Why Do Banks Have Lollipops?

Have you ever wondered why banks have lollipops? This can seem like a strange question, especially if you believe you have a good understanding of banking. For many, especially children, odd traditions can appear as harmless quirks. Lollipops, however, are more than just a sweet treat; they serve a strategic purpose that goes beyond simple kindness.

Energy Boost for Customers

Lollipops contain sugar, which provides a momentary boost of energy. This can make the act of visiting a bank feel more positive and exciting, particularly when the bank is presenting a profitable proposition. This energy boost, combined with the candy, can make customers feel more enthusiastic about their experience.

Creating a Welcoming Environment

The offering of lollipops and similar small tokens of appreciation (like chocolate bars and bottles of water at car dealerships) is often used to create a sense of relaxation and welcome. These gestures are designed to make the customer feel more comfortable and at ease. By doing so, the bank can influence decisions and encourage repeat visits, much like the offer of coffee and chocolate makes the customer want to return.

Strategic Marketing Tactic

In practical terms, offering candy before making decisions can be a clever marketing tactic. When a bank pressures a customer to open an account or take out a loan, providing a small treat can help to calm the customer down. This process creates a positive association with the bank, making the customer more likely to engage in further transactions.

The use of these tactics is particularly important in the realm of retail banking, a commodity service where all U.S. Dollar bills are green and indistinguishable. Banks must differentiate themselves by providing better services, lower interest rates, and higher interest returns on deposits. Offering candy to customers can be one of these differentiators, helping to make the bank stand out in a crowded market.

CRM and Beyond

These practices are also deeply tied to customer relationship management (CRM). By creating a welcoming and positive environment, banks can build stronger relationships with their customers, increasing the likelihood of repeat business. CRM strategies, including giving candy, are part of a broader effort to enhance customer satisfaction and loyalty.

Moreover, the candy strategy is particularly effective because of the competitive nature of the banking industry. Banks must compete not just on interest rates and services, but also on the overall customer experience. The more positive that experience is, the more likely customers are to remain loyal and continue doing business with the bank.

Why Banks Hate Credit Unions

At the heart of the candy strategy is the competitive advantage of credit unions. Unlike banks, credit unions are non-profit organizations that can offer better interest rates on deposits and lower interest rates on loans. This is because credit unions are driven by a cooperative model, where members (depositors) are also the owners and share in the profits. This structural advantage makes credit unions a formidable competitor in the retail banking market.

In conclusion, the presence of lollipops in banks is not just a random gesture but a strategic choice aimed at enhancing the customer experience and fostering long-term loyalty. From energy boosts to creating a welcoming environment, candy serves as a powerful tool in the marketing arsenal of retail banks. As you visit a bank branch, perhaps worth reflecting on how much these seemingly small gestures are influencing your decisions.