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Lisa Valentine
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Umpqua Bank Functions Like A Retailer, Head of Marketing Says

At the end of the day, Umpqua sells products and services, much like a retailer, says Lani Hayward, EVP of creative services.

Lani Hayward, Umpqua Bank

As EVP of creative strategies for Umpqua Bank ($8.3 billion in assets), Lani Hayward is responsible for marketing, R&D, and branch concept and channel development. She says she works to change the way the bank provides products and services. And according to Hayward, who reports directly to CEO Ray Davis, the Portland, Ore.-based financial institution isn't afraid to experiment with new methods of wowing customers. In fact, the bank has created an Innovation Lab to test unconventional marketing strategies designed to draw customers into its branches, or, as the bank refers to them, stores.

BS&T: Describe Umpqua's marketing philosophy.

Hayward: At the end of the day, we sell products and services, much like a retailer. We think about retailing bank products, including making banking a more pleasurable experience that causes customers to shop and impulse-buy. There are two parts to making banking pleasurable: The first is the environment itself, and the second is the way you treat customers.

BS&T: What's different about your branches, or stores?

Hayward: When you walk into one of our stores, you don't see a big, long teller row. Instead, you see three-dimensional displays of products and services. We have computer cafes, newspapers and magazines, and we sell local merchandise such as books and apparel. We have big-screen TVs to watch investment news. The arrangement itself is very inviting. We've built our stores for people to come in and enjoy. We want them to stick around, because if they stick around, they may buy something. We launched our first store in 1995. At that time we were third in deposits in our home market of Douglas County. Three years later we were No. 1.

BS&T: How do you foster a positive customer experience?

Hayward: The culture of this bank is the most important asset we have. You feel our culture when you walk into any of our locations. We want to remain a community bank at any size, and we empower our employees at the local level so they can better service customers.

BS&T: What was the origin of the Innovation Lab?

Hayward: A gentleman from Microsoft [Redmond, Wash.] had been traveling the globe looking for the bank of the future. His dad told him about Umpqua Bank. He came for a visit two years ago and said, "This is it!" Within a month, a [Microsoft] camera crew had shot a video on the bank of the future featuring Umpqua Bank stores.

We were inspired by that experience and started thinking about creating a lab where we could experiment with different banking concepts and then push those concepts that work out to our stores. We looked for partnerships with technology companies that would be interested in receiving results from a live banking environment. Microsoft, Cisco [San Jose, Calif.], Plannar [Beaverton, Ore.], Intel [Santa Clara, Calif.], Lenovo [Morrisville, N.C.] and Nexus IS [Valencia, Calif.] are all participating in this experiment. The Innovation Lab is a live petri dish. That's rare in any industry. Labs are not typically real-time with real customers.

BS&T: Why did you locate the Lab in the South Waterfront, Ore., neighborhood?

Hayward: South Waterford is a high-density neighborhood that's built on the premise of sustainable living. We wanted the Lab to be a destination spot for the city. When you walk in, you clearly see that it's a place to do things other than banking. The physical environment is very inviting and open. We host several events a week. We have business therapy classes that draw people from all over the area.

Even though everyone has a computer and has access to the Internet, people of all ages still come in to use our computer cafes. We have a counter with a number of laptops and individual round tables, two of which have embedded laptops. The Lab is wireless, as well.

BS&T: What are some of the other elements of the Lab?

Hayward: We have an "Ask an Expert" service that allows customers to ask real-time questions about investments, mortgages and small business lending using on-demand video conferencing. They can share documents with the expert as well. This is the type of product that, if it resonates with people, we would roll out across our footprint since we don't have licensed investment professionals, mortgage officers or small-business lenders in every store.

We also have a 25-foot-high product wall that consists of six huge touch screens that can work independently or as one big screen. It's a combination of art and messaging that comes together to showcase products, services and resources. We host a social networking space where local businesses can enter their profile and it will appear on a searchable map. You can listen to podcasts. We have a community wall with thousands of constantly changing photos, making it interesting to watch. The wall includes touch-screen technology, so we use it as a survey tool. Customers can push the screen to vote. Often we'll host an event to unveil the survey results. We're providing a reason to come in to the Lab, and a reason to come back.

BS&T: Were you surprised that people would congregate at an Umpqua store to surf the Web when they can do that in their own homes?

Hayward: I think people are searching for face-to-face contact -- we've lost touch with one another. The Lab is an active and participatory destination. The 25-foot wall turns into a giant TV, movie screen or Wii [Nintendo; Kyoto, Japan] game. We've hosted Wii tournaments. We have a Wii bowling league starting. It's much more than a bank. Our customers tell their friends and family. When customers have out-of-town visitors, they take them to the bank.

BS&T: How do you measure the results of the Lab?

Hayward: We have a dashboard that monitors all touch points within the Lab. For example, we measure how many people use the walls and whether they perform any action, such as sending an e-mail or signing up for more information. We monitor how many people visit the computer cafe, how many use the Ask an Expert tool and if those sessions resulted in a product sale. We also measure how many people attend events and how many of those people revisit the bank. Our Wii Celebrity Playoff event brought in several hundred people.

BS&T: What has been your greatest career challenge?

Hayward: Whenever you differentiate yourself, you create a strategy gap between what you are doing and what the rest of the industry is doing. The financial services industry is starting to catch on to what we are doing, so we have to continue to push the strategy gap while staying focused on what we stand for. There are a lot of whiz-bang technologies that you can use, but you have to make sure that what you do is in line with your brand. Our strategy is to enable an innovative customer experience, and that strategy needs to constantly evolve.

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