A Story of Consulting Gone Wrong
As a counter-point to our previous article, “When X Marks The Spot,” we thought we’d tell a story of a Real Estate consulting engagement gone awry.
This one’s legendary in Consulting communities. The details may be inflated and nobody really knows for sure who the offender was, but the story is great and the lesson is invaluable for those looking to engage with a Consulting Firm in the future. For the purpose of this audience, we’ve turned this tale into a Retail Banking story.
A Bank Needs A New Location
As the story goes, a CEO of a fast-growing Bank needed to find the next branch location, and fast. She only had enough budget to approve one new branch for that given fiscal year, but didn’t know where to put the branch – or better yet, was afraid to put it in the wrong location.
The Bank was in a fast growing market with new neighborhoods and shopping districts appearing within the last five years. It was a viable battle ground for many retailers, and many retail banks were swirling around the different street corners.
Not wanting to make a costly mistake, the Bank CEO hired a consulting team to narrow down the trade areas. She figured it was better to engage a Consulting partner for the next several weeks instead of rushing into a potentially bad decision.
A “Data-Driven” Approach, It Was Not
After the Consultant was onboarded and gathered the appropriate information, 4 different trade areas were offered. After much discussion and trend analysis, a trade area was chosen based on residential proximity and Deposit/Loan growth.
A several block radius was identified in a fast-growing and hotly contested area. Restaurants, bars and other trendy retailers were grabbing the best locations. Now that the trade area was found, the CEO pushed the consultant to make the final recommendation by identifying the actual address of where the new branch would be located.
A Grave Recommendation
Looking through the information gathered, the Consultant identified the address within the given trade area. It was just two blocks south of the main intersection where all of the high rent retail was located, but was well-suited with good proximity and good ingress/egress for frequent visitors to the branch or winding in the drive-thru.
With his final presentation, the Consultant showed a map of the trade area, and began to unfold what this several block radius looks like today, all leading up the great reveal of where the branch would be located.
Finally, the logo of the branch faded in on the image of the map, neatly appearing over the vacant green-space just two blocks south of the busy intersection. With its appearance, the Consultant gave a dramatic pause and waited for his CEO client to soak in the information, undoubtedly followed by thundering applause.
The CEO turned to the Consultant with a very plain face and simply said, “That’s a cemetery. It’s been there for over 150 years.”
The Valuable Lesson
If you ever find yourself about to embark on hiring a Consultant, you need to understand that all of them tell you what you want to hear, but not many of them tell you what you need to know.
A good Consultant will deliver you the results you simply could not have done by yourself. A bad consultant will gladly take your money, but frankly just tell you what you already knew.
And the lesson here from the story, at least in the context of this bank branch, there’s only so much “good data” can do for you. Finding the next great branch location also includes a “feet on the street” team to include the information that data simply cannot see – like that “amazing” site location that turns out to be the town cemetery.
If you’d like to learn more about the LEVEL5 Consulting services and how our data-driven approach is completed by a visit to the trade area, Contact Us today.