Marketing Tea Party

Did I mention that my summer job in 1979 was pumping gas in a gas station? It was a stroke of luck to have that job. That was the summer of gas shortages.

By working in a gas station, I: 1) Never had to worry about waiting in line or having gas in the tank for either of my parents’ cars, and 2) Got more “bribes” from folks who wanted to leave their car with me to fill up, or to exceed the limits on sales that were set (what kind of bribes? use your imagination).

It’s nearly impossible for today’s 19 year olds to get this kind of summer job, because there are so few gas stations that employ anybody to do this kind of work (unless you live in New Jersey or Oregon). Nope, these days, the majority of gas stations are self-serve. The days of the guys with the white jumpsuits at Hess stations are long gone.

Ever wonder why there are so few full-serve gas stations? I’ll tell you why.

The gas companies did market research. Consumers overwhelmingly said that they’d prefer to get out of their cars, even if it was freezing or raining, get their hands dirty by opening their gas caps, and then fumble around with this gas hose thing that they had never touched or used before.

It was market research that led to the adoption and proliferation of self-serve gas stations.

And if you believe that, you need to have your head examined.

In reality, gas companies came to a not-so-startling realization: With the increase in oil prices that was happening in the late 70s/early 80s, they couldn’t continue to profitably run gas stations with the then-current business model. They did the only thing they could do: They fired the attendants, and forced consumers to pump their own gas.

Oh sure, there was some bitching and moaning, but over time, technology developments like pay-at-the-pump made the experience even faster, and today we pretty much accept the fact that most gas stations are self-service.

Why tell you this? Because 2010 is to banks what 1980 was to gas companies. The point at which some difficult business model decisions must be made.

With the current regulatory environment — specifically the  overdraft regulations — banks are facing a profitability crisis.

One of my colleagues recently completed a study in which he found that, on average, banks expect a 26% drop in overdraft fee income. Meanwhile, only 21% believe that they have an overdraft strategy that will largely compensate for the income shortfall, and just 32% think that their overdraft strategy will even partially compensate for the shortfall.

How are banks going to maintain any semblance of profitability in this environment? The answer is simple, but painful.

With a nod to the greatest president we’ve had in the past 50 years (and at the rate we’re going, for the next 50 as well):

“Mr. Bank President, tear down those branches!”*

The so-called research that shows that branch location is such an important part of a consumer’s choice of banks is more the result of the survey construct than it is a reflection of the underlying preferences and needs of consumers.

There are plenty of industries and companies where we, as consumers, have no face to face interaction with the firm, and are quite satisfied, and even loyal. Hell, USAA is one of the most successful firms in the financial services industry, and it doesn’t have any branches.

Bankers love to say “We’ll do business in the channels our customers want to do business in.”

Here’s the lesson learned from the gas companies: Customers will do business in the channels you tell them to do business in, let them do business in, and incent them to do business in.

It’s time for consumers to pump their own bank.

p.s.: I often start writing a blog post and let it sit unfinished for a while. I had started this one a while back, and when I saw Brett King’s post Branch Networks: Where Do We Go From Here?, I decided it was time to finish this. Check out Brett’s post. It’s excellent.

*Yes, I know that there are plenty of female bank presidents. But to maintain consistency with the original statement, I used the “Mr.” form. Don’t get on my case.

Technorati Tags: Banking

Market research firm Yoosless Phuqing Research released the results of a study today, in which it found that nearly 95% of companies in the US use pens and pencils, but have no centralized writing utensil strategy. According to the firm’s founder and CEO, Aimso Yoosless:

“Most firms are using pencils and pens interchangeably without any strategy for guiding employees on which writing utensil to use for different types of documents or messages. More disturbingly, in 23% of companies, employees are using Sharpies to compose documents and messages. In 12% of the firms surveyed, employees use pens, pencils, Sharpies, and crayons, yet have no strategy dictating when to use each instrument.”

The study claims that the impact of not having a writing utensil strategy could cost firms millions of dollars in brand equity. According to the study, “Today’s savvy consumers don’t want to see stuff written in pencil, when they should have been written with pen, or even crayon. One misuse of a pencil could cost you a customer.”

Many survey respondents commented that developing a writing utensil strategy is hard, and that they didn’t know where to begin. As one executive put it, “Our customers’ preferences vary greatly. Not only do some prefer pen-written material to pencil-written material, but some like blue ink, some like black, while even others prefer red or green. Personalizing our writing utensil usage to their needs is beyond our technological capabilities.”

Yoosless Phuqing did identify a minority of firms that have a Writing Utensil Strategic Strategy. These firms, which the research house refers to as WUSSies, demonstrated a number of best practices. Wussies:

1) Developed writing utensil guidelines. These policy statements instruct employees on which writing utensil to use when.

2) Appointed a Chief Writing Utensil Officer. Wussies recognize that someone in the firm has to have the authority to enforce the guidelines, and appoint a senior executive to direct the efforts.

3) Established writing utensil metrics. As one Wussie put it, “if you can’t measure it, you can’t manage it.”

Brandweek reported on a study done by Zogby Interactive about the trust consumers have in a number of brands, and the article made a big deal about how non-social media brands had higher “trust” levels than social media brands:

“49% of respondents said they trust Apple “completely” or “a lot,” matching the number who said the same about Microsoft and Google. Apple’s “trust a little” or “not at all” total (36%) was lower than that of Microsoft and Google (both 46%), with a higher “not sure” tally for Apple making up the difference.

13% of respondents said they trust Facebook completely or a lot, vs. 75% trusting it a little or not at all. The numbers were similarly negative for Twitter (8% completely/a lot vs. 64% a little/not at all, with another 28% not sure).”

On the face of it, these numbers surprised me. Probably because I spend too much time on Twitter (AKA AppleFanBoyVille), I never would have guessed Microsoft’s trust number would be as high as Apple’s.

But in evaluating these results, we can’t stop at “the face of it.” At the core of this (get it?) is a more important issue: What the hell does the researcher mean when it asks “how much do you trust” this or that brand? How much do we trust those brands to do what? To protect our data? To deliver good products? To do the right thing by its customers?

The other thing that is potentially troubling about the research is the methodology. Best as I can tell from Zogby’s press release, respondents were not asked if they do business with those brands before being asked to rate how much they trust them.

If I were designing the survey, not only would I have asked that, but I would have inquired to what extent the respondent sees him/herself as a loyal customer to the brand. Because I’d want to know if customers of the brand have a higher trust perception than non-customers, and if “loyal” customers have a higher trust perception than less loyal customers.

Bottom line: With all due apologies to Zogby, this research is pretty useless. It says nothing about the levels of trust consumers truly have with these brands — that is, what they actually trust or distrust — and does more to get Zogby’s name in the press than it does anything else.

Technorati Tags: Trust, Social Media

I had a chance to hear Shari Storm speak today about what Verity Credit Union is doing with social media, and in particular, the Verity Mom initiative. It’s a great presentation, and I wanted to share what I took away from it.

But before I do, I have to say that, on a personal note, it was great to see Shari face-to-face. Although she and I have tweeted with each other (both publicly and privately) and exchanged emails many times over the past three years, before today I had only met Shari in person once — for about seven seconds. We introduced ourselves to each other at the 2007 Forum Symposium, and that was literally the extent of our f2f contact.

I’m not going to go into any detail about the Verity Mom initiative. You can visit the site and see what it’s all about for yourself, although I bet if you’re reading this, you already know about it.

After hearing Shari present, there were three things I took away that I think differentiate the initiative from a lot of other social media/WOM efforts:

1) It’s grounded in strategy. It’s no big secret that women manage the finances in a majority of households in the US. Yet, how many financial institutions have really overhauled their efforts to not just market to women, but design products and customer-facing processes to appeal to women?

Who are moms these days? Most likely they’re in the their late 20s (at the youngest end) to the early 40s (at the upper end). In other words, mostly Gen Xers. Not Gen Yers. Gen Xers who are hitting the prime of their earning years, and the prime of their financial needs. While the rest of the financial world drools over 25 year-olds who don’t have two nickels to rub together, Verity Mom is part of a strategy to attract a segment of customers who represent a good chunk of the demand for financial products.

2) It’s integrated into the core of the business. So many social media efforts that I hear about appear to be one-off experiments that are designed to “test the waters of social media” or let the firm check off the “we’re attempting to innovate” box.

Not at Verity. The Verity Mom initiative has led to the renaming of the CU’s checking account and the redesign of its branches. In addition, Verity Mom blog posts end up on the CU’s home page, not buried somewhere deep in the site, as it often is at other FIs.

3) It oozes with authenticity. Plenty of financial institutions have run ad campaigns over the years that purport to show “real people” who share their “stories” about the bank or CU and how great it is. In the end, I guess we could argue whether or not these attempts are successful at influencing perception, but I’ll tell you right now I’ll be arguing that they don’t. Authenticity is something that takes time to achieve. You can’t do it in a single shot, with a single ad campaign.

Over time, through consistent and persistent blogging and messaging, Verity demonstrates that it’s authentically concerned with meeting the financial needs of moms.

I’ve said this before, I’ll say it over and over: You cannot advertise your way to trust. It has to be experienced. Verity Mom gives moms the opportunity to experience Verity, and that builds trust and authenticity.

Technorati Tags: Verity Mom, Social Media

A few days ago, as I was approaching the time for my scheduled mid-year performance review, I joked on Twitter that it’s a shame that my boss has to repeat himself every time we do a performance review.

I was only half-joking. Because it’s true. He does repeat himself. Every boss I’ve had has had to repeat him or herself. In an attempt to improve my “performance”, they’re always trying to get me to do something I either don’t do today, or don’t do very well.

It’s not that I can’t learn to do those things better. I don’t want to.

There are three levers a boss can pull to get me to change:

1) Plead with me. This generally doesn’t work, although I must admit I sometimes do what he asks me to for his sake, not for mine. I feel bad that I make him repeat himself, so I throw him a bone, and do something he asks.

2) Reward me. Believe it or not, this doesn’t work very well. What am I really going to see monetarily for changing my behavior? Two or three thousand dollars more a year? Not only is that not enough to motivate me to do things I don’t want to do, it misses an important point: Money simply isn’t my main motivator. (Apologies to my wife and kids).

3) Fire me. Go ahead. I’m actually delusional enough to believe that I’ll find another job in a reasonable amount of time.

In becoming a better manager, you’ve got to mentally calculate two scores regarding your subordinates: 1) their LAP score, and 2) their Freedom score.

LAP is an acronym for Look, Act, Perform. Like it or not, every boss has a mental picture of how s/he wants any particular subordinate to look, act, and perform. Sometimes these expectations are encoded in one’s performance metrics, but, in my experience, all of the mental expectations around LAP are never fully elaborated.  (There is the possibility that the boss’ LAP expectations are wrong or unrealistic, but we can’t deal with that problem here).

Now I hate to burst your coddled little bubbles, but there are precious few people (more specifically, knowledge worker types) — maybe 10% — that score really highly on the LAP dimension. Most of us are simply above average (that was a joke — if you don’t get it, look up Lake Woebegon). Seriously, though, we all tend to score higher on the formal assessments we have to go through — but many of these reviews simply don’t capture all of the boss’ expectations.

The other score to take into account is the Freedom score. This score is based on the extent to which an individual truly has and needs freedom to do what he or she wants to do, likes what s/he is doing, and is good at it. Maybe one in five of us score very highly on this. Our freedom to do exactly — and only — what we want is continually being challenged by bosses, clients, etc.

And we all have varying levels of acceptance with varying levels of freedom. I don’t think most of my bosses have really understood this: I do what I do because I need a very high level of freedom. I understand the tradeoff. I could never be one of those guys on Wall Street sitting in front of a trading screen all day — even if I could make a million dollars a year doing so.

Putting the two dimensions together yields the matrix below, with my (non-scientific) estimate of how many people fall into each box. The reality is that most of us are in the middle — decent performers with a decent level of freedom.

Show me somebody who scores really high on both dimensions, and I’ll show you a candidate to be CEO of your firm. Show me somebody who scores highly on LAP but low on Freedom, and I’ll show you someone about to find a job with another company. Show me somebody who scores really low on both dimensions and I’ll show you someone about to be shown the door at their company.

Here’s what makes managing so hard: In an attempt to raise someone’s performance (i.e., LAP score), managers are often inclined to take actions that reduce the subordinate’s Freedom score. This is where the Law of Unintended Consequence kicks in. With someone like me, reducing my Freedom score is likely to reduce my LAP score.

The hard part of managing is that managers have to figure out when to adjust their expectations, and when to reduce freedom.

An interesting thing happened in this most recent review session: My boss realized that he likes to do some of the things I really hate doing, and he suggested that if he do those things, he could then turn them over to me to see it through to completion — which I’d be more than happy to do.

I may be able to improve my LAP score, after all.

The Financial Brand’s recent article on TD Bank’s new mascot raised two questions in my mind:

1. What the hell were they thinking?
2. What the hell did they pay somebody to come up with that?

I hope they didn’t pay a lot, because I’m happy to give that kind of advice away for free. So I’ve picked four lucky banks for whom I will make mascot recommendations:

PNC: PiNCh the Lobster

Bank of New York: Boney the Skeleton

Flushing Savings Bank: Tommy the Toilet

Bank of Kremlin Okla.: Nikita the Dictator

Just saved some banks a ton of dough, didn’t I?

After reading the CU Warrior’s blog post on Digging the Diggers, I thought: Great stuff, but how and why are credit unions in this situation to begin with?

My answer: They ain’t got no swagger.

Thesaurus.com defines the verb form of swagger as “walk pompously.” Noun form synonyms include audacity, bluster, and hubris.

I realize that those words might not have a positive connotation to you. But when you see some hip-hop rap star walking around with a ton of bling, and six women clinging to him, you think “that guy’s swagger just reeks success.”

It’s about the image portrayed. When I tell people how many people work at my company, I often hear “wow, I thought you guys were bigger.” Right. Because we “play bigger” than we are. Doesn’t mean we’re arrogant or anything. It’s about an image we’re trying (I think) to project and reinforce.

After reading Matt’s blog post, I thought about the image that I perceive the credit union industry (as a whole) to be projecting: Insecurity. “Oooh, we’re the little guy getting taken advantage of by the big bad banks, which is so wrong, because we’re so much better, but nobody knows it.” Oh, boo hoo.

There’s a ton of YouTube videos I could point to that all focus on “spanking the banks”, or making fun of bankers, or feeding the “little guy” image.

And let me concede that that image may very appeal to a certain segment of the market. As Matt alludes to, though, maybe that segment is just the 6% he says CUs are fighting over. Personally, I think the segment is a lot higher, but even if it’s three times greater, that still leaves more than eight in 10 consumers who aren’t going to be attracted by the “insecure little guy” image.

What do the 80% want? I don’t know. I only know what I want: To associate with winners. To do business with the best firm in the pack, not the one I feel sorry for because they’re so needy. The one with the swagger, the bling, and the beautiful women clinging on to them.

The Warrior says “We price products like we’re banks. We’re not banks.” Pretty bold. What would a CU with swagger do?  Charge for PFM access, and give away the checking account.  Require members to open a minimum number of accounts in order to maintain their status as a member. Tell members “if you want to benefit from the superior service and products we offer, then you’re going to have to earn it, beyotch.”

Of course, if you’re going to have a swagger, and project an image that you’re the best, then you better be good. With the insecurity that I perceive, I can’t help but wonder if CUs really believe their own claims about superior service.

CUs need to start “playing bigger.” Too many misinterpret this “small firm” thing. People don’t want to do business with a small business simply because it’s small, they want to do business with a smaller firm because they believe that there will be benefits — like better service, more flexible pricing, better ease of doing business, etc. — to doing business with it.

I’ve said it before, going to say it again: It’s time to move past the “big bank mistrust” thing. That’s old news, thanks to BP. Time for CUs to get aggressive and assertive about marketing. Time for CUs to get their swagger on.

Technorati Tags:  Credit Unions

I shouldn’t have to write this post. But apparently, I do.

Recently, I logged into a webcast titled Retail Banking: Customer Engagement in the Digital Age. According to an Adobe blog post about the webcast:

The discussion ranged across many topics related to customer engagement including the importance of the customer experience; establishing a point of differentiation in banking; service delivery in banking compared to other sectors; and whether innovation really exists in financial services today.”

Interestingly, if I hadn’t asked  ”What is engagement? How do you define it?” those questions might have never been addressed. And honestly, no offense to the panelists, but I don’t don’t think they offered adequate answers to these questions (@aden_76 and @lizzieboo77 can either support or refute me here).

So, for me, the rest of the conversation about customer experience, consumer empowerment, transparency was nice….but had no connection to engagement.

And it supported my suspicion that the term “customer engagement” has become some empty buzzword used to lure people to log in to webcasts.

That’s too bad, because customer engagement — at least how I define it — is really important, and understanding the reason why doesn’t require a PhD in rocket science, yet many marketers (especially advertising people) still don’t seem to grasp this: Without engagement, there is no relationship.

This  is true whether we’re talking about a business to consumer relationship, or a relationship between two people.

There are two aspects to engagement: Quantity and quality. How often you engage, and how meaningful those engagements are. Duration of contact, however, means nothing.

Ever notice how people who serve in the military — in battle — develop close relationships in a short period of time, and how those relationships often persist after their tour of duty is over? That’s because, even though the duration of their engagement is short, the quality of the engagement — the highly emotional situations they’re involved in — is high.

Conversely, imagine that every morning before you go to work, you stop off at a coffee shop to get a cup of coffee. Over time, the folks at the coffee shop begin to know who you are, and as soon as they see you getting out of your car, they’ve already started to make your favorite latte, and it’s ready and waiting as soon as you get in. Just how you like it. Short duration, not a particularly high emotional content, but repeated, satisfying interactions help to build engagement.

From what I can tell reading the advertising/branding/marketing press, marketers are by and large completely clueless to this. Instead, they obsess over how long people spend looking at their ad, or how long they spend on a site.

There’s a quote I like to use in presentations to help illustrate why quality of engagement is more important than duration, and even quantity. In comes from a guy named John Gottman, and he’s the Executive Director of the Relationship Institute. John said:

“Good relationships aren’t about clear communication — they’re about small moments of attachment and intimacy.”

Again, this is true whether we’re talking about personal relationships or business to customer relationships. And again, many marketers are completely clueless to this, worrying more about what their “story” is, and getting their “story” across to customers and prospects.

This is too bad, because a marketer’s story isn’t worth diddly squat. The only “story” that matters is the customer’s story, and that story doesn’t come from advertising, it comes from being engaged with a firm, brand, or product.

Trying to impose or enforce definitions of commonly used buzzwords is a tricky sport, and I’m loathe to do it, but here it is. Engagement isn’t how long someone spends on your site, or looking at your ad, and it isn’t channel specific, and it can’t be boiled down to a single, behavioral measure (although I’d argue that you can develop a composite metric based on a variety of behaviors and attitudes). Engagement is:

“A series of interactions that strengthen a customer’s emotional connection to the product or firm.”

I really hate being repetitive and redundant, but I’m going to keep pushing this until the ad folks get their heads on straight.

Did you see that the New York Times has banned the use of the term “tweet”? Apparently, the standards editor at the paper asked writers to “abstain from the invented past-tense and other weird iterations of the magical noun-verb ‘Twitter’.”

So what should the New York Times call it? Here’s one suggestion to the Times:

Multi-Originated Real-time Outbound Notes.