Comments for WORKBOOK: Time to close underperforming branches? at http://www.ababj.com , comment 0 to 1 out of 1 comments http://www.ababj.com Wed, 22 May 2013 05:07:42 +0100 FeedCreator 1.7.2 http://www.ababj.com/briefing/workbook-time-to-close-underperforming-branches-3387.html#pc_1433 This is a very well written article with straight forward practical advice for a complex and customer- sensitive issue. Thank you! While I concur with everything Jeffrey and Paul present, I would like to add a couple of thoughts for consideration. Detailed branch profitability analysis is essential to understanding current performance, and by projection, future performance. I am concerned that limiting the analysis to one branch at a time and how alternatives may limit customer loss may not provide a full picture that can drive strategy or optimize performance of the entire branch and ATM network. The concepts and tools presented in the article are right on target, but they must fit within a strategic branching plan driven by branch network optimization analysis. Before determining which branches should close, the entire market or network geography needs to be analyzed using a “zero-base” approach. In other words: a) map your target markets based on where you can retain and gain the highest performance for specific products and services without considering existing branch locations; b) place branch in what would be the perfect branching and ATM array to maximize performance; c) then, overlay your existing branches and determine how you will evolve toward network perfection in terms of efficiency and productivity. By doing this you will be considering both the value of existing branches and their impact on entire network performance over time. I really appreciate the comments under “Getting ready to pull the plug”. The reasons for poor performance can also include location and brand image. In some cases relocating a branch one or two blocks or even to another site in a strip mall can substantially enhance performance due to visibility, parking, neighbors, right-sizing, and other factors. Brand image can be a big factor as well. Is your branch delivering a brand experience that differentiates you from your competitors, engages your customer’s values and interests, and works to create the 4th Place in their minds? Here’s a real story example: a financial institution in Vancouver BC had a modestly performing branch on the North Shore with $90 million in deposits, but no growth for three years. They relocated the branch in the same shopping center and created a new brand image that connected to their target market. The first month the branch grew $1 million in deposits and has continued to grow $1 million per month for the past five years. I agree that branch networks must become much more efficient and individual branches must be sized to new metrics and product and service offerings, but before closing any branches, a full branch network optimization study should be completed. Then, branches can be closed, relocated, right-sized or renovated to enhance enterprise performance over the long-term. Paul Seibert, CMC EHS Design - Paul Seibert Sat, 20 Oct 2012 12:19:49 +0100