Digital communication networks support custom messaging and graphic displays that help sell your bank, while easing customer waits. Exclusive test results from a large branch-bank installation.
By Steven Keith Platt, director and research fellow, Platt Retail Institute, Hinsdale, Ill., and Dr. Jean-Charles Chebat, ECSC Research Chair of Retailing and professor of marketing, Ecole des Hautes Etudes Commerciales, Montreal.
Results from a bank test of a digital communication network show that they do
The importance of the customer experience at a bank is well recognized, and has led many institutions to evaluate a variety of methods to enhance the branch environment. One approach involves the installation of digital (flat screen) signs or digital communication networks (DCNs). Think of these as having your own broadcasting network, where you can display product- and service-related content that helps to convey messages about finances, bank services, or other broad industry topics, as well as community events, weather reports, and “meet the manager” information.
Such centrally managed networks can be expensive to deploy and maintain, however. Prior to making such an investment, most banks require an evaluation of the benefits. Here are seven key benefits:
• Messages delivered are dynamic, with the capability to display attention-getting graphics and videos.
• A DCN can leverage regional and branch-specific conditions, such as customer demographics, localized news, promotions, and educational content.
• Digital communication networks can be centrally monitored, ensuring system-wide, brand-compliant messages. This represents a major advantage over static signage, which is plagued with questions of timely branch-level compliance and slow delivery of messages.
• A DCN can enrich product/service presentations. Delivery of the right message to the right customer at the right time is key to relevancy.
• A digital communication network enables measurement of message impact.
• A DCN eliminates the time lag between a consumer’s exposure to a message and his or her arrival at the place of purchase.
• The DCN’s agile nature enhances its ability to make timely changes to messages in response to changing products and services, rate-sensitive information, as well as promotional, consumer, and environment-related factors.
The Platt Retail Institute working paper summarized here reports the results from a test of the impact on consumer attitudes and behavior resulting from exposure to a digital communication network. The test objective was to provide detailed analytics relating to consumer response to a DCN message, and to establish a model for measuring the tangible and intangible attributes of a bank DCN. As will be shown, the results determined that the returns are substantial.
The target bank (not TCF Bank, pictured above) is based in the Midwest, has more than 200 branches, more than $40 billion in assets, and 6,700 employees. The bank initiated its DCN pilot in 2000. Initially, 12 branches were enabled. By the end of 2005, the bank’s DCN was deployed to 60 branches, extended to 117 locations at the end of 2006, and reached 140 installations by the end of 2007. Full deployment to all locations is anticipated by the end of 2008.
To study the DCN impact on customer attitudes and behavior, PRI measured the following: impact and awareness, the customer bank experience, branch productivity, and, awareness of and impact on select product/service revenue/transactional activity. An overview of the test parameters includes the following:
• Ten branches, five of which were enabled with a DCN, which were paired with five control branches that did not have digital signs. In the test branches, the flat panels were placed at the head of teller line.
• Two separate waves of 750 exit interviews.
• 38 digital cameras that captured 17,000 hours of video and the behavior of 85,000 customers.
• Transactional and teller-use data compiled by the bank.
• 90 day test period.
Test and control branches were paired based upon location in the same market area and were consistent in both branch format and transaction volume. They were also distant enough from each other to prevent bleeding of customers from a test to a control branch, or vice versa. Specific digital content was developed for the test.
The content loop comprised 40 segments totaling approximately ten minutes. Segment length was generally in the 10 to 20 second range.
Four Key Test Findings
1. DCN impact and awareness
We found that the DCN was effective in stimulating consumer message awareness. This is predicated on our finding both a high observed rate of converting traffic to viewers and the reported rate of customer awareness. During this test we observed a 40% rate of conversion of traffic to viewers. Stated another way, we detected that 40% of customers passing in the line-of-sight of the DCN were looking at (i.e., noticing) the display. Consumer acceptance of DCN-delivered messages was gauged by consumer response, which found 63% of customers were aware of the DCN.
2. Customer bank experience
Customer satisfaction increased as a result of the DCN. This supports the conclusion that the network had a positive affect on the customer experience. Wait-time perceptions, customer satisfaction, customer loyalty, likelihood of recommending the bank, and the level of service compared with expectation were all impacted positively. For example, 5% more customers were very likely to recommend the bank in the branches with DCN than in the control branches, while 18% more were found to be very likely to recommend the bank in a test branch with a longer service time (defined here as the time in front of teller). In regard to the level of service compared with customer expectation, those for whom the level of bank service exceeded expectations was 7% higher in the test branches, and 15% higher in a test branch with a high service time. Applying a measure of customer loyalty that considered responses to the question of the likelihood of recommending the bank, it was found that the DCN branches scored 5.6% higher than the control branches.
3. Branch productivity
Branch productivity was positively impacted by use of a DCN. This supports the conclusion that the presence of a DCN can increase branch transaction processing while reducing labor costs. Stated another way, a DCN’s impact on branch productivity will result in either more customers being served by the same number of tellers at busy branches, or the same number of customers being served by a reduced number of labor-intensive tellers at slower branches. This demonstrates the ability of the DCN to have an impact on consumer behavior by influencing customers to stay off line and to use self-service options, as well as to have required documentation ready when reaching a teller. Changes in ATM use, in teller visits, as well as awareness of related messages at the test branches support this finding. Applying a productivity enhancement measure to these determinations, it was concluded that the impact on branch processing as a result of the DCN could translate into a 3-5% reduction in branch labor costs.
4. Product/service awareness and revenue/transactional activity
The following were the study’s findings based upon DCN delivered messages:
• A positive impact on product/service awareness.
• For 7 of 8 promoted products/services, purchase/usage intent was positively influenced.
• For 4 of 8 promoted products/services, customer behavior was impacted.
• The impact on customer behavior relating to transactional activities was greater than on product/service purchases.
• When incorporated into an integrated marketing campaign, new customer product/service sales increased by more than current customer account activity.
• In the majority of cases, test branches outperformed control branches in revenue from non-promoted products. BJ
The Platt Retail Institute is a retail think tank and consulting firm. The accompanying article is a summarization of its Working Paper #6, presented in this magazine exclusively. Copies of the complete working paper may be purchased from PRI at www.plattretailinstitute.org.
Funding for the research was provided, in part, by the following firms.
• Diamond Sponsors Cisco, Diversified Media Group.
• Gold Sponsors BroadSign, John Ryan, JSAT International, NEC Display Solutions, Scala, Symon.
• Silver Sponsors Planar Systems, Reflect Systems, Stratacache.
• Sponsors Digital Display & Communications, Digital Signage Quarterly, Digital Signage Expo, GlobeCast, Peoplecount, Unisys, VideoMining.
The electronic version of this article available at: http://www.nxtbook.com/nxtbooks/sb/ababj0508/index.php?startid=44