Key Bank Channel Strategy

Patrick Swanick, president of Key's retail bank and president and CEO of Key Electronic Services, has an all-business attitude about channel strategy: "This is a process for us, it's not a destination. We're looking at managing these channels as a business. We are also looking at our channels as strategic assets. When you make that shift in your thinking, from looking at distribution as a cost of doing business to distribution as a strategic asset of your company, you start to look at things in a different way. You start to listen to the customer more often."

Key's primary strategy is to deliver the bank's products and services in a seamless manner. The strategy is built around putting the client first, providing a distinctive level of customer service and working together as a team. Using customer comments as the basis for the changes, Key has reduced the number of branches, increased the number of ATMs and strengthened the call center and internet channels. Nearly one-third of customers now deal with the bank through the internet.

The first step in revamping Key's channel strategy was to centralize distribution management. Previously, channel management was fragmented, so competition for capital and resources went to different areas of the company. There was no cross-channel evaluation.

Several challenges included

1. underestimating the data challenge (plenty of data, but not much actionable information),

2. underestimating the role of product design (high-net-worth clients need higher-touch contacts than do mass-market customers),

3. making it easy for customers and employees to do business at the point of sale and service, and

4. showing respect to customers and doing business with them the way they want to do business, not the way we want them to do business.

Financial services companies need to create unique experiences for their customers. If you are able to provide a consistent customer experience that's true to your brand across your channels, you're shifting the basis of competition from product and price to total value. In tough times, your ability to create that loyalty really matters.

Manage distribution as a business. You have to understand the economics of the business beyond product profitability … it's more about what's happening in the actual vs. the planned for each channel by defining what the channel experience is for each segment.

Remember that customer retention starts with employee retention. Employees and their bosses need to understand their jobs.