Marketing Tea Party by Ron Shevlin

I’ve been having a recurring nightmare about what the world of banking will look like post-apocalypse.

If by “apocalypse” you think I mean post-financial crisis, ha ha, no. That’s not the apocalypse. The end of free checking? Now that’s the apocalypse.

Banks have relied on free checking accounts for a while now to attract new customers. OK, to be exact, they’ve relied on what they call free checking accounts. Because it seems to me they’ve been anything but free. Oh sure, there’s no monthly fee for the account, but the people who open them still end up paying overdraft fees, ATM fees, and who-knows-what-else fees.

I say “who-knows-what-else” because, well, I don’t know. My checking account isn’t free, but because I don’t overdraw, don’t use ATMs that I shouldn’t be using, and keep way too much in the bank across a number of accounts, my bank wouldn’t dare charge me any fees. So I’m really not clear which is really the free account, and which will go by the wayside in the near future.

But it does seem possible that the so-called free accounts will be discontinued — and, in fact, a number of banks have already changed their product line.

As a result, there’s a lot of discussion about what’s next and what banks will do in this post-apocalyptic, post-free checking world.

Personally, I’m not sure why there’s so much interest and speculation.

Despite claims that it’s really hard to switch banks, most banks I talk to still tell me their attrition rates are in the double digits. And this doesn’t even count what one bank calls “silent attrition” — accounts that don’t close, but see their balances and activity dwindle to next to nothing.

So the reality has been that free checking has hardly been the solution to anything, except possibly attracting new accounts that might not stick around for very long.

In 2008 I analyzed the site visitor data from FindABetterBank.com for an Aite Group report I wrote. What I discovered was that the 4,000 consumers who had visited the site fell into one of three buckets: Those looking for accounts with: 1) No fees; 2) Superior technology-based features (i.e., online banking, bill pay, etc.);  and 3) The best interest rates (and who were willing and able to keep $5000 or more in their accounts to earn those rates).

This might not seem earth shattering, but walk into any bank branch, ask about checking accounts, and see if the person you talk to is able to explain anything but the free account.

The biggest problem banks have in this post-apocalyptic world is that they don’t know how to sell anything except their free account. If that goes away, what are they going to do?

That’s where my nightmare comes in. My nightmare is like that Bizarro Jerry episode from Seinfeld where there’s this parallel universe and three characters the exact opposite of Jerry, Kramer, and George.

My nightmare is bizarro banking. Except that in this parallel universe, the characters the banks meet aren’t their opposites, but an image of what they will become. Namely: The telcos.

Yes, in my nightmare of post-apocalyptic banking, banks adopt the tactics of telcos, and seek to reduce their attrition problem by locking customers in with contractual arrangements and promos.

Open up a new account, get your fees waived for six months, and agree to a 2 year term. Then after the six months are up, and the fees are about to kick in, the banks will tempt you with an offer to extend the fee waiver by another six months if you open up a savings account or another checking account, and extend your contract by another year. And so on.

Hey, if you can’t earn loyalty, you might as well buy it.

The problem, here, comes down to value. Or more specifically, lack thereof. Perhaps this is overly idealistic, but I was thinking that it might be nice if banks turned to providing more value to the customer relationship as a way to build loyalty, instead of searching for contractual ways to lock people in. Maybe it’s just me, but the last thing I want it is to deal with more firms like the telcos.

I guess the question is — in order to transform my nightmare into a pleasant dream — what could banks do to add more value? Plenty. Just not enough space here to get into it.

I really like credit unions.

No wait, I take that back. Truth be told, I couldn’t care less about credit unions. I like credit union people. It’s because I like them that I like to see credit unions succeed.

You see, I don’t believe that credit unions are inherently good. Anybody can claim that their mission is to help people. The proof is in the pudding.

This also means that I believe that banks (big ones, in particularly) aren’t inherently bad. Got news for some of you: I do business with a large bank. Have done so for many years. It treats me very well. And guess what: I’m not that delusional that I believe that I’m the only person it treats well (and you shouldn’t be, either).

But try telling that to the media, or to credit union people. They won’t hear it. Instead, it’s a constant stream of tweets with links to the MoveYourMoney thing. Or today, it’s a link to a CNNMoney article that says consumers’ relationships with big banks is the “equivalent of a dysfunctional relationship.”

What’s the reason for the perpetuation of this “dysfunctional” relationship? According to the article, it’s because “switching banks is simply too much of a hassle for many Americans.”

This is wrong. Absolutely wrong.

Switching banks is a piece of cake. One of the simplest things you can do. There is no shortage of banks that will be more than happy to make it a painless process. And if I’m not mistaken, there might even be a few firms that offer tools to banks and CUs to help them help consumers switch banks.

The overwhelming reason why consumers — make that some consumers — persist with a “dysfunctional” relationship is that they simply don’t care.

They don’t care enough about managing their money, or managing their financial life, or their relationships with their financial providers to switch. They’d rather spend their time researching the differences between guitar picks, or camera lenses, or whatever, than they would figuring what bank (or credit union) is best for them.

Credit unions’ biggest enemy isn’t the big banks. And it isn’t the difficulty of switching banks.

Credit unions’ biggest enemy is APATHY. When people care enough about managing their financial lives, they will care enough to find the right providers. (Which may — or may not — be credit unions).

The paradox here is that money is really really important to us, but managing it? Not so much.

For credit unions to succeed on a far grander scale, they have to get more people to care about managing their money. And not setting up big banks as some kind of Golem to be despised and shunned.

The trends are in CUs’ favor. There are three forces in play here: 1) The economy has forced people to become a lot more disciplined about managing their finances; 2) The tools available to manage one’s finances continue to evolve, and thanks to the Internet, they’re easier than ever to get data into and use; and 3) Gen Yers are whole lot more involved in the management of their financial lives than previous generations were at that age.

And yes, public sentiment against the big banks is clearly helping the CUs’ cause, as well.

But public sentiment is a fleeting thing. Consumers have an incredibly short span of attention. We have an amazing to forget and forgive. One teary confession and everything is back to normal (ain’t that right, Jimmy Swaggart?)

It’s time for credit unions — no, make that credit union people — to quit bashing the big banks, and to start focusing on their real enemy.

[Note: I'm not the only one who believes this. See this blog post from The Long Tail of Banking]

I got an email this morning from Hilton Honors letting me know that I could redeem points for a charitable contribution to the International Federation of Red Cross and Red Crescent Societies to help earthquake victims in Haiti.

On one hand, it’s a great idea to let people use their rewards points to help charitable causes.

But on the other hand….

….The email notified me that 10,000 of my points would result in a $25 contribution to the above named charities.

So much for the great idea.

Ten thousand points is almost enough to get me a free night’s stay at a Hilton Hotel. If we assume I need 15,000 points and that a hotel room goes for $150, then — to me — those 10,000 points are worth about $100.

So what — as a Hilton customer — am I left to believe here?

Simply that Hilton is more concerned in finding cheap ways to burn up their rewards liabilities than it is in helping the people of Haiti.

Marketers looking to participate in relief better make damn sure their motivations are in the right place.

Back in 1997, a colleague of mine at the firm I worked for at the time wrote a report called The Third Skill. The premise of the report was that, while there were people in firms with marketing skills, and other people with IT skills, what firms needed in order to capitalize on the emerging New Media opportunities were people with a third skill: The ability to combine marketing and IT.

Roll to clock forward to 2010, and while the term new media might not be commonly used, interactive or online marketing skills — while not quite a science — are commonly found in many organizations.

What we now need is a fourth skill. The ability to combine marketing, IT, new media, and……and what? I’m struggling to find the right word to capture the needed skill set. I’m tempted to just plug in the word “social.” But that’s too broad a term.

What firms need now are people who can combine an understanding of marketing, technology, the online channel and things like customer service and community building. I’m struggling to come up with a label because customer service and community building are separate skills in and of themselves.

The new skill boils down to knowing how to talk to people and how to get people to talk with each other.

If you think marketers have this skill today, you’re wrong. Marketers  (if they’re good) know how to craft marketing messages. That’s not a conversation.

Customer service people (if they’re good) know how to talk to people, but that doesn’t mean they’re good at building community, at marketing, or at understanding technology.

There’s a fourth skill that’s needed in firms today, and while some (if not many) firms are experimenting with — or even committing whole hog to — social media, the fact that they’re using social media doesn’t mean they have the skills internally to capitalize on the promise of social media.

What I’m hoping to do with this post is shift the discussion. Personally, I’m really tired of hearing all the preaching that firms need to adopt social media, create social CRM strategies, or whatever. I’m also seen enough links to stories that tell me that YadaYada Corporation launched a Facebook page or is on Twitter.

I want to know how firms are driving bottom line results. I want to know how they’re changing their organizational structures, position descriptions and staffing levels. I want to know how firms are creating the fourth skill.

Someone recently tweeted that he was sick and tired of the Verizon Map commercials (for the record, that someone was @matt_vance). A number of people joined and agreed.

It’s not just that the commercial is annoying — from a business perspective, it’s just plain dumb.

Here’s why: It focuses on the wrong decision criteria.

For sure, coverage area is important to cell phone users. But how many cell phone users use their phone in 99.9% (or whatever Verizon claims in its ads) of the locations within the lower 48 states? If you do, you’re probably alone.

What matters to any one customer (or prospect) is whether or not Verizon has good coverage where s/he is and plans to be.

I’m a Verizon customer, and have been for a number of years now. For the entire time that I’ve been a customer, I haven’t been able to get any cell phone reception at my house — I live in a dead zone (15 miles out of Boston, you’d think I was in the middle of nowhere).

I was at a Verizon store with my daughters recently, as one of them was upgrading her phone. As we waited for service, I noticed on the wall that Verizon sells — for about $200 or so — something they call an Extender, which would probably be perfect for someone like me who lives in a dead zone.

If my daughters hadn’t been there with me, I probably would have gotten into one of my typical “philosophical discussions” with the sales rep (the girls get really embarrassed when Dad argues about stupid things with salespeople).

This “discussion” would have gone like this: If you guys have such great coverage — as you boast in your annoying “there’s a map for that” commercials — then why in the world should I spend $200 for some device to improve the reception?

This annoying little matter aside, the reality is that having complete national coverage is meaningless to any one customer. What matters — that is, what drives the decision of carriers — is something else.  Or more specifically, other things. Not only coverage area where the customer is and will be, but things like device choice (don’t try to tell me iPhone users are ecstatic that AT&T is their providers) and service reputation.

Because it doesn’t focus on the real decision criteria (possibly because it can’t), Verizon’s ad is just plain dumb.

But not to be out done — or should I say out-dumbed — what does AT&T do?

Responds with an even dumber ad featuring Luke Wilson.

What makes AT&T’s ad even dumber?

First of all, Luke Wilson. What’s the matter? Was there no one else on the C-list of celebrities willing to do an AT&T commercial? How sad to see AT&T go from the iconic James Earl Jones to the moronic Luke Wilson.

The second thing that makes the AT&T response dumb is that… well, they responded. By responding to Verizon’s dumb ad, AT&T validated Verizon’s focus on nationwide coverage as a decision criteria.

Verizon and AT&T: Dumb and dumber.

In fairness, though, I think it’s the firms’ respective ad agencies who are to blame here. And you wonder I’m critical of ad agencies?

There are lessons that marketers in a range of industries should learn from Dumb and Dumber. You should be able to figure them out for yourself.

I’m assuming that you’re sitting inside a nice comfortable building right now.

(If you’re out by a pool, drinking a pina colada, then I have two things to say to you: 1) I hate you, and 2) Why are you reading this out by the pool?)

Are you worried that the building that you’re sitting in is going to fall down and crumble around you?

Of course not. You’re confident that there is a foundation upon which the building was built that will keep it from falling down, and that there’s an infrastructure that enables you to do things like hang pictures on the wall, or draw power from outlets in the wall.

The concept of an “infrastructure” is very common in business, especially in the world of IT. The IT department in your company understands that your firm needs an IT infrastructure — servers, routers, PCs printers, etc. — upon which applications run.

The IT department also knows — after many years of trying — that you can’t calculate an ROI on the investment in IT infrastructure. The return comes from the applications that use the infrastructure — not the infrastructure itself.

All of this is gobbledygook to marketers. While marketers might understand that there needs to be an infrastructure to support the CRM apps they use, the concept of an infrastructure to support customer relationships is a foreign concept to them.

While the world is marketing is obsessed with figuring out what to do with social media, or how to tack the label “social” onto their CRM investments, there’s something I believe that marketers are missing: Building strong customer relationships require a “infrastructure” upon which to build those relationships.

Conceptually, a customer relationship infrastructure boils down to two things: Engagement and Trust.

It’s no different  in a business context than it is in a personal context. Strong personal relationships are built when two people engage (in meaningful ways) and develop a bond of trust.

The word “meaningful” is critical in that previous sentence. You might “engage” everyday with the person behind the counter at Dunkin Donuts where you buy your coffee every morning, but there really isn’t much of a relationship there because those interactions aren’t very meaningful.

What this means, from a practical perspective, will be very troublesome for marketers.

If marketers need to build a customer relationship infrastructure, that means that they will need to make investments in things that — by definition – will not produce a return on that investment.

I think this is going to be the case with many social media investments.  The benefit (just because an investment doesn’t produce a return does not mean that it doesn’t produce benefits) of these efforts will be to engage customers and prospects more often, and in more meaningful ways, than firms have been able to do in the past.

And the result of that meaningful engagement will be higher levels of trust… which will (should?) ultimately result in stronger levels of relationship, as measured by loyalty and purchase behavior. But attributing the increase in loyalty or purchase behavior directly to the investments in social media will be a tricky proposition, since direct marketing and sales efforts will still continue to be executed.

A good example of this kind of investment in the world of banking is personal financial management (PFM). Many banks will be searching for the “ROI on PFM” this year, and many banks will be either be frustrated by what they find or will fall prey to what I like to call the “correlation delusion” (i.e., they will attribute an increase in retention among PRM users to PFM even though many other factors may have played a role).

If, instead, banks look at PFM as an engagement platform — a way to interact meaningfully (i.e, helping users make smart decisions about their financial lives, and not just pushing offers at them) — then PFM becomes a component of the customer relationship infrastructure.

This is a big change in perception for marketers. IT had to go through it. Marketing will too.

This also means that measuring engagement and trust will become important, as well. Since investments in the infrastructure won’t produce a direct return, the benefits will have to be measured in terms in improvements in engagement and trust.

And guess what? Measuring how many pages web site visitors hit, or the amount of time they spend on the site won’t cut it as a measure of engagement. Nor will the “time spend interacting with an ad”, which seems to be the advertising community’s favorite measure of engagement.

And trust measurement will need to evolve as well. You can’t simply ask “do you trust us?”

These are the things marketers should be wrestling with in 2010. Social media is a tool. It’s like a hammer. If you’re building a house, sure, you need a good hammer. But if you don’t have a good blueprint for what you’re building, the best tool in the world won’t be of that much help.

Imagine that you’re stationed on a Navy boat in the Middle East, and — God forbid — some enemy force launches a missile at your boat. What would you hope the boat’s response time to identifying the attack is? Milliseconds?

I have no idea what the actual response time is, but considering we’re talking a matter of life and death, I’m willing to bet that the Navy’s response time is pretty damn fast.

Now imagine that you work for the Navy Federal Credit Union, and somebody — not even a CU member — tweets something negative about the credit union. What should the credit union’s response time be?

Certainly not milliseconds. An hour? Before the end of that calendar day? Forty eight hours?

Remember, we’re not talking life and death here. We’re talking — at best — about reputation. And I would argue that depending on who did the tweeting, the long-term potential impact of a single negative tweet is not very great.

I raise this point because of a blog post I recently saw mentioned Navy FCU, and the blogger went on to tweet — just a few hours after putting up the post — about how NFCU hadn’t responded yet to his criticism. (P.S. I’m not sure, but I don’t think the blogger is a NFCU member).

This raises the question: What should a firm’s SMART (social media attack response time) be?

As I read blogs and tweets that exhort firms to respond “within the hour” or even immediately, I can’t help but think: LET’S PUT THIS IN PERSPECTIVE, PEOPLE.

The first two questions a firm should be asking are: 1) Who launched the attack (er, lodged the complaint or critique)? and 2) Who saw it?

Is the critic a customer of the firm? If yes, that would argue for faster than slower response. But in the example we’re discussing, the critic was someone from the credit union community. Which doesn’t warrant putting a response on the top of the stack, in my book.

The other question concerns who saw the criticism. Not to pass any judgement about the blog in question (after all, I can’t even begin to tell you how few people will see this blog post), but I think it’s very unlikely that many —  if any — NFCU members saw the blog post.

So what impact did the lack of an immediate response have on NFCU’s reputation? NONE.

In the end, NFCU did respond, not long after the blogger’s tweet, not only on the blog, but on Twitter, and directly to the people who commented on the blog. In my book — and I bet other’s — NFCU’s reputation was  enhanced, not damaged. But even then, mostly with people in the industry, not members. But I’m sure that’s still important to NFCU.

The point of all this is to emphasize one point: That “right-time” is more important than “real-time”.

Shoot a missile at me, and I better damn well respond in real-time.  Attack me on Twitter, and my response time doesn’t need to be nearly as quick. My SMART isn’t milliseconds, but — as the email channel learned — it isn’t 48-72 hours either.

Firms that launch a Twitter presence need to do some upfront thinking about what the right SMART is — it varies by the type of comment or remark,  and by who makes the comment or remark.

Over the past few years, we’ve seen a near obsession among bank (and to a lesser extent credit union) execs to borrow from the retailer playbook (i.e., Starbucks), and turn their branches into places where consumers can hang out, sit in comfy chairs, drink coffee, and get Wi-Fi access on their computers.

I’m not sure if I really need to tell you this or not, but it hasn’t worked. In trying to understand why, I figured out what’s missing: Sex.

Carl’s Jr. is set to launch a series of ads featuring Kim Kardashian, who I’m told is a rather sexy reality TV star.  Apparently the ads are somewhat on the erotic side. This isn’t the first time that Carl Jr. has used sex to sell his food. A few years ago, I remember seeing hearing about Paris Hilton slithering around in a Carl Jr.’s ad wearing very little.

According to a creative director at the ad agency that did the new spots, “guys love Kim and women really like her because she’s a real woman with curves.” Carl Jr.’s logic must be that running sexy ads will make people think one of three things:

• If I eat Carl Jr.’s food I’ll be sexy like Kim.
• If I eat Carl Jr.’s food I’ll get someone sexy like Kim.
• If I eat Carl Jr.’s food I’ll see someone sexy like Kim at the restaurant.

So, my banker friends, if you’re going to pursue this “we want a great retail-like experience at the branch”, you’re going to have start running sexy ads.

Here’s what I was thinking: How about an ad with Giselle Whats-her-last-name (Brady?) pulling a checkbook out of her push-up bra?

Oh wait, that wouldn’t work because no one has checkbooks any more.

Ok, then, how about Rikki and Vikki from A Double Shot at Love with the Ikki Twins transferring balances from their savings account to checking account on their iPhones while wearing sexy lingerie? (I had to Google “reality TV stars” to come up with this, you know).

Hold on, this isn’t going to work either. It’s women who manage the finances in the majority of the households in this country, so maybe what banks need are ads with hot studly-looking guys. But that logic is faulty, too, since the ad agency dude implied that as long as the woman used in the ad is a “real woman with curves” that that would appeal to women as well as to men.

I guess I should leave the creative part to the “experts” in the advertising business. Clearly, they know what they’re doing here. But what I do know is that it’s time banks made banking sexy.

The end of the year is when the pundits make their predictions for the upcoming year. I’m terrible at making predictions, so I’m going to stick with prescription, instead. Here are three things marketers need to learn to do (better) in 2010:

1. Learn how to have a conversation. The popularity of social media has helped to highlight one of marketing’s big shortcomings: Marketing doesn’t know how to have a conversation with a customer. News of the latest deals or new branch/store openings aren’t part of the “conversations” I typically have, are they part of yours? Reality is that marketing doesn’t really know how to conversation with customers and prospects, because they’ve never done it before. For 2010, I’m hoping marketing will learn how to have a conversation instead of just talking about how important conversations are.

2. Learn how to sense and respond. Listening platforms have evolved, but marketers still lack a broader capability in which those tools are used: The ability to sense where a customer or prospect is in the customer lifecycle, and how to respond with the most appropriate offer, message, or guidance. Simply recognizing that the most appropriate response to a customer/prospect isn’t an offer would be a major step for many firms. Marketing has focused on “inbound marketing” over the past few years, but so much of that focus has simply been linking outbound marketing efforts to inbound contacts. A good step, but not enough. [Update: Here's an example of what I'm talking about]

3. Learn how to become a magnet. Deliver magazine recently published a list of  marketing trends for 2010, two of which were targeting and prospecting. These marketing tactics are basically about finding needles in haystacks. They characterize the old world of marketing: Go out and find people who might become customers, hit them upside the head with the “right message at the right time” and drag them back to your cave and sell them more stuff. A few months ago I was having coffee with one of the top innovators in banking — William Azaroff —  talking about marketing stuff, and we agreed that marketing’s goal should be to become a magnet. Rather than spending its time hunting to find people who might want to become customers, marketing should help make the firm a magnet that draws people in. I’m not saying that marketers should stop targeting and prospecting — I’m saying that there’s something else it needs to do.

I imagine that there will be marketers who will read this, scoff, and think “marketing needs to grow the business and improve the return on its marketing dollars.” Sorry for the sports analogy, but that’s like the head coach of a sports team saying “we need to win more games.” That’s not what they need to “do” — that’s the desired outcome.

It’s not sexy, but marketing needs to start thinking (and doing) more about its competencies, capabilities, and processes. Those that do will be rewarded with a higher marketing ROI. (I hope).

Many of you have probably experienced this: You’ve been asked to speak at a conference. About 12 weeks before the conference date, the conference organizer sends you a Powerpoint template for you to use.

There are three things wrong with this:

1. It’s too soon. I have a better chance of sleeping with Tiger Woods than I do of having my presentation for the conference ready at that point. Even 12 days before the conference is a stretch for me. But hey, that’s my problem, not the conference organizers. And in the scheme of things, this problem isn’t nearly as bad as the next two.

2. The templates are butt-ugly. No offense (who am I fooling, of course I’m offending someone), but these templates are usually atrocious examples of poor design. The one I received the other day had two huge blue boxes — one at the top of the page, one at the bottom — and a space in the middle for the page header and text. Right, the header was below the blue box at the top. The bottom blue box had the logo and conference name in large font, of course. And I’m supposed to cram my content in the white space in the middle. This was one of the better designed templates I’ve received.

3. Templates are counterproductive. It’s a shame that conference organizers don’t understand this: Clinging to some fantasy of “conference branding” detracts from the attendee experience. Most Powerpoint presentations are poorly designed as it is.  A conference -branded template doesn’t help the situation. The purpose of each slide in a deck is very simple (to describe, not to execute): To communicate an idea. Any extraneous text or graphics on a slide detracts from that goal.

What do conference organizers think? That attendees don’t know what conference they’re attending, and have to be reminded by each of the 600 slides that they’ll be subjected to looking at?

I, for one, will continue to ignore conference organizers’ requests to use their templates. I’m this close to telling them to take their templates and….