Salsa, Tortillas, Dulce de Leche, and now Hugs

I read in the Wall Street Journal (September 14 - 15, 2013*) that hugs are an issue now in the United States as many more people hug than ever before.  My first reaction was that as tortillas overtake white bread and salsa overtakes ketchup, hugs overtake social distance.  Is this the Latino influence? Now the WSJ article talks about how to defend yourself from huggers. That is a serious departure from the nature of hugging in Latin America and other "hugging" regions of the world where the hugging is seen as a welcome sharing of human warmth and reassures people of their relationship.

When I was young, in high-school and then in college in Mexico, every day, I had to hug and kiss many women, which I thought was nice, and hugged many men as well, which I felt were my dear friends. It was routine, the business of social life.  You hug those you care for and those you want to keep as part of your circle of friends.  Also, it felt good. It was reassuring. I felt I belonged.

Hugging feels good.  It releases chemicals in our body that make us feel good. A most interesting substance is oxytocin which contributes to our social happiness and well being. It is known to be released when people touch and hug and helps people bond together.  Hispanics are good at this. I believe this is an important contribution that Latinos and other "hugging" people are making to US society.

Chipotle, mango, salsa, papaya, tortillas, cilantro, yuca, and many other flavors are clearly now part of the mainstream. Also, Latin music and architecture have become part of the American mainstream.  But that is only the part of the culture that is clearly observable.  What about the less observable parts of the culture?  What about the subjective culture composed of values, ideas, attitudes, and ways of thinking? Hugging is part of the subjective culture that is now influencing the United States. Subjective because it emanates from primitive impulses, beliefs, and values that take us back to our origins.

Marketers ought to consider that the most powerful insights come from those attitudes, beliefs, values, and perceptions that are transmitted via our cultural groups but that are hidden from view. Hugging is visible, but not its motives and consequences. Touching produces a different social structure. Marketers can capitalize on those motivations and the effects of touching and hugging (haptics) by establishing connections associated with their brands.

Human contact feels good and makes people happy.  Clearly, it has to be appropriate, but Latin Americans don't worry about that. They know when the toucher is a creep.  In low contact cultures any contact can be misinterpreted.  But in high contact cultures contact means care and affection. As we move into a more touch oriented society in the US, our ways of behaving, thinking, and feeling change as well.

Now that Latinos have influenced the US culture beyond imagination, it is not only with the material things of life where Hispanics are making a statement but also with emotions. While marketers have long thought that differences in culture are apparent in the numerous manifestations we observe, now we need to take notice of the more hidden aspects.

Marketers do not only capitalize on high contact cultures when understanding their motivations and bonding feelings, but they may now have a "total market" approach in their hands. Hugging will likely transcend cultural groups.

The author of the WSJ article was trying to help others with larger personal space needs to defend themselves from the rising tide of huggers. Well, another take on the trend is that it is good for you and potentially excellent for marketers who understand cultural patterns.  

In Hispanic Heritage month let's celebrate hugging and all that comes along with it.

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*"The Delicate Protocol of Hugging: For fans of personal space, these are difficult times: America has become a nation of huggers" by Peggy Drexler

Bank of America Should Become a Credit Union

I have decided that the best course of action for Bank of America may be to become a credit union. Despite the regulatory hurdles and government scrutiny that the bank would need to deal with, it may be an easier course of action than trying to catch a break with our industry's trade press, the general media and definitely those using social media to respond to every move the bank makes.

For instance, American Banker published a story last week from Ed Roberts entitled, Bank Transfer Day Spurs Big Membership Growth at CUs. The story cited that the credit union industry had near record growth in the second half of 2011 . . . 'after the ill-fated September announcement by Bank of America of monthly debit fees prompted Bank Transfer Day'. This growth of 850,000 members in the final six months of the year contributed to an annual growth for the credit union industry of almost 1.3 million new accounts, reported the NCUA.

According to my calculations, a growth of 850,000 new members for the second half of 2011 represents an average of fewer than one incremental new account per credit union (not per branch) a day. The statistics are roughly the same when you look at the annual growth rate as well. Assuming that the number of new members represented incremental growth, the 1.3 million new members reflect only a 1.4% growth over 2010 according to the 2010 Government Census. 

How does this become newsworthy? In almost all U.S. major newspapers, a version of this article ran including a reference to both Bank Transfer Day and Bank of America. The Los Angeles Times ran a headline, Banks' Fees Pay Off - For Credit Unions while Forbes ran an even more sensationalized headline, Credit Unions Membership Soars as Customers Spurn Big Banks. Does any other industry get as much press for close to flat line growth? Shouldn't this be more realistically considered business as usual? 

And how confused is the general consumer? Just a few short weeks before these reports, many of the same industry and national news organizations covered the Javelin Strategy and Research study that Bank Transfer Day had just a minor impact on money movement despite all of the media coverage. The Financial Brand covered the conflicting numbers being presented, and even the New York Times ran an article entitled, The Exaggerated Impact of Bank Transfer Day.

For news organizations (including the American Banker) to accept what amounts to unfiltered PR releases without determining if it is really 'news' is detrimental to both the banking and credit union industry, and feeds the 'banks are bad' sharks that continue to circle the consumerism waters. Maybe there should be an article this coming week announcing that each of the top 7 banks (and maybe the top 10) opened more than 1 million accounts in 2011 while being beat up in the media daily. To me, that is far more newsworthy than taking a PR feed from the credit union industry and not doing simple math to determine if generating 400,000 accounts in a quarter or 1.3 million last year even moved the needle.

On top of the aforementioned wide distribution of positive credit union PR by major news organizations mentioning Bank of America in a negative light, BofA received additional negative press last Thursday when the Wall Street Journal ran a front page article entitled, Big Bank Weighs Fee Revamp around the potential of the nation's second largest bank expanding a current checking pricing test that began last Fall. As has become commonplace, virtually all major news organizations ran their own version of the same 'old news'. And if that wasn't enough, a Massachusetts official slammed B of A for testing fees that would "burden" many of its customers. 

Unlike the American Banker article around credit union growth done by one of her associates, Maria Aspan did a very admirable job of covering the double edged sword facing Bank of America in her article entitled, B of A Draws New Fire For Old Checking Fee Test. Her reporting (and many of the comments associated with the article) underscored how Bank of America is in a no-win situation, where transparency is required but very painful.

So, instead of Bank of America trying to defend itself against an ongoing barrage of negative press and negative positioning as the reason for the 'growth' of the entire credit union industry, why doesn't BofA change their charter to become a credit union? Like a local credit union, BofA already does a massive level of community giving through their national and local philanthropy (over $200 million in 2010). They also offer loans and services on a local level, investing in the communities and small businesses they serve. The only thing they don't seem to get on the same level as credit unions is good press.

I don't have anything against the credit union industry or even the American Banker. I just wish that coverage of the industry (and of Bank of America) would be less sensationalized and biased and that the financial witch hunt would end. It definitely isn't good for Bank of America and I don't think it is very good for either the banking or credit union industries.

What do you think?