You DO NOT sell deposits and loans.

Human beings make emotional decisions 

and support them with logic and rationale.

It's a bit of a fault, but it's partially what makes us who we are.  It's one of the many beauties of humanity.

Think about some of your most recent purchases...

"I need that Fred Flintstone sized driver to hit the inch and half wide ball."

"The Louis Vuittons will be 100 times more comfortable and last 100 times longer."

Really?!?!

So, if we are emotional creatures, why does so much bank marketing revolve around "Free Checking!" and a big ol' rate?

The truth is that we do not sell checking accounts ... or loans ... or CDs.  People can get THOSE things anywhere!  Let the Wells Fargos and Bank of Americas of the world take the obvious route - they can afford to be lazy.

You, my credit union and community banker friend, are different ... better ... smarter.  You understand that every single  day - with every single branch and electronic interaction - we are dealing with people's money.  And aside from child care, what is more emotional than that?!?!

No, we do not sell products, we sell TRUST!  

Take a look in your lobby right now.  Those people aren't there for your free checking, and they likely past a competitor or two to get to your branch.  They are there because they trust you.  In their mind, you are the expert.

When you sit down to plan your next campaign or draw-up your next brochure, start your planning where your target audience starts it's decision making ... with emotion.  THEN, you can support it with logic and rationale.

Learn from this retail example.

We bring these marketing philosophies to credit unions and community banks nationwide, and would love to bring them to your institution too.  Contact us to see how.

With nearly 223,000 visits worldwide, we hope that you enjoy this blog.  If you find it helpful, please share it with your colleagues.  Also, check out our YouTube Channel for short video blogs about financial marketing.  

MarketMatch is also a nationally and internationally requested speaker.  Contact us to bring our marketing ideas to your next conference.

Here are the conferences where you can find MarketMatch.

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If We Could All Be Like Boy Scouts

I just spent 2 nights camping with scouts … someone get me a huge mug of java and two aspirin!!!

Aside from the obvious crick in my neck from sleeping on rocks and roots, I took something useful away from the experience.

Wouldn’t we all be better off if we were more like scouts?  Think about how successful you and your organization would be if you were more:

 

Trustworthy: If a scout says, “On my honor, it is so,” that means it is so.  In our industry, in this time in history, what could possibly be more important?

Loyal: A scout will stick with you through thick and thin.  If that means we need to restructure a loan to help someone make ends meet, so be it.

Helpful: When in difficulty to know which of two things to do, scouts ask themself, “Which is best for other people?”

You see where this article is going.  Now imagine a world were we all follow the rest of Scout Law as:

• Friendly
• Courteous
• Kind
• Obedient
• Cheerful
• Thrifty
• Brave
• Clean
• Reverent 

As you move further into your day and attack the remainder of this month and conquer the rest of the year, please try to be more scout-like and to do what you can to move your institution that way too.

Take care,

Eric

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MarketMatch is a full-service marketing firm, dedicated to the credit union and community banking community.  We utilize knowledge-based strategies to help you FOCUS on the right story that will generate the greatest  MOMENTUM and prove the best RESULTS with our written ROI Guarantee.

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The Power of 5

The Good News:Most everyone who walks in your front door needs more of your products!

Nearly all adults have a need for AT LEAST 5 different product categories … 

We call this the Power of 5:

1. Checking:The “spend” account.
2. Access: Ways to get to their money.  All electronic, plastic, and co-op tools.
3. Savings:The short-term emergency account.
4. Loans:Home, auto, credit card…
5. Investments:CD, IRA, Trust, Insurance, etc.

The Bad News:Only 43% of consumers who purchased an additional banking product did so with their PFI.*

As you look at your 2012 budget, priorities and objectives, ask yourself one question:

Do you have at least 5 products in every household?

A focus on your existing customer/member base will be more cost effective, will yield better results and will decrease attrition.

* J.D. Power & Associates report

MarketMatch is a full-service marketing consulting firm, dedicated to the credit union and community banking community.  We utilize knowledge-based strategies to help you FOCUS on the efforts that will generate MOMENTUM and yield the greatest RESULTS for your bottom line.

Learn more here.

Chat with me LIVE!

Or contact me directly (click here).

Be Careful of 'Mental Opt-Out' With Email Marketing

For those who read my Blog, you know that I feel strongly that the email channel is significantly underutilized by the banking industry. Not only do marketers not effectively leverage this channel in conjunction with other direct and mass marketing options, most banks do a terrible job at even collecting email addresses in the first place.

Unfortunately, for those who have begun to use email marketing in support of customer communication efforts, some have gone to the opposite extreme by viewing email as a 'free' marketing tool without giving adequate thought to the importance of relevancy. As many realize in their daily scanning of their email in box, overusing the email channel can have a detrimental effect of the value of this channel and negatively impacting the overall customer experience.


It was with great interest therefore that I read a recent op-ed in DM News written by Mark Smith from Portrait Software discussing the mental opt-out that occurs when a company bombards a customer with too much untargeted email marketing communication, only to have the reader open the email and then quickly hit the "delete' key. The impact of multiple irrelevant emails is to either explicitly receive an opt-out to future email or to implicitly lose the intended reader's trust and attention for future communication that may have been of interest.

As Mark mentions in his op-ed, if you get a reputation for sending irrelevant communications, you are basically asking for mental opt-out. And just because a customer's name doesn't appear on the do-not-contact list, it doesn't mean they are paying attention.

As financial institutions get more comfortable with this channel, it will be important to ensure that adequate targeting is done and that the focus of each email is to positively impact lifetime customer value.

BAI Checking 2.0 Executive Forum Recap

I just finished presenting at the second BAI Checking 2.0 Executive Forum in Chicago where close to 50 financial institutions learned about legislative changes, customer perceptions, new product development and marketing opportunities around the checking account. While only a month has passed since the first Checking 2.0 Executive Forum held in Atlanta, it is obvious that there are a number of changes occurring in the marketplace.

There was consensus among the participants that while consumer trust and confidence in banks has been negatively impacted by the events of the past two years, there may be some uptick in these measures over the next few months if financial results continue to improve and if banks continue to focus on the customer experience.


A significant change from the March event was that virtually all of the participating banks have developed an alternative version of 'Free Checking'. Checking account product innovation has added stipulations to some accounts, benefits for a fee on others and alternative reward structures on other checking programs. In fact, in a quick survey of the participating banks, it did not appear that any of the 'Free Checking' programs were similar.

When discussions moved to how banks are responding to Reg E, there were some organizations that were well on their way towards communicating with their customer base while other banks had not yet begun their information dissemination. Surprisingly, MB Financial out of Chicago shared that they had already achieved close to 85% opt-in from their customer base (and nearly 100% from new customers) by leveraging a combination of postcards, traditional direct mail, phone call follow-up and branch level involvement.

The success of some of the participating banks illustrated the importance of a multi-channel communication process with strong employee involvement and call center follow-up.

Consumer Trust in Banks Continues to Challenge Bank Marketers

While not approaching the high levels experienced before the financial crisis, Americans are slowly starting to show trust in their financial institutions and believe they have their best interests in mind, according to Forrester Research, Inc. But the positive sentiment is not evenly distributed.

Perennial customer experience leaders like USAA and American Family Insurance continued to top the list and bounced back higher than banks and investment firms. Customer experience ratings for super-regional banks like PNC Bank, U.S. Bank, and BB&T also improved significantly from last year
while the largest banks in the US, such as Chase and Citibank, fell to the bottom of the rankings. As can be expected, investment firms and wealth management firms as a group got the worst customer advocacy ratings overall.

So what does this mean for bank marketers? Many banks would be well served to set their brand apart from the industry as a whole and to emphasize ways your bank has your customer's best interest in mind. This can be done through customer advocacy programs and integrated into every communication to consumers. This is especially important as we move towards the communication of Reg E to customers and try to position 'opting in' as a beneficial option for some customer segments as opposed to a way to generate revenues for our banks.

What Banking Needs to Become

In this quarter's Strategy + Business Magazine, Vanessa Wallace and Andrew Herrick discuss the significant changes in the banking industry over the past few years and how bank's business models, capabilities and practices must change as well. In their very good article, they emphasize that the purpose of banking and the needs of the customer have remained relatively consistent with regards to safe havens for savings and consistent access to credit for investment.

The environment has changed, however, with the competitive landscape changing, the regulations increasing and the public trust eroding. In addition, the times of high growth have ended.
They argue that banks will need to revert back to a much more simple value chain, where there are far fewer intermediaries between the customer and the bank. In short, banks will need to get closer to the customer.

From a marketing perspective, they propose that leading banks will need to sharpen their capability for capturing customer information in a timely manner. This means analyzing customers’ product holdings, cash flows, behaviors, and personal circumstances. Depth of relationship will be more important than breadth. It will be more valuable for a bank to have an 80 percent wallet share of 1 million customers than a 10 percent share of 8 million customers. Greater wallet share permits greater insight into buying patterns, credit risk, and loyalty, enabling a stronger, more profitable lifelong customer relationship. For their part, customers will find that scarce credit lines are more accessible when they concentrate their banking activities among fewer providers.

In addition, banks will have to innovate to better serve the needs of their more loyal customer base. This will take the form of better cash flow management tools that utilize multiple channels. In addition, the emphasis on insurance and investment services will most likely increase since the goal will be to serve all of the client's financial service needs.

Consumers will be rewarded for their loyalty with better rates, fewer fees and easier access to scarce credit.

Making Sense of it all...

Not sure if you have heard of Andrew J. Hall...but he has become a symbol for all bankers. He is the head of a company called Phibro, a small commodities trading firm in Westport, Connecticut.

The deal is that Phibro is a subsidiary of Citigroup. They trade energy commodities and have made a ton of money....almost $2 BILLION in net revenue in the past 5 years. That equates to about 20% of Citigroup's net revenue...think about that. One guy and his team of 54 employees have made 20% or more of Citigroups operating profit!!

Impressive....

Perhaps more impressive, or scary, depending on your viewpoint, is the $100 million bonus he is about to receive....the 2nd $100+ million bonus he has received in the past 3 years.

Earned? No doubt. Citgroup obligated to pay? Yes, it is in his contract. Out of sight bonus? You bet! I will offer no other commentary...other than to say you know what I could do with $100 million???? (maybe buy a German castle with 150 rooms like Andrew Hall did!)

This gives us all cause to pause....certainly our community banks and CUs are not paying such bonuses to the degree of Citi, but we will all be, again, grouped into one pot. All taking a hit on our reputation and trust factors.

Today, we are hosting a Reputation Management eCollege session....this is EXACTLY why you have to proactively manage your own reputation. Because if you do not, someone else will!

I encourage you to proactively think about your brand and your reputation...there has never been a more important time!

With the strategic planning "season" coming upon us...you need to add this to your agenda!

Cheers...

Bruce Clapp

PS: Remember, we can help make 2010 the "Best Year Yet" with our proven strategic planning process!! Give us a call or email...

Here is the article on Andrew Hall

When Is A 33% Confidence Rating A Good Thing?

Gallup recently released a summary of Americans' confidence in banks. While overall confidence in banks has fallen to 18%, on a more positive note, many Americans have confidence in their primary bank where they conduct most of their banking business, with 33% saying they have "Quite a lot" of confidence in their primary bank.

It's pretty abysmal when the majority of banks have a confidence rating that is lower than the final approval rating of George W. Bush (who had the lowest approval rating in history of any politician who was not indicted for something).  While 33% have expressed "Quite a lot" of confidence in their primary bank, it's the other 67% that should be keeping us up at night.

The greatest casualty in this whole financial debacle has been the loss of trust in financial institutions.  Now, more than ever, banks need to step up their efforts to project a message of safety, soundness and stability.  One of the keys is through financial education, which a lot of banks do not do well.  People are scared--how to pay their mortgage, send their kids to college, and have enough for retirement--and they are being overly protective of their precious few resources.  Banks need to do a much better job of outreach to retail and business customers in an advisory capacity to outline financial options that are in the best interest of the customers.  

This seems to be the ideal path to regaining consumer and business trust one institution at a time that will inevitably begin to raise the status of the financial industry as a whole.