This infrastructure can then be used for more effective marketing. Second, managers must appreciate the counterintuitive insight that branches constitute the most efficient sales channel. This is extremely important because so much of the expense reduction in bank mergers involves closing branches. The perils are illustrated in a recent Boston Consulting Group study, which found that branch walk-in sales efficiency is six times that of phone sales efficiency, and that both exceed the direct mail rate. Unfortunately, branches fail to capture much of this sales potential because so little employee time is dedicated to selling.
Branches are natural capture points.
Given their production capability, they should be transformed into lean marketing platforms and, thus, an important source of profitable revenue gains following a merger. Third, if acquiring banks are going to compete in insurance and investment products, their sales resources must be competitive with nonbank rivals. But compared with the securities and insurance industries, banks have far fewer sales people as a percent of total employees. They also pay less. That makes it difficult to attract the talent needed to compete with these rivals.