, director of dealing services

at NatWest stockbrokers. ’People like it because they see the price and

can then proceed with the trade and the deal is done then and there. The

beauty of the Instant Share Dealing system is that every piece of

documentation is produced at the point of sale.’

These systems have been developed as complementary to the service

provided by bank staff. However, from July Barclays is trialling two new

branches intended to fulfil two separate customer requirements.

Barclays Express and Barclays Personal will be unveiled in both

Northampton and Tunbridge Wells. Area director of the Northampton

branches, Terry Hebden, says: ’We realised that customers have two quite

distinct requirements.

First, they want to make simple transactions and use cash


Second, they want personal contact with someone with whom they are able

to discuss their more complex long-term financial needs.’

Express delivery

Aimed at both personal and business customers, Barclays Express will

offer cash dispensers, express paying-in machines and links to

Barclaycall, the bank’s telephone banking service. There will also be

two members of staff on hand to answer queries and help customers to use

the facilities.

Barclays Personal provides a team of staff to help customers manage

their finances on a private, face-to-face basis. Hebden says: ’We hope

to build a better rapport with those customers who want a greater degree

of personal service from their branch.’

Barclays is inviting feedback and Hebden says: ’Customers will be

helping us to formulate our plans for how banking at Barclays might look

into the 21st century.’

But will branches become redundant in the long term? In his report

Distribution 2000, James Bauer writes: ’Information terminals and kiosks

may also be on the verge of a major take-off. Investment in these

distribution systems needs to be carefully considered because they may

be only interim solutions and may become less important as transactions,

sales and servicing evolve towards telephones, ATMs, POS and home and

office banking.’

Bauer predicts that, with examination of the opportunities offered by

the Information Superhighway, ’it is possible to chart the ways the

branch bank can evolve into the virtual financial institution’.


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