What Banks Can Learn from Trader Joes with DJ Seeterlin

Chris Nichols (00:09.89)
DJ, welcome to the podcast. We appreciate you being on. for those of you that don’t know DJ, and I don’t know if there’s many of you that don’t, he’s all over the place. Probably one of the better bank strategists out there. Not only a good bank strategist, but also has his hands in execution. So I relate to him well in terms of we can talk details, we can talk mid-level, we can talk high-level, we can talk industry, we can talk bank specific. I always have a good conversation with DJ. this time he recently hit me.

up at the Alloy Labs meeting with an interesting analogy on Trader Joe’s, so wanted to explore that on this podcast. DJ, welcome welcome to the podcast.

DJ Seeterlin (00:49.711)
Well, thank you very much, Chris. I really appreciate you inviting me. I I always have a great time talking to you and really appreciate all of your insights and the advice you’ve given me through the years.

Chris Nichols (00:59.512)
So, thanks to Caleb, the producer of this podcast, he always pushes me to tell more stories. And when I heard the Trader Joe’s analogy, I’m like, this is pretty effective at getting some of our issues and opportunities out on the table for our listeners. Go through your Trader Joe’s analogy as it relates to banking.

DJ Seeterlin (01:19.249)
Sure. Well, in particular, it’s about strategy, I think. because I’ve I’ve been struggling for a while trying to figure out how do we help our people get on board with the concept of customer segmentation and and what does that mean and does that mean, especially if you’re a community bank, that that I can’t serve all of my customers, you know, my whole community? And so th this really hit home for me as I was as I was learning about it and then forced me to dig into it. But

The the emp the the big part behind this is that I think Trader Joe’s is actually really good at strategy. And I was fascinated by their approach to this. and in particular, as they developed what they were trying to do, they recognized that they could not win on being the low cost provider. They they’re n they weren’t gonna win by being the cheapest jug of milk.

That a customer could buy. They were competing, I think, at early stages with 7-Eleven, and they they knew they couldn’t win at that. So they recognized they needed to have something that other people didn’t have a reason for a customer to come in their store. And so they they targeted customers who wanted something different but were value-oriented. So something interesting, and that that kind of looks like an it an adventure seeker, a treasure seeker, as it were. and I think that’s cool because it’s not demographic focused.

focused, right? It’s really focused on on a problem to solve, something that’s unique about that customer segment. And then it turns into demographics. Then you can identify demographics from there, but it really focuses on that that problem to solve. And for them it kind of turns into the recent college graduates and empty nesters. You know, they they want something different, they want something interesting, but they still care about price. And then you can start seeing that show up in how they do business, the choices they make.

and and the things that make them interesting. So I would imagine, Chris, that you have been in a Trader Joe’s before, am I right?

Chris Nichols (03:13.059)
Well

I am blessed and I’m I’m I I have this theory that I live in one of the areas that have four markets all within one mile of a population center. So I just drive down my street and I hit them all. And my problem now is I love things at each spot, whether it’s Whole Foods, we have a boutique, high-end market, we have a Safeway, which is like a Publix out there general market, and then we have Trader Joe’s, the one closest to me, and I frequent all of them and I love Trader Joe’s for just specific items. So yes, I’m a frequent shopper. I am a

Fan of Trader Joe’s always has been. I want to go back to your pricing position because I think this is important to start us off. they’re normally recognized as one of the cheapest, and I think your point is they’re not the cheapest. There are other cheaper competitors out there, i.e., Costco, Walmart, 7 Eleven. But the strategy is to drive value, which I think is a fantastic analogy to community banking. Keep going on that in terms of maybe gonna go next with product.

DJ Seeterlin (03:48.741)
Mm-hmm.

DJ Seeterlin (04:15.173)
Well, you know, I I I asked you like, you know, do you like it? Because oftentimes when I ask people do they like it, they’re like, Yes. I love it because they have like the really cool like honey roasted pecans, or they’ve got the flowers that I love, or they’ve got, you know, this great chicken salad or something. and so there’s some unique, interesting thing that they couldn’t get anywhere else. and but yeah, the the pricing component is important because in I’ve look I’ve compared this myself. They have like a Trader Joe O’s.

that are they they look a lot like a Cheerios, right? And and they’re actually about the same price.

Chris Nichols (04:49.851)
And they may actually be Cheerios, right? They rebrand Yeah.

DJ Seeterlin (04:52.357)
Who knows, right? Like, but to the customer, they’re getting something different, but they’re getting it at a value price. And as they were making choices about products, I think frequent shoppers might recognize that there’s a Trader Joe’s brand. There’s a Trader Joe’s package brand. And that’s not it’s not that their strategy says we have to sell a Trader Joe’s package brand. It’s that there’s value focused and so they’re not going to be able to offer the Cheerios at a cheaper price or the same price as a Walmart who’s doing it at scale.

And that consumer packaged good with that brand name has a has a price premium on it. So to meet their strategy, they recognized that they needed to then solve it with with you know their own brand. It’s not it’s it’s about understanding which drives th which answer. And for them it was like, well, we have to meet value focus, so that means we’re gonna have to start packaging our own goods, which as you said, might be the same provider in the back end, but they’re not selling the Cheerio’s brand. They’re selling the the Trader Joe’s brand through that process.

Chris Nichols (05:49.059)
That’s part of their product strategy, but they also are fairly creative and unique in coming up with their own mix. So I like that that that mix of products that I think is interesting to banking and what you do. And the other the other part is that I am a sucker for the new. I love innovation, like yourself. And I will always, and I’m known in my household, for just buying whatever’s on that end cap. Every Trader Joe’s has an end cap with all new products, seasonal products, etc. And whatever that is, I’ll try. I’m a sucker for that. Like I don’t care.

DJ Seeterlin (05:50.651)
Mm-hmm.

DJ Seeterlin (06:12.209)
Mm-hmm.

Chris Nichols (06:18.992)
I care what the price is, what the packaging is, I’ll just buy it and throw it the cart. Keep going on that.

DJ Seeterlin (06:23.247)
Yeah. Yeah, well so they they they’re intentional about keeping interesting things there. They’re not focused on the commodity. In fact, I would bet that most times you can’t even find ground beef in the store because it becomes a commodity item that that they’re not going to be profitable at, which speaks to what you said before about, you know, I go to all three stores and they’re okay with actually being not your only store. And hey, lots of banks th you know, maybe we need to get familiar with that concept that we’re not our customers’ only bank either.

but we can be a specialty purpose provider for them that meets a need and solves a problem with those unique product mixes that we offer along the way.

Chris Nichols (06:59.139)
while I would think nothing of go and I do use Instacarton and and others to get my groceries

from a Publix or my Safeway in California here, or even Whole Foods, I would never do that to Trader Joe’s. I find so much enjoyment just exploring the aisles and seeing what’s that paint for me, I mean, and it it it resonates with me like that’s what we need to do at in part with our branches to drive foot traffic. So just like that NCAP that makes it interesting for me to always want to check it out that I I would lose something online. Like can we can

Can we draw some analogy here for the branches?

DJ Seeterlin (07:39.98)
Well, I think we can, if that’s your strategy though. So I hesitate to say that we need to do that because I think for them that’s their strategy and and like you said, you’ve got three grocery stores in town. They have three different approaches and you have three different reasons for going there. So you might be able to do exactly that. And they they have chosen that that is their path and they’re not competing with those that are enabling Instacart. In fact, you can’t use Instacart with Trader Joe’s to buy your groceries. You there is no Trader Joe’s website to go and see what they have online.

Chris Nichols (07:45.411)
Sure.

DJ Seeterlin (08:08.911)
Because they understand their target customer is the adventure seeker that’s looking to find something interesting. And they’re not going to win by having it up on their website and you just buying it and pulling it in and putting it in your car. So yes, I think there are opportunities for us to create something interesting and and maybe it’s you want to drive foot traffic, or maybe you want to, you know, you know, enable it through a digital channel, but we can create unique mixes of products that solve problems that are interesting to our customers.

But I think understanding it f first who’s the customer you’re trying to solve for and and and aim at that. it’s helpful for me just kind of stepping back a little bit too, this concept of the of the Trader Joe’s because when we talk in community banks, we say, well, I need to serve my whole community. And well, Trader Joe’s is a grocery store. Anybody can go in Trader Joe’s, some are just gonna like it more than others, right? And some are gonna anybody can go in in the bank, but that’s some might like it more than others. And and that’s okay.

But anybody can come in my community bank along the way. and that that gets interesting, but then you might get some pushback that, hey, well, if you do that, then you know, I I’m gonna alienate a lot of people. If you look at the the top brands in the United States, Trader Joe’s is always in the top ten. They’re they’re by far the most popular, you know, grocery store, food provider, even though they’re targeting a segment in there. I had this conversation with our

a director of operations, Grant Garber, and he you know, I used to go to Trader Joe’s all the time, but we don’t anymore. And I said, Well, that’s because you had triplets, man. You know, they’re they’re not built for you. The aisles are narrow, you know. They’re they’re not race car grocery carts to push your kids in, you know. They they don’t have to pull up and somebody puts the groceries in the back. They understand that and they’re okay with that. And I I think that’s like enlightening to like be okay with not being perfect for everybody.

Chris Nichols (09:44.878)
That’s right.

DJ Seeterlin (10:03.419)
that you can’t be perfect for everybody. You end up being, you know, a mile wide and an inch deep in that process.

DJ Seeterlin (10:11.129)
I lost your audio, Chris. You’re on mute.

Chris Nichols (10:18.005)
My bad. your analogy goes pretty deep, and one of the things you said to me that really resonated is I shop at Whole Foods, as I mentioned. They are probably the highest margin outmarket grocery store that I use. It is hard to find someone in the aisles to help me around there. And you pointed out to me that in Trader Joe’s, so I go into a my public safeway and they are stocking everything at you know by 6 a.m. and they clear out.

See anybody in there, but their aisles are packed of people. Trader Joe’s does it a little differently. Explain that.

DJ Seeterlin (10:55.013)
Yeah, so they’re making strategic trade-off choices and and with you know a a safe way might be saying, What’s the most efficient way I can stock that shelf, right? What’s the most efficient use of labor that I can do that with? And Trader Joe says, you know, actually, the thing I want to focus on is making sure that I’m enabling our customers finding unique things and supporting them, and maximizing revenue per square foot. And those two things actually come together. and in their model.

They have they have their people stocking during the middle of the day and those same people work the register as unload the truck and and handle all of those things. So they’re rotating the staff because they want those people to understand everything that’s going on. And so when a customer walks up and says, you know, hey, where is that chicken salad? They say, actually, let me tell you I just had that. It’s great. Let me walk you over to see where it’s at. You don’t struggle finding somebody because they’re intentionally placed in the aisle there. You know, they’re doing the activities right there.

and then it it circles back to the the revenue per square foot because they’re making choices not to have a stock room, right? They don’t have a big s you can’t say, Well, do you have any in the back? They’re really unloading straight from the truck to the shelf, right? And they’re saying, you know what, I’ve got this many square foot and I’m gonna maximize that and I’m not gonna I’m not gonna use it for things that aren’t revenue producing, that aren’t customer focused. And I think that really speaks to banks too.

You know, I think about you know, our backroom operations oftentimes we’re we’re moving boxes. You know, how can we reduce the time moving boxes? How can we maximize the time that we’re serving a customer and being there and being available to them?

Chris Nichols (12:31.005)
And to your point, their workflow is such to to to maximize that. So they’ve res they’ve redone re architected their workflow and and did away with their back office to get more selling space and to make their employees more intelligent about their products. And when you said that to me, I think, well, any given bank, their employees probably only fifty percent, sixty percent of their employees actually use their bank. You are never short of opinions at Trader Joe’s. Everyone has their favorite

food whenever you check out I’m sure this is by design that they say yeah you got you gotta try this popcorn over here too or then that that caramelized popcorn is fantastic like I just had it today. Like they eat their own cooking and I think we need to do more of that in banking particularly with some of our products that some of our employees never touch. I say that too because I just went into a chase bank and the people couldn’t tell me how to calculate interest on their CDs. They’ve lost that that that muscle and as a result they had to

DJ Seeterlin (13:09.776)
Mm-hmm.

DJ Seeterlin (13:28.402)
Chris Nichols (13:30.869)
like ask someone like you’re crazy you’re a banker and you can’t re dupe you can’t duplicate your calculation on a basic C D there’s a problem there in banking

DJ Seeterlin (13:39.537)
Yeah. Well, I think you know, so one of the things you talked about there are are those people. And when you talk to somebody in the Trader Joe’s, they’re gonna be excited. That’s by design. Again, that’s by strategy. And so their their selection and development of their employees is structured around that. and I think that’s something we can learn from too. Because when I when I talk to folks they say, Well, I want the best people or I wanna have great service. But what does that mean? Because it’s actually different.

depending on the segment you want to aim at and the the people you want to serve, right? So if you are trying to you know, your your public’s version, or we had a a local grocery store chain in Virginia, UCrops, that was known for having great service. And their model was they were going to drive the

the cart to your car and load the groceries in your car. That was their service model. They would not dare ever suggest a product because that would be deemed as pushy, right? And so for them, great service looked very different than a Trader Joe’s great service. And understanding what that means really can drive, okay, who do I want to select? Well I want people that are excited to t to to explore products and excited to tell people about products. And that’s exactly how I’m going to drive my my employee development work.

And and that speaks to us as bankers too, right? As we’re trying to figure out what does great service mean to our segment. And and w we c we can’t be all the things to all the people. We have to figure out how to be really good at serving the customers that in the way that they want to be served.

Chris Nichols (15:09.525)
And you touched on this briefly, but hiring and training is the core part of that for Trader Joe’s. I imagine their employees skew more intelligent than the average grocery store worker, yet I think more interesting. So where a banker would pass on someone in a you know coming to an interview in a t-shirt, a knit cap, and a sleeve of tattoos, Trader Joe’s is hiring those people, and I think as a result makes

it a little more interesting, they’re all interesting to talk to, so I think that is part of your point that, you know, that’s how they hire from the very start and then trade accordingly.

DJ Seeterlin (15:49.009)
Well, I think understanding that filter of what makes a great employee to make great service and and and deliver that to that customer is really important. You know, in in a very traditional bank conservative environment might be somebody who doesn’t have any tattoos or visible tattoos. For a Trader Joe’s, it might be somebody who’s gonna be really engaged and excited to talk about finding new things. You know, understanding that filter is the really important thing and then applying that appropriately inside the organization.

e trying to do all those things becomes a challenge because you know as an example in in our bank or or I think many banks you find that people are in the branches may be concerned about encouraging a customer to select a certain product. They think, I’m being too pushy, I’m being too salesy. But if you look Yeah. But on the flip side, if you look at national surveys, they say they expect their banker to recommend a product that’s the right fit for them. Right. And so how do we you know

Chris Nichols (16:34.839)
Or I have liability.

Chris Nichols (16:42.305)
Exactly.

DJ Seeterlin (16:45.042)
Well, if our customer actually wants that, let’s figure out how to help serve them.

Chris Nichols (16:49.23)
That’s right. And I’m I’m very sensitive to that. and I use that as my restaurant test that when I go into a restaurant, and anybody that says everything’s good on the menu, I know that nothing’s good on the menu. Like there’s a high correlation there. And the server that says, no, no, don’t order that. You gotta try the lasagna here. Like, that’s my server, like that’s good service to me. Like, you have an opinion. I may not agree with you, but give me your opinion. I’m paying you to have an opinion. I want that from a banker too.

DJ Seeterlin (16:57.756)
Mm-hmm.

DJ Seeterlin (17:10.93)
Uh-huh.

DJ Seeterlin (17:15.088)
Yeah, yeah, I mean th that’s that’s the service level that you’re looking for.

And I think understanding that as we were doing research around this and and kinda came to Trader Joe’s as a great case study, part of the work was understanding that like a Disney customer service, which is known for being great, is different than a Trader Joe’s, is different than a USAA or a Zappos. They’re all great customer service models, but all very different. A Zappos is about having something different and interesting and exciting. The unexpected happen. Well, USAA really doesn’t want something unexpected to happen when you call and ask, you know

You maybe maybe somebody a family member’s deployed and they’re trying to deal with an issue they don’t want unexpected, right? Disney’s about making sure that you have a great experience, but it needs to follow a very specific structure. We one of the things we say you don’t ever see smoking Cinderella. She’s not gonna be there with a cigarette, you know, taking a break. They’re they’re following a model. Like, you do a great thing as long as you match our model exactly. And so, my god, what what is it you’re trying to do and make sure that

Chris Nichols (18:04.207)
huh.

Chris Nichols (18:11.147)
Exactly.

DJ Seeterlin (18:15.087)
Everything aligns with that. And I think that’s what I say the Trader Joe’s case study has been a great example for us to see and and get comfortable with the idea that we can we can structure how we do business and the choices we make and still be a a a great corporate citizen and a great service provider to our customers.

Chris Nichols (18:32.364)
And so is there anything else in the Trader Joe’s model that you want to highlight for banking?

DJ Seeterlin (18:35.309)
my gosh, it is so deep. We now you said you’re within a mile. D do you drive to the Trader Joe’s, Chris, or do you walking? huh. Okay.

Chris Nichols (18:43.202)
combination, I I often walk and take the dog. I will take various modes of tran transportation by bike, but in general I drive. I drive I like the shop, so I drive down the street and I’ll stop at each market if I have to and pick up everything that I like.

DJ Seeterlin (18:56.815)
Okay. Now it it might be synonymous across, you know, where you’re at, but to all the stores, but what I think what you’ll find often is that the Trader Joe’s actually has bad parking.

right. And it’s it goes back to those strategic choices of okay, value focused means I need to maximize revenues per square foot, which means I’m not going to to overspend on parking or overspend on square footage in my in my building, in my property. I need to maximize that. So routinely you’ll find that a Trader Joe’s actually has really tough parking, but that’s a trade-off. we are we are as bankers often very uncomfortable with trade-offs.

Right. And this is, you know, we’re like, I need to have the I need to have the best, you know, of everything to serve our customer. Well, in this case, they actually have really bad parking because they made that trade-off to deliver those prices. Or that’s why the nuts are stacked on top of the freezer section. Or why the they have, you know, one or two serving items in their food cabinets and not the big family packages. You know, they don’t have the the giant five gallon buckets of detergent. They’ve got what you need for their target segment.

those are trade offs and getting comfortable with trade offs I think is is really helpful in the process.

Chris Nichols (20:08.824)
We don’t do that enough in banking, but and I highlight that you can get away with bad parking and even suboptimal locations because they made it a destination point. Their business model is such that I don’t care about parking. I will walk a couple blocks if I have to, which I wouldn’t at a publix or safe way, because I find it so interesting, because I want that experience and so

DJ Seeterlin (20:15.655)
Mm-hmm.

DJ Seeterlin (20:26.44)
Yeah.

DJ Seeterlin (20:32.231)
Right. You you’ve made it so they’ve made it so compelling, and that’s what we hope to do. We make it so compelling that there’s some friction, some trade off that we’re willing to make that our customer may be willing to make to to benefit from that because we can’t we can’t spend on all the things, right? They can’t spend on having massive parking lots and massive buildings and having all the things. So they’ve they’re making choices. Uhhuh.

Chris Nichols (20:52.94)
Which is the heart of strategy, right? That’s that’s what we have to do as strategists, bank strategists, make those choices and decide, you know, every customer isn’t our customer, who is our customer, and focus there and what work backwards of what that journey looks like and how our choices feed into that journey for the benefit of the customer and for the employees as well.

DJ Seeterlin (21:13.469)
There there’s one more piece I wanted to go back to, Chris. And we were talking about stocking the shelves. And this this became really helpful for me as I was trying to figure out, okay, how do we actually use this approach when we’re trying to make the kind of n tactical decisions? You know, we’ve got maybe our project that’s being brought forward that says, you know, do I wanna implement this new technology to support the back office? Do I wanna implement this new customer-facing product? And both have have great value.

And that stocking change that Trader Joe’s has, that choice that they do to not have a back room and they kind of stock directly from the truck is an example of of really changing the process entirely. Like they didn’t invest in faster forklifts to unload the truck, right? And I think sometimes we invest in faster forklifts and we just need to back up entirely and go, How could I reimagine this model?

to maximize the time that I’m customer facing. And it might be a big investment, a big choice and a change and it’s more trucks for them on the road to deliver these things. But I don’t need faster forklifts today. I need more people in the aisle with the customer.

Chris Nichols (22:18.329)
Talking to them, be being interactive. anything else in terms of compensation, layout design that you wanna highlight?

DJ Seeterlin (22:20.976)
Right. Yeah.

DJ Seeterlin (22:27.879)
Well, I mean, I think you will find that in in when I study this that a Trader Joe’s employee does tend to be a higher paid employee. it does be you know, th they’re invested in in in the business. They’ve got very similar job titles. I think they’re all crew members, assistant crew leaders and you know, and crew leaders. Like it it’s it’s a very flat organization. I don’t think though that you can do any of these things in a silo.

Right. And so I think sometimes there’s a there’s a desire to say, okay, well, we just need to pay a lot more. Well, maybe, but let’s let’s make sure we’re compensating for exactly what we’re looking for. And that aligns with the overall strategy. So then we definitely want to make sure that we’re attracting the right people. But they’re not individual choices. They’re they’re interconnected. We’re they’re paying more for the right person to do the right thing, not trying to maximize on like cost savings on labor while I maximize on cost savings on digital while I maximize on this, and then wonder.

Where all my customers went.

Chris Nichols (23:27.875)
Fantastic. Well, and lastly I’ll I’ll highlight that one of the things I love about Trader Joe’s is and they used to do this more, I hate to see them get away from it, but when you read their product descriptions, I I think they do a paper flyer in our newspaper or mailbox insert. You know, there’s it’s it’s always a story. And so they tell me a story about how they source their Colombian coffee, and I get invested in it, and it drives my product selection, which I love.

love ’cause I am a sucker for a good story like many of us and so I appreciate that about their product marketing.

DJ Seeterlin (24:04.744)
Well, a as a as a marketing professional that you are, Chris, I I like that you notice that, but also like that’s almost the extent of their marketing, right? These these paper flyers that they put out, that I think it’s called the Fabulous Flyer or something like that. And it was originally made by the CEO, like in Microsoft Publisher, and like the design really hasn’t changed that much, you know. They’re not spending a ton of money on this stuff, you know, but it matches matches their brand.

Chris Nichols (24:14.093)
Yeah, right. Yeah.

That’s right.

Chris Nichols (24:24.399)
That’s right.

DJ Seeterlin (24:32.646)
You know, they give value focus but do something interesting and unique. it it all ties together along the way.

Chris Nichols (24:40.547)
Well, DJ, thank you very much for highlighting this aspect. I think you’ve given me and our listeners a bunch of things to think about, like how we can take some lessons here and apply it. Are you before we leave actually, at at Chesapeake, what how are you incorporating this?

DJ Seeterlin (24:59.688)
That’s great question. So this was really helpful for us to get comfortable with the idea of segmentation. So I I mentioned before that, you know, oftentimes at community banks we feel like we’re constrained that we need to serve the whole community. And so when we’ve come back and said, well, I think maybe this isn’t the right product to invest in or or this isn’t the the right service, there’s that pushback of well, we’ve got to make sure we’re serving the whole community. And I think this helped us get comfortable that we can be in our community and serve everybody that comes in. It’s just there’s gonna be some

things we’re better at and some customers that we better serve. So that really helped us move forward in that conversation. And now we’re really digging deep into understanding the segments that we’re best equipped to serve and that and problems that they have that we can serve better than others to be compelling, to, to drive them to choose us along the way. So we’ve done a lot of work as a as an organization to understand what are the unique things we can bring to market.

And then try to dig into what what is it our customers like and how can we emphasize and focus on that.

We started with because we are we are a multi-dimensional company. We’ve got several divisions that operate, but they’re not all the same. I’ve got one division that that only serves high net worth individuals and one division that only serves small businesses. So I can’t say that we are a a business only bank, right? I I can’t see we can’t pick it out by demographic, but we can try to understand the things that we bring and their capabilities. and for example, for us, we know at our scale, we’re not going to win on lowest price.

So let’s stop trying to win on that. We s we know that our customers are value focused, so we’ll be attentive to that. but I I can’t beat Walmart and I’m not gonna beat Chase at price. and the customers will either want the lowest price or me to deliver something of value.

DJ Seeterlin (26:51.188)
And so we’re focused on what value can we bring, what problem can we solve. And and we think we’re better positioned to solve problems with access to people. We’re not going to maximize on on the the most efficient process sometimes. We might lean into making sure that the the people are highly accessible. We’ll lean into the complex problems instead of the ones that scale the easiest along the way, because that’s something where we’re we’re better suited to serve. and ones where our reputation and trust

make a difference. And and the example I give is that like our our national lending division, Flexant, that helps customers and and banks serve alternative financing, they they literally compete with loan sharks. If a customer wants to deal with a loan shark, that’s cool. I can’t compete with that. but if you care that, you know, it’s a community bank on the back helping and serving you, well then, you know, let’s lean into that and let’s make sure that we’re serving you the best way possible.

Chris Nichols (27:36.717)
Yeah.

Right.

Chris Nichols (27:49.432)
And s and so let’s let’s take an example. Like in this age of AI and and genetic AI, like every bank is wrestling this. How do you think about that in terms of in terms of execution of AI within your model with respect to Trader Joe’s, for example, like

DJ Seeterlin (28:07.966)
Well so

If if you want the Trader Joe’s tie back, I’ll I’ll I’ll go back and say Trader Joe’s doesn’t invest much in technology, right? Like so the the website’s not great, you can’t do the Instacart. they they traditionally just don’t invest a ton in tech because they’ve made a strategic choice there. We we are we are investing in technology to make sure that our customers have what they need. So we we try to think about table stakes and table stakes evolve, right? So it’s I’m not 1990s table stakes or or two thousand five table stakes, but whatever the table stakes.

stakes are for today, I need to meet that, but then find those other things to lean into. as it comes to AI, I I can’t have a better chat bot than Chase or Bank of America, right? I might need to have certain capabilities, self-service digital capabilities to meet table stakes, but we will lean into how can we better support our people, for example. So how can I enable our people when they’re serving a customer to have the best information, be able to offer the best advice

and in the most efficient way. so we’re we’re supporting how we can enable our people. So in particular with AI, we think of it as a tool, not a replacer of people. And when you and I have had these conversations, I’ve said, you know, I do want to add capabilities and efficiencies, but it’s so I can free our people up to do more for our customers, to provide even more service, to serve even more customers. We’re we’re looking at it as a as a tool to help us grow and and produce more.

Chris Nichols (29:36.014)
And so for any bank looking to evolve their AI strategy, I think you’ve given us a good framework in that you an AI strategy may be, hey, we want to employ AI, we want everything to be more efficient, but we also want to highlight our human connection, our authenticity with our humans. And so we need to deploy AI to the extent that it we can help the hu our our bankers be more human and not worry about this data and the details and and the execution of the the mundane, but really put our

humans out front, I think that’s kind of what you’re saying, and I think that would be any, you know, a good strategy for any bank to evolve to as they now, you know, probably have a co-pilot and and maybe an open AI application in their bank, but as they look ahead, like choose vendors and choose AI functions that that underscore the humanity of your bank and not the opposite and not replace humans per se.

DJ Seeterlin (30:29.671)
Yeah. I I give an example. one of the the partners we work is Jack Henry.

And they’re building on a new exception processing system that’s AI enabled. And so it’s not making an AI-based decision is to determine whether to return a check or not, but it’s providing a lot of background information to help that banker make a decision, to help them understand, hey, you know, this is what’s happened the last several times with this customer, this is what the decisions we’ve made some with similar customers along the way. So we’re being fair in the in the process and the in and we’re just feeding more insight to be able to make better decisions.

So somebody’s not accidentally just making a blind choice. We want to make, you know, better enable them to do that. And I think AI can really can net can really support that. Much like the, I’m gonna go back to the forklift analogy. Like, I don’t want to speed up our forklifts, but maybe we can use AI to eliminate our, you know, some of those pieces, some of that box moving, so that our people are are right there more interacting with the customer.

Chris Nichols (31:28.175)
Yeah, and with regard to that strategy, like an execution might be where most banks will put AI out front answering the phones or answering the chat. A bank like yours or a bank in the Trader Joe’s model may want to do the opposite. They’ve put the human out there and then put the AI behind the human. So maybe the human kicks off the AI process if it knows it can handle exception reporting and reggae issues. Like maybe that’s when you evoke the AI, but it’s the human first. And so that’s a completely different way to think about the execution of AI strategy.

DJ Seeterlin (31:49.737)
Yeah.

Chris Nichols (31:58.129)
within your model driven by like the Trader Joe’s mentality, so to speak, that most banks will overlook and just say, you know, the vendor’s saying that this is a better IVR system, we’re gonna go ahead and use it. And maybe if you punch out, you know, twelve twelve branches deep, you’ll get a human, which may be the exactly wrong strategy for your bank that wants humanity out front.

DJ Seeterlin (32:20.349)
I heard Jim Marus say this a a while back, because we we talk about human in the loop. I hear that all the time. and I heard him reference AI in the loop. And I really like that terminology better because there there’s a there’s a person that’s really owning this process, but we’re enabling them with AI. We’re putting AI in their loop with them to help and enable them. So we’re we take somebody and help level them up quicker and faster, enable them to to do things. I’m doing things I couldn’t do before, you know.

Chris Nichols (32:26.286)
Yeah.

DJ Seeterlin (32:46.217)
We’re we’re helping enable the people by using AI to accelerate and give them the feedback, the insights, make decisions we never could have before because it would have taken us a month to get a new dashboard with the new data to make a decision. You know, help us offer the different product sets. I think there’s gonna be new not just faster, but better and different things than we ever could do before because we’re enabling the people to solve these things.

Chris Nichols (33:10.127)
Well, thank you for helping lead the industry. With that, I will leave it there. DJ, always a great conversation with you. I look forward to having you back on and look forward to seeing you out in the field and learning more from you.

DJ Seeterlin (33:20.841)
Yeah, really enjoyed talking to you, Chris.