Steve Reider and Kimberly Clay know a thing or two about planning and marketing bank branches.
Before opening their firm, Bancography, in 2001, the business partners spent more than a decade working for AmSouth Bank. Reider managed bank planning. Clay was a marketing research manager.
And for years they have studied and written about the banking industry. They say that too often bankers make decisions on where to place branches based on gut instincts or wrong assumptions about market trends or fail to notice gradual changes in a market area’s demographics.
“A location may seem to have great traffic, ” says Reider, “but that’s not the same as the mathematics that says that the household growth rate has slowed down over the past five years and there is competitive saturation. Numbers always trump the gut.”
At Bancography, Reider and Clay use computer software tools and market analysis to crunch the numbers for banks and credit unions seeking data to support branch planning, the introduction of new products or services or determine what’s attracting or driving away potential customers.
“Steve and I often laugh and say that we’re the nerdy side of marketing, ” says Clay, a Birmingham native.
Reider, who grew up in Philadelphia, conducts quantitative analytics using a proprietary market analysis and branch planning software package, called the Bancography Plan, that he created. The software uses Geographic Information Systems (GIS) mapping technology that combines geographic and demographic information and other data so banks can generate maps to plot customers, find potential locations for branches and forecast a branch’s potential for profitability.
Reider and Clay say nearly 60 clients are using the software, and although Bancography offers consulting services, financial institutions can purchase a year-long subscription for the software and conduct their own branch planning. A single-state license is $5, 500 and a regional license, for up to 10 states, is $18, 000. Reider and Clay say all of the price points are set so that even smaller banks and credit unions can access their services.
“One of the fundamental goals of the company is the belief that every institution should have access to top-tier analytics sophistication, ” says Reider, “and so we have a product and price point that will work for any institution irrespective of size.”
One client who has used the software is Susan Bergen, chief marketing officer for Susquehanna Bancshares Inc., a regional financial institution based in Lititz, Pa. Bergen says she worked with Bancography on several projects even before coming to Susquehanna earlier this year.
“We’ve used the software for branch site analysis and for local market competitive analysis, ” Bergen says. “And we’ve used it when looking at potential acquisitions. It is very easy to use and allows you to pull together and customize local market data. I thought it was a great value for everything you can do with it.”
In addition, Bancography analysts offer consulting services for branch and ATM profitability, branch staffing, product lines and sales performance.
Clay manages the market research side of the business, gathering data for clients wanting to know how aware people are of their brand and image, how they rank among customers against competing financial institutions.
To collect the data, Clay runs a call center where interviewers survey bank customers across the country for feedback on their banking experiences.
Research needs are constant, says Clay, because markets are different, competitors change and customers’ wishes change. Bill pay and mobile banking, for instance, didn’t hit the customer satisfaction radar till a couple of years ago and now they can make or break customer relationships.
Reider and Clay say they are committed to promoting education within the industry. They publish a quarterly newsletter with reports such as “The State of the U.S. Economic Recovery: Facts and Figures” and articles on topics such as how to capitalize on the economic recovery or build an ATM deployment strategy.
In addition to writing articles for the newsletter, Reider and Clay also write pieces for trade magazines and conduct workshops and seminars for state and national trade associations. They also are frequently quoted in the media on the state of the banking industry.
Reider says that in the United States, the banking industry is surviving despite the economic downturn.
“The industry is in better health than you might think, ” he says. “The worst challenges from a credit quality standpoint are well in the rearview mirror. And particularly in Alabama, we continue to see a lot of positive indicators. We maybe have had five banks fail in the course of this financial crisis, and when you compare that to some of our Southeastern brethren, even when adjusting for the difference in population size, we have a great, strong, thriving banking industry here in Alabama.”
Reider and Clay analyze the banking markets from their 4, 000-square-foot office space on the first floor of the Liberty House Lofts at 2301 First Avenue North. The company has 22 staffers including eight full-time employees.
Clay says they decided to go into business together back when they worked together at AmSouth bank. To prepare for that goal, Reider went to work for a boutique consulting firm and began developing the software in his spare time. Clay says that in the meantime she worked for a firm for a couple of years to learn the operational side of running a marketing business.
Reider says they launched Bancography with financing that included a $50, 000 equity line of credit. Instead of operating from their homes, as many consultants to, they chose to open an office to give their company a more professional image, Reider says. They also aggressively marketed their business nationwide, he says.
“We believed early on that you dress for the job you want and not for the job you have, ” says Reider, “and so from day one we retained an advertising agency that built us an identity suite, and in fact, they came up with the name Bancography.”
While they won’t specify their company’s revenues, they say they’re pleased at how the company has progressed over the years. In 2012 alone, Bancography worked with about 100 clients across the United States and Canada, and the company averages about three projects or studies per client annually, Clay says.
Reider says that ultimately, they want Bancography to be recognized as an industry leader and an expert on the research topics they explore.
“There is a tremendous enjoyment in solving a problem and having the aha moment when you’re looking at all of the strategic options and suddenly the right one comes together, ” says Reider, “and you have the opportunity to present it to somebody whose career may really depend on being able to craft successful plans, and they come back to you and say, ‘Great job.’”
Gail Allyn Short is a freelance writer for Business Alabama. She lives in Birmingham.
Gail Allyn Short