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Before the first member walks through the door, before the staff is assembled, before the first brick is laid, and before a single design line is drawn, there are two important steps necessary to insure the success of a new member delivery point. The credit union must find the best location – defined as the relatively concise area of the market in which to put a branch – and then, within that defined location envelope, find a site. These two steps revolve around that often-quoted trio of words – “location, location, location.” Survey after survey (for at least the 30 plus years I have been in this business) have indicated that convenience plays the greatest role in the selection of a financial institution. Whether it is close to where they live or work or shop, people want their financial institution office to be nearby. Why? Because they use it quite often. Despite the proliferation of delivery channels in the financial industry, people still like to use an office to conduct business. CUNA’s 2002 National Member Survey results showed that 80% of member households visited the lobby of a credit union at least once a month. The Tower Group found that 93% of US households used a bank branch at least once a month while 41% used one for all their financial transactions according to results published in 2002. Given the importance of locating a branch office conveniently to the members and potential members, the next key question is “How does one determine the best location and, subsequently, the best site?” Location Selection As mentioned above, location defines the focal point of the particular part of the market the credit union wishes to serve. It should have a geographic designation such as an intersection. There are some specific elements necessary to define the proper location. First is a set of internal information. The credit union should plot current offices, SEG locations, and member households on a map of the credit union’s market area and chart SEG employment, deposits and loans by zip codes. Look for concentrations of members or SEG groups that are not convenient to a branch. Are there areas of the market that have good membership representation but fall below average in terms of loan or deposit generation? These are areas on which the credit union should begin focusing. Next, look outside the institution at the community. * Find the centers of retail activity, especially those with super markets, pharmacies, multi-function stores such as Wal-Mart or Target, and cleaners. * Look at the demographic patterns and trends in the market and match these to the credit union’s membership and strategic marketing direction. This step highlights areas of population concentration and growth as well as the socio-economic characteristics and tendencies of the area’s population. The latter psycho-graphic data is available form many of the companies that compile demographic data. * Determine the transportation patterns that take people from their homes to work and shopping and back again and changes/improvements to the transportation infrastructure that are proposed or underway. * Find the locations of the competition and how those offices are growing. You may not want to simply follow the crowd, but good growth must have come from somewhere. As the credit union pulls this information together, it may want to rank the numeric or objective data and use the more subjective information to differentiate among the top ranked areas. The chosen location must offer convenience to the member and potential members and must mesh with the credit union’s corporate goals and strategic direction. Once the location is chosen, then it is time to turn the selection process toward the best site. Site Selection The initial step here is to determine what type of facility the credit union needs – a storefront branch in a shopping center, lease space in an office building, or a freestanding branch. The former two typically have a lower front end cost while the latter offers a better opportunity to create an office that is in the image of the credit union and that is more visible. As the credit union approaches site selection, several factors come into play that will affect the choice of the site. The most obvious is availability, but this can be eased by reviewing all sites that are apparently available and those whose availability is not as apparent. Just because there is not a “for sale” or “for lease” sign on the property does not mean it might not be available. Turning up the right site may take extra work, but the effort will be paid back through the success of the branch. Beyond availability, there are several other factors that the credit union must consider: * Accessibility – Can the member easily access the site? This is primarily an ingress/egress issue. Are there barriers that prevent getting onto the site from a particular direction such as a median? Can the member only make a right turn when exiting the site? It may go beyond ingress and egress, however. If the member is a couple of blocks away but cannot get here from there, then the accessibility is less than desirable. * Visibility – The members must be able to see where the branch is situated if they are to find it. Signage will help, but if most of the traffic in an area is along one street and the branch is a block off that street, it may be difficult to find. * Zoning – Is the piece of property properly zoned for the credit union to conduct a full range of business? * Size and shape – Not only must the site or space be large enough for the branch, it must be in a configuration that will allow the institution to efficiently carry out business. A long, thin storefront location may not allow the credit union to effectively offer its services to its members. An irregular piece of property may preclude a drive-up or convenient parking. * Cost and value – Is the site worth the price and, especially if it is a purchased site, will it maintain its value? While there is a correlation between price and location, make sure the difference in price correlates to a difference in value. The process of finding the proper location and site is not an easy one, but it is an important one. When one considers the cost of opening and operating a branch office, the extra time, effort, and money to select the right spot for the branch is well worth the cost and effort and only a fraction of the headache of selecting the wrong spot.

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