Banks suck. How many people go into a bank and are in any way excited about the bank itself? No one…thought so. You may be excited about withdrawing some money for a cool new purchase like a house or a special vacation, but no one goes to a bank to just be at a bank. Why is that, and why do I expect most people to think that’s a completely stupid idea – “going to a bank to hang out at a bank? Absurd.” Or, is it?

People do goto Apple stores and Starbucks shops (or Peet’s if you prefer) just to be at those places. Yes, you go there because of the product too, an iPod or some coffee, but I know plenty of people who goto Apple stores just to play around with what’s there, even if they already have that same thing at home. And, I know people who goto Starbucks to just buy a cup of coffee and chill at that “third place” as Howard Schultz likes to call it. Banks are losing out by not building themselves around this experience too.

Why don’t we have banks like retail stores that are as interesting or thought provoking as the products themselves (which comparing to Apple, they didn’t have until recently either, but look what that did for their business)? Because, as I keep repeating, it’s too much about the physical (or digital) money when it needs to be about the result of having that money, and I’m not just talking about an annual return.

Credit unions are nice (and much preferred over a traditional bank), but why don’t we have the mountain biker’s credit union that does more than allow membership for mountain bikers? You can join a credit union for actors if you can show that you’re an actor, but what does that credit union do beyond offering cheaper-than-bank offerings for some savings and possibly investment options? Nothing, and why not? Why doesn’t that credit union or bank also cater to the needs and interests of a mountain biker beyond his savings and portfolio needs? That money is being put away for a reason. This mountain biker is more than just a client or a generic investor, but who’s reaching out to really understand that person?

Thanks to the guys at 37Signals who write Signal vs. Noise, I was linked to this insightful article about the thought process and construction of Apple stores. Some excerts:

“Ron and I had a store all designed,” says Jobs, when they were stopped by an insight: The computer was evolving from a simple productivity tool to a “hub” for video, photography, music, information, and so forth. The sale, then, was less about the machine than what you could do with it.

“Less about the machine…” For a bank, less about the money, less about the return and more about “what you could do with it.”

When the first store finally opened, in Tysons Corner, Va., only a quarter of it was about product. The rest was arranged around interests: along the right wall, photos, videos, kids; on the left, problems. A third area – the Genius Bar in the back – was Johnson’s brainstorm.

As in the previous quote, what is the product of a bank? The product is where the bank makes it’s money, but that’s not where the customer’s experience ends, so why are banks structured around the product and the sale of that product?

Johnson is telling the story as he walks the floor of Apple’s San Francisco store, a perfect stainless-steel box punctuated by a massive skylight, which is throwing sun on a thirtysomething couple getting a tutorial at the Genius Bar. “See that?” says Johnson. “Look at their eyes. They’re learning. There’s an intense moment – like when you see a kid in school going ‘Aha!'”

Has anyone seen that kind of experience in a bank? Some banks will have counters with employees that try and help educate you (sometimes you have to pay, and sometimes you don’t), but those are there specifically based around the product still.

“Apple has changed people’s expectations of what retail should be about,” says Candace Corlett of WSL Strategic Retail in New York. “After they’ve seen Apple, how do they feel looking at a drugstore or the jeans section in a department store?” Other companies are asking themselves the same question.

“…asking themselves the same question,” so what about banks? I could find similar articles for the construction and thought process behind Starbucks stores where they’re basically de-emphasizing the product, and emphasizing the experience, which in Starbucks’ case, often has little to do with coffee itself – remember, it’s based on the “third place” experience.

Now, not all banks have to have a cool experience. Many times is really is just about the money and an annual return, but why don’t we have options beyond that? Give the customer control over the experience because they already have that anyway. Don’t force them to be a generic customer/client/investor, but give them a space to spread out in and lay around. A space where they can dream about possibilities, plan for those possibilities, make connections with others of similar interests, and get educated freely around that. They’ll still buy your product, but they’ll spend most of their time thinking about themselves (or their goals) as they should be, and less about the bank or the money. And with more people “hanging out” at your location (which just happens to be a bank), you’re sure to draw them to your products and services because you’ve shown them that your values, or as previously posted your corporate soul, and those match with their own.

In one of John Bogle’s speeches that I read, he said that fees and costs were the only differentiating factor between mutual funds (which is really the only difference today between credit unions and banks). So, the lowest cost and lowest fee funds should win, but that doesn’t mean that’s the only thing fund companies should be about. There is more to the experience than that, and we have yet to see anyone capitalize on it like Apple or Starbucks have in their own industries. Understand customers’ interests and values, and help them achieve those without too great of focus on yourself.