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Reduce Risk and Uncover Opportunities
Banks that forego research and make strategic decisions by the seat of their pants usually end up kicking themselves in the very same area a few years later.
"If you're going to be involved in strategic planning, somewhere along the line you've got to get the basis for your situational analysis. And that basis should be more than 'We think it's this way,'" says David Polk, president, Polk-Lepson Research Group, York, Pa.
Choosing prospective site locations for a new branch is an example of a strategic move that should be thoroughly researched. But a lot of banks don't do their homework and pay for it later on, he says.
"As banks are looking for places to go, it only makes sense to do the homework ahead of time, not only to make sure that it's fertile territory, but also to see what the competition is doing there," Polk says. (Polk will teach a bank research course at the ABA School of Bank Marketing and Management, June 4-11, at the University of Colorado, Boulder, Colo. For more information, call 1-800-BANKERS.)
One of his current bank clients moved a branch into an area that looked promising. Now the institution is paying a steep price for taking a shortcut on research.
"I think they've been there 10 years and they have maybe about 200 customers," says Polk, who has a Ph.D. in applied social research. "This [branch] is dying on the vine, to the point that the president is in trouble with the board because they're losing all of this money. Well, if you do your homework...