Oregon’s Umpqua Bank rebels against all traditional notions of what a bank branch should be. With free wifi, tea, and dog treats, perhaps that meeting with the bank manager might not be so bad, finds David W. Smith.
Visiting Oregon-based Umpqua Bank is more akin to entering the lobby of a five star hotel than a traditional bank branch. Instead of the classic formation of tellers in their grey and uniform corporate boxes, Umpqua’s ‘universal associates’ welcome visitors, chatting to them on comfortable couches and easy chairs. Free tea and coffee are available, Wi-Fi is open to all and you may stay as long as you want. Customers’ dogs receive free treats and bowls of water. And you don’t even need to be a member of the bank to enjoy the hospitality. Umpqua’s ‘stores’ host thousands of free community events a year, including weddings, art exhibitions and children’s theatre performances. The bank also opens up its spaces and conference rooms free of charge to local businesses, freelancers and non-profits.
Umpqua’s model is so successful that banks from all over the world have attended its visit programme to study the company’s secrets. But no one has yet successfully emulated Umpqua’s approach. Given the growth in Umpqua’s business, this is somewhat surprising. When Ray Davis took over as CEO in 1994 and embarked on his arguably revolutionary strategic makeover, the bank had assets of US$150 million and five locations in rural Oregon. Now, it has more than 400 stores in five states and US$23 billion in assets. It is the largest community bank on the US West Coast.
“When Ray took over, he wanted to transform banking from a chore into something people enjoyed doing,” says Eve Callahan, senior vice president of communications. “Ray asked himself how Umpqua could distinguish itself from its competitors.You can’t do it on price, or product. Every cheque book account is pretty much the same. What was left was to focus more on the customer experience and that insight led directly to the creation of our ‘store’ model.”
Davis’ big idea was to create the first banking ‘stores’. The change of name emphasised that these were to be more inviting spaces for customers and members of the community. Davis also decided that instead of tellers who were specialists in one skill, the stores would be staffed by universal associates who would be ‘cross-trained’ to help customers with virtually any transaction.
Davis could not find the business models he needed for his brave new world inside the banking world. So he looked elsewhere for inspiration. The most important influence became the luxury hotel chain Ritz-Carlton, known for treating its customers like royalty. Davis’ first step was to send seven frontline staff to education programmes at the Ritz- Carlton. The move was so successful that he decided all Umpqua Bank associates would benefit from the training. Over the past 12 years, some 700 associates from all levels of the bank have participated in Ritz-Carlton classes.
Michelle Van Allen, Umpqua Bank training director, says: “Ritz-Carlton’s ladies and gentlemen carefully listen and immediately respond to expressed and unexpressed needs. They are always thinking about what they can do to make someone’s day. They are creative and empowered to make decisions about how to best deliver service. Umpqua Universal Associates see that it’s the simple things that make a big difference and are motivated to create a memorable Ritz-Carlton service experience for their internal and external customers.”
Umpqua’s staff members tend to be hired for their interpersonal skills and customer service experience rather than their knowledge of banking. They are more likely to come from companies that focus on the customer experience, such as Gap, Apple, Nordstrom, or Starbucks than the financial sector. “The ‘culture’ of Umpqua is our most valuable asset so our training managers look for individuals with the right cultural competences,” says Callahan. “We hire from companies in the commodity space who have differentiated themselves based on customer experience as we can more easily train people in the basics of banking.”
Umpqua’s employees give back to the community through the Connect Volunteer Program. They can take up to 40 hours per year of paid leave to volunteer at local community organisations. “Other companies run such volunteer schemes, but they get around 30 per cent participation, whereas at Umpqua we have 80 per cent participation rates. That’s because we hire people who share the bank’s core community values,” says Callahan.
SPACIOUS AND COMFORTABLE
Starbucks provides another inspiration. Umpqua Bank’s spacious stores have enough comfortable seating to read a book, do some work or hold a meeting. The free tea and coffee encourage people to relax and linger. “Starbucks has made coffee a social and aesthetic experience instead of an unromantic energy drink, and Umpqua Bank has similarly transformed the banking world through the unique design of its stores and the welcoming approach of its workers,” wrote Dutch business writer Jeroen Geelhoed in his recent book ‘Brilliant Business Models in Finance’.
“The great lesson of Umpqua Bank is to look at inspirational businesses from other industries and think about how you can apply their lessons to your own organisation and how their model would fit with your values. Most importantly, don’t be afraid to do the unusual if you really believe in it,” he adds.
PLEASE SHARE YOUR EXPERIENCES AND VIEWS IN THE COMMENT SECTION
Photo credit: Rick Obst from Flickr