Change your Mindset Idea #1: There is no Magic Bullet! - Today's Issues are Complex and Can Have Complex Solutions

It is human nature to take the path of least resistance and look for the easiest solution. Staples, the national office products retail chain, in its recent national advertising and branding campaign emphasizing the Easy Button, emphasizes this point. Making customers think it is really that easy is an excellent way to manage the mindsets of current and potential customers, however, it can be a recipe for “do nothing” to a management team with an outdated mindset.

Having worked with hundreds of financial services professionals over the past 15+ years, I am convinced that there is a severe case of “Magicbulletitis”. I use this term to define the tendency to look for one quick easy solution, which may not always exist. Folks – there is usually no one thing you can do, no one item on a "to do" list that will magically transform your business. But, Change your Mindset is a great place to start. Therefore, our final Change your Mindset blog post for June will address this topic.

Instead of thinking quick and easy, Think Long Term

Pick one or two strategic issues which you would prefer to solve quickly and easily. This could be something like being viewed as relevant in the eyes of a 25 year old and actually having them want to bank with you. A blog post is a great start, but it is not the magic bullet to instantly make you appear hip and cool with an audience you have all but ignored their entire lives. However, I suggest you draw up a plan in which you would have a set of initiatives over the next 36 months to engage with this segment and address all of the ways they will interact with you. Blog posts, an ever improving web presence, text messaging, putting a 3 person committee of employees at the bank who are under age 30 in charge of these initiatives is a great start. My main point here is for you to make a long term commitment to any group you choose to target.

There is a reason why retailers such as Starbucks, Whole Foods and Trader Joes are so successful. Yes, their “products” tend to be a bit more expensive than other providers in some cases, but they are not simply targeting a higher income customer. They are targeting the way people think: about the food they eat, about how they feel about their experience when they buy a cup of coffee, etc. Certainly demographics are involved, but the key driver to success with these retailers is that they know their customers intimately. These businesses have taken the time to understand their customers, they have continually modified and adjusted everything they do to create a unique customer experience and they made a long term commitment to getting it right.

In conclusion, I invite you to eliminate that tendency to look for the one and only thing you must do to change the situation you are in. I also invite you to read through all of the blog posts we have shared with you during the month of June. Our purpose in doing this during June was to give you suggestions and insights relative to how to shift your mindset. We hope it has indeed allowed you to see things differently.

Again, we are not suggesting that these daily blog posts are your magic bullets, but they are ideas we hope you will incorporate into your overall strategy for growth.

Thank you for your willingness to change your mindset!

Change Your Mindset #2: Stop Trying to Be All Things to All People

If I were to ask you “What is the one thing that your institution does better than anyone else?” – What would you say?

It’s been our experience that when asked this question, many financial services marketers and executives will answer in one of the following ways:

1. We provide excellent customer service.
2. Our people care.
3. We do a good job doing at everything.

While each of these answers may hold some truth, in most cases these are just unsupported claims. Perhaps more importantly, these are the same safe and boring claims made by your peers and many others throughout the industry.

We are all aware of commoditization in financial services, yet, so many marketers and executives either fail to realize the importance of differentiation, or are too set in a traditional mindset to make any meaningful changes. As a result, while most financial institutions continue to look more and more alike - it’s those institutions that go against the grain, those that truly stand for something that are able to stand out from the competition.

This gets back to a previous post: Love, Hate and Indifference where we discussed the importance of clearly communicating the characteristics of your institution that make it different from the competition. The goal of this exercise is to make your institution the most appealing choice for your target market. Because of this, it’s important to understand that this will also allow some prospective customers to more easily decide that your institution is not the best choice for them. And, over the long term, it’s better for your institution’s customers to be enthusiasts, as in many cases, this group can also be the most profitable.

We realize that this challenge can be a daunting one, but don’t be discouraged. Today’s financial institutions must be as dynamic as the marketplace, and as a result need to address change to remain relevant. Here are a few points to keep in mind when taking your institution in a more focused direction:

• Identify your strengths. While offering a diverse selection of financial services can add value for your customers, striving to be a “one stop shop” also has some drawbacks. Rather than touting the extensiveness of your product offerings, emphasize your area of expertise in your communications. For example, an institution specializing in mortgages should clearly communicate their expertise in this area; this can work to attract a specific target market (those looking to buy homes), which ultimately allows the institution to leverage its strengths.

• Define your target market. Rather than trying to serve anyone within a certain distance from your branch location, narrow your target focus. This may mean identifying your most profitable customers and pursuing those that have similar characteristics; it may be targeting those people that are likely to benefit from your strengths; or it could be targeting an underserved segment in your market. Whatever the case, more focused efforts allow you to communicate more directly to your target.

• Make it easy for people to decide that your institution is right/wrong for them. Don’t worry about attracting everyone; let those that aren’t a good fit with your institution make a different choice – in the long run, you want to attract customers that are receptive to what you have to offer.
  
  
  
  

Change Your Mindset #3 - Focus on creating a customer experience rather than on customer service

Think of any visit you have made in the last year to any store (retail or otherwise) that stands out specifically in your mind. What did the establishment do to make this visit stand out to you? Chances are the visit stood out because it was more of an overall “experience” than merely a visit. And, the chances are that the visit stood out only because it was an experience. On the flip side of this question, think of how many visits you’ve made to establishments that you would just as soon forget, or have forgotten altogether.

Creating a customer experience does n0t mean just creating a beautiful branch facility that has a fluid floor plan, is very modern, and has plasma television screens. On the contrary a customer experience is none of those things. Creating a great customer experience is about all of the seemingly insignificant things that you do to connect with the customer from the moment they walk in the door.

An example of this would be having your concierge stand up, shake the customer's hand, ask them how their day is going, ask them what they need assistance with, and then walk them to the department where they need to be; instead of sitting behind a desk, saying hello, and pointing them in the direction of one of the departments.

Umpqua Bank is one of the most successful banks (large or small) in creating customer experience. Umpqua is currently running a program called LocalSpace that allows customers to use a networking service through Umpqua’s website to find local vendors and merchants for any variety of needs. This creates a feel of commitment to the local community with which customers can connect and creates an “experience” that is very specific to the local community on a branch by branch basis.

Another program that Umpqua has initiated is the Discover Local Music Project. Umpqua spotlights local bands and music in their markets, and allows the customer to sample the songs and even create a CD of their favorites. All of this is directed towards connecting with the customers and creating an experience at the branch that is memorable and stands out from the mundane daily task of visiting a bank branch.

Customer service is a standard and is expected. Very rarely will a customer recall that they had “good” customer service for any reason, but they will definitely remember if the did not receive good customer service. Therefore, quality service is the standard at which everyone must operate. In order to truly stand out you must create the “experience” that will connect with your customers, get them talking about your bank, and keep them coming back.

Change Your Mindset #4 - Branching is not always the most viable way to grow - Consider organic growth

According to a study released by BAI last November, the average community bank only considers about 24% of its customers “loyal.” For the average credit union that number gets a slight bump to 26%. Loosely interpreted, that means that by its own admission, the average small financial institution acknowledges that, at any moment, upwards of 70% of customers/members might walk out the door.

If we take a little more realistic approach, what that means is that financial institutions are doubtful that all of the time, effort and money that they’ve spent on recruiting new accounts will translate into sustainable, long term growth. This is a challenge to be addressed sooner rather than later.

But how?

In order to maximize the potential in a branch, an institution’s overall strategy must include elements targeted at organic growth. And, rather than an afterthought, those elements should be the primary focus of the strategy. For most institutions, this will be a major shift in mindset. Isn’t that a good thing, though? It seems hard to believe that the best customer loyalty rate this industry can achieve is an average of 26%. If we want different results in any walk of life, we need to change our approach, and the first step in doing so is changing our mindsets.

Consider this:

On average, 29 cents of every dollar is held in financial institutions. The other 71% is out there for the taking, if and only if, you can give consumers a worthwhile reason to move it to your institution.

Let’s assume that we have a financial institution with a few well executed branches. Let’s say that we’ve researched our existing markets, and discovered that the bulk of that extra 71 cents per dollar is investment money of some sort, be it stocks, IRAs, or 401K accounts. Convenience is a major player for high transaction volume accounts (i.e. retail banking). It does not seem to matter much when it comes to investments. Investments represent people’s future and livelihood in retirement, so driving a little further doesn’t seem to be quite as big of a hassle on the investment side. More branches simply aren’t going to get it done in this case.

An institution with a mind for organic growth would look at the marketplace and determine just exactly how high the demand for investments was. It would determine how many people and how many dollars that demand encompassed. It would then explore ways to meet the needs of the marketplace. It would make sure that the solutions added value from the customers’ perspective. And finally it would use this new focus to differentiate from the competition, and it would make sure that its key messages communicated what that difference means to the customer.


Unfortunately, organic growth seems to be lost in the seductive world of branching and quick returns. According to the American Bankers Association, over 75% of managers see branching as their number one avenue for growth this year. Branch network expansion is one piece of a strategy that can result in growth for a financial institution. There’s no denying the returns that can accompany a well-executed branch, but sometimes there are more profitable ways to grow. Where institutions run into trouble is when branching becomes the option, rather than one option.

We know that on average, each new account recruited costs an institution roughly $1,500. Frederick Reichheld, the author of “The Loyalty Effect” and “Loyalty Rules,” claims that the cost of acquiring a new customer can be 6-7 times as much as retaining a current one. Even at half of Reichheld’s claim - or a 3:1 new customer to existing customer expense ratio, it appears to be a sound strategy to concentrate the bulk of the effort on existing customers rather than on new customer acquisition. There are some obvious assumptions involved, but now we’re talking about a cost of $500 per customer (or less) as opposed to $1,500 per customer. What could you do with an extra $1,000 per customer?

Change Your Mindset #5: Who's Teaching Whom?

We all know the exercise. For some, we first saw it when it came time to program the VCR (remember them?) For others, it was using the cell phone. And for still others, it was loading and using the iPod they got for their birthday. To whom did we turn to help us (or better yet, do it for us?)

The younger generations have long been helping and teaching their elders when it comes to using the latest electronic and technological devices. And that practice continues to this day in very basic ways. For example, few days go by when I don’t ask my Gen X and Y colleagues about how to use some program or network we use in our daily business life. And I am sure I am not alone. So learning from our younger colleagues is hardly a new or novel phenomenon.

However, I am convinced those of us further along the demographic curve can do much, much more when it comes to hiring and developing new employees. Of course we should continue to incorporate the usual cultural assimilation activities and provide the necessary industry and product information to newly hired employees. But we should also make a concerted, formalized effort to learn as much as we can from them.

The obvious input they can have regards technology. Specifically, learn how responsive your web site is to their needs. What are their opinions for improvements? But that is not all. If you are not taking advantage of and using social networking media and/or other newer outlets to talk about your institution you are missing opportunities. Tapping your younger employees for information can support your institution in staying relevant to today’s younger market segments.

Your younger employees can be valuable resources to help you reach out and attract their peers. These are tomorrow’s customers. Find out what their outside/community interests are and how your institution can participate and align with these organizations/causes. Put them in positions of visibility where their peers may be able to relate to them. Most of all, listen to them. You’ll be surprised what you will learn.

Change Your Mindset #6: Hold Everyone Accountable

We all know that business as usual is often the path of least resistance, as it allows for routines to be developed and for employees to become comfortable. And when business as usual is accepted as the norm, managing any kind of change – especially organizational and/or cultural change can prove to be difficult.

This post is our response to our discussions with management teams that realize the importance of change within their institutions, but fall short during the implementation of such change because they fail to hold their entire team accountable. Think of it as a group of people that, instead of acting like a team, share different goals, have different agendas and ultimately act as barriers to the organization realizing the goals and/or vision outlined by the CEO and/or management.

As I mentioned above, this situation is especially prevalent when change impacts the entire organization or the culture. And, in the financial services industry, these kinds of changes are widespread due in large part to the commoditization of the industry and pressures to differentiate.

While concepts like differentiating from the competition, communicating a clear message and becoming a more brand-driven organization are new to many financial institutions, they are gaining traction; and they are exactly the kinds of initiatives that require involvement from everyone in an institution – not just the management team. Regardless of the initiative, in order to stay competitive and to grow in today’s marketplace, financial institutions must be dynamic; and in many cases this means embracing and encouraging changes rather than resisting change in favor of the status quo.

Think about this topic relative to your institution, and your institution’s vision. Is everyone working together as a cohesive team with the same goals in mind? In many cases, developing a clear vision is the first step – and communicating the vision and expectations of each employee should follow. When expectations are defined, everyone can be held accountable. And when everyone is working in the same direction, changes within your institution can be more easily managed – and goals more easily obtained.

Change your Mindset Idea #7: Take Action - not all decisions should take weeks

Then length of time it takes for many decisions to be made within the financial services industry concerns me. In a time in history where speed, responsiveness and being nimble is critical, the slow pace of decisions in this industry is nearly equal to doing nothing at all.

I postulate that fear is what keeps people from making decisions, fear of making the wrong one, fear of being judged, or fear of taking a stand on an issue. These are normal human challenges, all of which can be overcome. Here are two things you can do to help break the bottleneck of slow decision making at your institution and help propel the culture within your organization:

Push decision making authority down the chain of command: Empower some of your colleagues who may or may not be direct reports to make some of the decisions. Not only would this boost their motivation, but it would be your chance for a vote of confidence in their abilities.

Create a Culture of Asking for Forgiveness not Permission! The most successful companies not only empower their employees to make decisions, but to learn from their mistakes, not try to prevent them from making them in the first place. When an employee knows that he or she is supported and that the team “has his/her back”, they will do what is necessary to get the job done.

Take up these two ideas at your next management meeting and watch for the reaction of your younger colleagues. It is a sure way to help build buy in among this group.

Change Your Mindset #8: Staying Relevant Requires Constant Attention

Change is constant; change is fast; and as a result, staying relevant in today’s marketplace can be more difficult than ever. And whether it is demographic shifts, technological advances or changes in customer preferences, financial institutions must constantly and carefully address these changes in order to stay relevant to their target audiences.

Think about today’s most successful companies; many of these companies do more than simply address change, they embrace it. In fact, many of these companies have gone as far as to create the change. Think of how Apple revolutionized the way we listen to music with the iPod, or how easy it is for us to rent movies from Netflix. Perhaps more importantly, think of companies that have been forced to rethink their businesses as means to stay relevant. Kodak comes to mind, as it has had to shift from its focus on film to include new digital photo technologies and products in response to customer preferences.

While the pressures to stay relevant are evident in many industries, there seems to be a lack of urgency and importance placed on staying relevant in financial services. Think about the last time you made significant changes to your website; or think about your ATM displays and features compared to the machines used by institutions like Chase and Bank of America. Sure, technology is expensive. However, customer expectations are rapidly changing, and it’s critical that you understand and manage your audience’s needs, preferences and expectations.

No longer is simply having a website good enough; it’s expected that your institution have a good (translation: sophisticated) website. It’s become an expectation that customers can easily and quickly log-in to view and manage their accounts on your website; that information is easily assessable and up to date (everyday); and that nearly all (if not all) applications, transactions and inquiries can be handled with through your website.

The first step in staying relevant in today’s market is identifying and fully understanding your target audience. While you may have a solid understanding of what your current customers expect, it’s also important to look more broadly at the market you serve. Do you fully understand the shifts that have occurred in the past few years - and the changes that are projected to take place in the near future?

While staying relevant is important, it’s not necessarily about being flashy or reinventing the wheel. It simply means making a conscious effort to anticipate and adapt your business to your changing market, customers and consumer behaviors. And while it is a simple concept, we see too many institutions that are resistant to change; as a result these institutions are voluntarily becoming irrelevant. Change your mindset – and don’t wait until your annual strategic planning meeting to discuss initiatives that will allow your institution to remain relevant in your market; staying relevant must constantly and consistently be addressed.

Change Your Mindset #9 - Leadership is not about job title

If you think that Leadership is strictly about who holds the highest job title in the Bank, then its time for you to change your mindset. During a couple recent Leadership Discovery engagements with clients it became clear that many of the staff members view leadership exactly this way. This way of viewing leaders deflects responsibility away from them, keeps them out of the communication loop and promotes a disempowered view they may have of themselves that they are powerless to evoke change in the organization.


Wrong! --- Anybody can be a leader if they are supported in doing so and if they view themselves as a leader. It is time for you to encourage and draw out leadership behavior in your colleagues and team members. The way you do this is to focus on qualities, characteristics which are common in many leaders. They are present in all of us, if we wake up to them. Vision and support are just two leadership characteristics which you could help cultivate in your team.

I am reminded of an analogy that people who are successful in losing weight, don’t go on a diet, they change their lifestyle. The same is true for leadership. It is time for you to go on your leadership “diet”, or better yet, “lifestyle”. So after your read this blog post, I want you to pick two team members and ask them to identify two people (living or dead) who they think embody a leader. Not only will this give you a feel for how they pick leaders, but you can then ask them why they picked those individuals and what characteristics those people embody.


This process will help wake up the dialogue and the individual awareness at your institution of leaders, leadership characteristics and leadership behavior.


Get going!

Change Your Mindset #10 - You have a brand whether you address it or not – Your logo is not your brand

Like it or not, you have a brand. Your institution is associated with certain qualities, products, people, and feelings, whether you’ve made conscious efforts to make it that way, or not. So, you might as well address the issue. You might as well take control of your brand.

Branding often gets confused with tools used to communicate with the public – logos, taglines, corporate colors, etc. Understandable, because “brands” are intangible assets, whereas logos and the like can be seen or heard, and they can be legally protected.

“Rebranding projects” often focus too much attention on those tangible pieces, and in doing so, they run the risk of ignoring the foundation upon which a brand is built. When you think “branding,” think beyond the logo, and focus on the intangibles. Focus on things like the way a customer feels when they think of your institution or the amount of trust they have that you have the customer’s best interests at heart. Think about what perceptions your customers and non customers have, and what about your institution helped to form them. Was it the logo, a clever commercial, or some great catch phrase? It’s more likely, that those perceptions were formed out of a combination experiences related to your institution.

Take, for example, the Maytag Man, who has been finding ways to fill his time for more than 40 years. The commercials are clever, but consumers have a funny way of deciding what they believe, and personal experience seems to always trump TV advertising. No matter how many naps the Maytag Man takes or how many games of solitaire he plays, a customer who has a bad experience with a Maytag appliance will form their own view of Maytag, and that view will likely be unfavorable.

The concept of a brand goes deep into your organization. It’s the essence of your institution as seen by the customer, and you can take control of it. You can take control of the messages that you send to consumers with every face to face interaction, every piece of mail, and every mouse click on your website. You can take control of the experience a customer has every time they enter your branch. You have no control over what your competition does, and you have no control over what the market does. But, you do have control over your brand.

Change Your Mindset #11: Don’t assume that you know your customers - Collect and Analyze Data Regularly

The amount of information made available to consumers in the past 30 years is greater than in the last 5,000 years. Why is this even relevant to marketers you ask? The economy is changing, market dynamics are changing, customer issues, financial needs and preferences are also changing – constantly. Therefore, please do not assume that you know your customers now because you perhaps did a survey last year, pulled a demographic report recently, etc.

I would like to offer you a couple of suggestions for how to really know your customers on a regular basis.

Tip #1: Commit to Systemized Customer Feedback Mechanism

You could maintain a web based survey tool enabling customers to give you regular feedback on key issues you identify. You can also still send a survey in your customer statements. Pick one or two key issues which you would like feedback on and change the issue once each quarter. By committing to a regular customer feedback process you send the message that their opinion and suggestions count and that you take action on this feedback

Tip #2: Analyze Demographic Information on your Markets Each Year

Many markets across the country have experienced dramatic demographic and/or economic shifts in recent years, which are often times never acknowledged by bank marketers and management teams; this can lead to a major disconnect in marketing when the assumed customer base is different from the actual customer base. Compare the profile of your customers with the demographic composition of the market to identify possible gaps. Remember: Ask not how your customers and markets are the same, but how are they different?”

Competitive pressures are on the rise in financial services, and it’s never been more important to know exactly who your customers are. It’s important because it creates an avenue where your most profitable customers can be distinguished from those that are not; it allows you to determine the segment(s) that are responsive to your messages and your marketing efforts; and it can bring clarity and focus to the direction of your future marketing efforts.

Food for thought

Mindset #12- Rethink stereotypes of demographic segments (Hispanic, Younger, Women, etc.)

As I was sifting through various common stereotypes, I came across an Article with this description of Gen Y: “while not roundly criticized as slackers, "Y" kids are nonetheless characterized as apathetic, lazy and spoiled.” As a member of Gen Y, I would adamantly deny that I fit into this reoccurring stereotype.

The common problem with all stereotypes is that they are based on general perceptions of a segmented group of people and serve to undermine the uniqueness of an individual by classifying people into a specific group.

And there is ALWAYS an exception, and most likely numerous exceptions, to any stereotype.

The Merriam-Webster Dictionary defines a stereotype as “a standardized mental picture that is held in common by members of a group and that represents an oversimplified opinion, prejudiced attitude, or uncritical judgment.” Repeated stereotypes affect the way society views a group and in turn affects the way the group views itself. With enough re-enforcement and repetition, stereotypes can be seen as reality rather than a blanket generalization.

Stereotypes, especially generational ones, such as Gen X, Gen Y and Baby Boomers, often times eliminate certain segments of the population. For example, the media constructed description of the “baby boomer” represents white middle class members of the generation, and ignores the experiences and vastly different lives of other races and socio economic classes.

Many times, stereotypes go beyond classifications of generations and permeate into our perceptions of race. And in these cases the stereotypes can become much more offensive and over simplified.

The stereotypes associated with the Hispanic market, which represents one of the fastest growing segments of the population, greatly impact financial services. More than half of all growth in the financial services sector will come from the expanding Hispanic population. However, this segment of the population is misunderstood, due in large part to repetitive stereotypes. Most of the population growth (75%) will come from 2nd and 3rd generation Hispanics, not illegal immigrants as stereotypes portray. Another common misconception of the Hispanic population is that it is low income. In reality there is large economic diversity, with 32% earning incomes over $50,000 and 14% with incomes greater than $75,000.

It is important to remember that you never know what the person walking into your branch has to offer. A young 20 something, in a T-shirt and jeans, may have $100,000 to invest. And if they are not given the attention, it will turn into a missed opportunity. It is important to understand each individual and identify with their unique life-stage. Instead of viewing a Gen Y person as unmotivated and apathetic, view them as someone looking to eliminate debt, trying to save for a house or invest in a retirement plan. See people not how they look, but rather as an opportunity for you to gain a loyal customer.

Stereotypes simplify groups of people to fit into neat categories and in doing so they deprive everyone of their individuality. No matter the stereotype based on sex, age, or race, each customer is first and foremost an individual, with specific needs and a unique financial situation. The more you try to classify people into a specific group, the less you understand them as individuals.

Change Your Mindset # 13: Marketing requires involvement at every level in your institution

Who is involved in your institution’s marketing initiatives?

If marketing at your institution has been designated the sole territory of your marketing director and/or marketing department, it’s time for you to change your mindset - as today’s most successful marketing initiatives are those that are supported by aware, informed and involved personnel at all levels within an organization, regardless of job title. The concept is simple; however, it’s one that is often times overlooked and/or ignored by many financial institutions.

First, and at the very least, your staff should be aware of the marketing initiatives and campaigns that are happening at your institution. Awareness includes knowing what messages are being delivered to the customer, the media through which those messages are being delivered, and the timing of the various initiatives. This level of awareness is important as it allows your staff to support, rather than hinder, the efforts of the marketing department. While awareness of certain marketing initiatives is pretty basic, it can allow employees at various levels in your institution to identify potential conflicting messages in the details that may be overlooked should the responsibility of marketing be placed on one person or group of people.

To further support your marketing efforts, your employees – especially your frontline employees need to be informed. This goes beyond simply being aware of your current marketing initiatives; it means that your staff is trained to anticipate customer questions and inquiries they have in response to your initiatives, to engage your customers in dialogue around to support your efforts, and to fully understand the goals of any initiative. While there are obvious training implications, ensuring that your staff is informed is critical in bringing your marketing efforts full-circle. Where many institutions’ marketing initiatives don’t go much further than delivering the message to the customer, informed employees can support the message/campaign and drive the marketing to sales connection.

Furthermore, institutions can benefit greatly from encouraging individuals throughout the organization to be involved in the marketing process. Ideas about how to market a specific product, reach a certain audience or communicate the right message shouldn’t be limited to the people in the marketing department or to those on the management team. In many cases, the frontline staff has the most meaningful dialogue with your customers, so listen to them. These employees hear customer feedback first-hand, can engage customers to determine if and how messages are being received, and can provide more qualitative feedback to the marketing team about customer responses. In addition, staff involvement in marketing ideas and decisions can encourage employee buy-in to your initiatives which, in turn, should help drive the success of the initiatives.

Can you think of a situation where an employee killed a potential sale simply because he/she wasn’t aware of, informed about, or involved in a certain marketing initiative?

Effective marketing requires that your initiatives extend beyond your marketing department. And while this level of involvement will, in most cases, require additional training – it’s a step that can not be overlooked. Change your mindset about marketing – take the time to make your staff aware of your marketing initiatives; keep them informed and educated about their role in supporting the initiatives; and encourage a heightened level of involvement from all members of your staff as means to stay relevant, be innovative and integrate your efforts throughout your institution.

Change Your Mindset #14- Community involvement means more than serving the community – become visibly involved

It is typical of community banks to assume that they are involved in their community, simply because they have a local branch serving the area. While most financial institutions claim to have a commitment and involvement in the community, the question remains what is considered true community involvement?

Community involvement goes beyond sponsorships and donations. These monetary contributions need to be reinforced with visible community activity that requires time and hands on volunteering, working side by side with members of your community.

By becoming visibly involved, banks can begin to stand out and gain the attention of the local community. It is important to choose a community activity that matches your bank’s message and goal as an institution. For example, if your bank’s objective is to help customers achieve home ownership, it would make sense to become involved in a community project like Habitat for Humanity, where the bank is helping others realize the dream of having a home. Community activities can turn into an opportunity, for essentially, free publicity. Local newspapers or television stations may publicize the event, and you will be able to showcase your involvement and commitment to the community.

Umpqua Bank is an example of an institution that has taken the spirit of community involvement above and beyond monetary donations and sponsorships. Umpqua offers a true commitment of employee time and not only community involvement, but a since of community unity. The community service motto is “together making a difference where we live and work”. The phrase creates a feeling of connectedness within the community and provides a sense that it is everyone’s responsibility to make the community better.

Umpqua created the Connect Volunteer Network, which provides full time employees up to 40 hours of paid volunteer time a year during work hours. The volunteer programs are focused primarily on youth, education, and community development. There is a running tally on the website that shows the number of hours bank employees have given to the “communities we serve”.

Umpqua is an example of a large institution, but it can be accomplished on a smaller scale. Iowa State Savings Bank in Creston, IA (assets of $112 mil.) is an example of a community bank that focuses its efforts on becoming visible in the area. The tagline throughout the website is “Bankers make great volunteers”. In this way, the bank’s ongoing community commitment is showcased on every page of the website, as opposed to being buried in the “About Us” section.

Iowa Sate Savings Bank realized that education issues were very important to their customers, so it began participating in community projects to improve youth development. The Bank partnered with Youth Plus and created the Excellence in Education Program, to reward people who are helping to improve education. It also started a program to send employees to volunteer in reading programs with local schools at the end of the work day. While it may cost the company some time during the day, the program allows bank employees to become visible within the community and to create a link between the bank and local educational programs.

The importance of community involvement can not always be measured in monetary expense and gain but rather an investment of time and effort in the community. The benefit of this level of involvement extends well beyond name, recognition to include public relations opportunities, reinforcing and crafting perceptions of your brand, and ultimately having a meaningful and tangible impact on your community.

Change Your Mindset #15 – Think Strategically, Do It on Purpose

How often do you make a financial decision based on a free gift? For that matter, when was the last time you were truly excited to get a free set of barbeque tools or a mousepad as a gift? These tchotchkies provide no real value to the consumer, so why do financial institutions insist on giving them away?

Typically associated with free checking accounts, the displays of these free gifts are an eyesore in branches across the country. They look cluttered, cheap, and they inevitably detract from whatever brand image an institution has created. The odds are also pretty good that most of these items end up either re-gifted, or in the trash somewhere (which, by the way, is probably for the best). Customers who are attracted by these free gifts are not likely to be committed to their relationship with the bank.

The concern here is not that institutions are giving gifts, but rather that there seems to be no thought put into what gifts are given or to whom. Promotional products are a $17.8 bil./year industry (more than outdoor advertising, Internet advertising or TV advertising). What began as a free toaster, has now become a giant game of “keeping up with the Jones’,” and in the process, none of it seems to be done on purpose.

In order to be effective, a gift has to have some value to the consumer. It should help to further the connection and the relationship between the institution and the consumer. Today’s typical college-bound student probably uses (or at least would prefer to use) a laptop, which requires no mouse. So, what message does Bank of Pontiac send to that student by offering them a free mousepad with their new account? How in tune with those customers’ wants and needs is that bank?

Another problem with the free gift phenomenon is that it focuses almost exclusively on new business. Research has proven time and again that new customer recruitment is far more expensive than retaining and cultivating current relationships. Every institution needs new business to be profitable in the long term, but new customer recruitment is tough work. The marketplace is saturated with noise, with institutions shouting about their products and rates. Instead of spending time and money trying to shout louder than the institution down the street, why not spend that time and money treating your customers so well that they can’t help but tell someone about you.

Try directing some of the dollars you spend on those free gifts at your current customers, and make use of those word of mouth referrals. Customer evangelists are some of the most powerful marketing personnel you’ve got, but you have to give them something to talk about before they can go to work for you.

Instead of offering an iPod to a new customer (who hasn’t yet proven their loyalty), why not offer something useful to your current customers? If you employ Certified Financial Planners, you could offer a free consultation with one of them. This serves two purposes:

1) It provides something of value to the customer, something that will hopefully help the customer manage their finances.
2) It showcases a service that customers might not even know existed. It’s a free sample of a service that the customer might later buy for the long term.

A gift like that presents your institution as a resource to be consulted throughout life, but more importantly, it’s strategic; it’s done with purpose. What else could you give your existing customers to show them your appreciation for their business? What would be valuable to them?

While we’re at it let’s look at another situation where the strategy and purpose seems to be seeping out of banking – branch design.

When institutions build new branches, the teller line typically ends up along the back wall. Why? Maybe the better questions are: Do we even need a teller line, or can we bring our people out onto the lobby floor where they can more easily interact with customers? Did we choose the way our branches look, or are we just following “what a branch should look like?” How could we do this differently, better?

Take a close look at your institution from head to toe. Take some time to turn over all of those unturned stones. Look at every bit of your day to day operation, and ask yourself: Did we choose this? Are we doing this on purpose? Is it strategic, or are we doing it by default? You might be surprised at how much “has always been done that way.”

Change Your Mindset # 16 - Advertising should do more than push products and rates.

Advertising and marketing are not one in the same. This seems obvious, but when we ask about the marketing efforts at small financial institutions, we invariably hear about newspaper advertising, billboards, and radio commercials. And why not? A good deal of time, money and effort goes into those ads, and advertising is often the most visible activity of a marketing department. There is nothing wrong with advertising; when done well, ads can be a valuable way to communicate with large numbers of consumers.

Beyond advertising, however, many financial institutions are handcuffing their marketing departments with relatively small budgets. This puts enormous pressure on marketing professionals to achieve a high, short term ROI from these ads, or risk having their budgets cut further. Since the quickest way to get money in the door seems to be with unsustainable rates, marketers tend to become product pushers, and their budgets become dominated by advertising costs. Herein lays the problem.

The most effective advertising does not solely push products. It is well grounded in an institution’s branding strategy. It communicates product offerings and promotional activities as part of a broader message. Most importantly, it is part of, and informed by, a comprehensive marketing strategy.

One of the better examples of a financial institution that seems to understand this is Bank of America. The “Bank of Opportunity” campaign presents B of A as a gateway to a realm of possibility for anyone willing to give the Bank a try. This commercial is a prime example of how B of A is able to present its message, and its value proposition, without ever mentioning rates. Granted, Bank of America’s $1.3 bil. marketing budget is out of the question for all but a select group of institutions. The Bank’s level of commitment and approach to marketing are not, however.

The truth is that, for better or worse, advertisements help to shape the consumer’s perception of your institution. If all your advertising does is push products, then all you should ever expect to attract are product shoppers, which usually equates to volatile money. If that doesn’t work for you, and my guess is that it doesn’t, try changing your mindset. Take the emphasis off of products, and focus on selling your institution’s story to groups of people who will want to buy it.

Invite the consumer to explore your institution a bit, and use ads to communicate the value that you can provide. Part of that value will inevitably be products, but the customer can find products anywhere. The job of your advertising is to communicate why consumers should get products from you.

Change Your Mindset #17: Reward customer loyalty in ways that are relevant and meaningful to your market.

Everyone is on the look out for the loyal customer. In fact, most banks are beginning to realize that without customer loyalty, their attempts to achieve organic growth will be scarcely possible. Some banks are actually enjoying some success. According to the newly released J.D. Power and Associates 2007 Retail Banking Study, consumer satisfaction with their banking experiences and commitment to their primary banking institutions increased appreciably during the past year. But while industry wide progress is being made, many banks are still making serious miscalculations and missteps when attempting to achieve customer loyalty.

There are obviously multiple factors that can influence a customer’s decision to stay with you or switch to the competition. In fact, there are even different degrees of loyalty depending on a customer’s demographics and needs. But one expectation seems to cross demographic lines, namely that customers expect that their loyalty should be rewarded.

This is one area where financial institutions could definitely change their mindset, especially when it comes to choosing how to reward customer loyalty. First of all, if you want loyal customers start by being loyal to them. Many times banks put all of their time, attention and financial incentives to acquiring new customers. When was the last time you offered a discounted rate to a customer that has maintained high balances for 10 years or more?

Secondly, the rewards you do give should be relevant and meaningful to your customers. You cannot imitate what Bank A does in Los Angeles if you are in Des Moines. You cannot duplicate what Bank B offers to its affluent white customers in Minnesota if your market is moderate income Hispanics in Texas. There is no one size fits all approach to rewarding customer loyalty. You have to do the hard work of identifying your most important (and profitable) customers, understanding their behaviors and unique needs, and then developing and implementing an appropriate strategy.

This whole topic of customer loyalty also prompts me to think about how many banks have yet to engage their most obvious partners in this effort – their front-line employees. The persistent industry mindset has banks rewarding employees who bring in new customers. Imagine how your culture would shift if you change your mindset and begin rewarding employees for customer retention. That, however, is a topic that will have to be explored in another blog post.

Change Your Mindset #18: Bankers' Hours are not necessarily Customers' Hours

Several years ago, I was speaking with the President of a community college who was describing the intense labor negotiations he was conducting with his faculty union. The college had shown a significant increase in demand in its evening and Saturday offerings while struggling to fill classrooms during the ‘traditional’ Mon-Fri 9am-5pm hours that the faculty was contracted to teach. He went on to stress his resolve to maintain a healthy institution by proclaiming “I am going to offer courses when students want to take them, not when faculty wants to teach them!”

Sound vaguely familiar? It is hard for me to understand, but even today I often hear bankers talk about their version of this story: “Extending hours will only spread out the same amount of business over longer hours.” Or, “When I was at Bank X we extended our hours and didn’t get any new customers.”

But let’s face it; people today are accustomed to the utmost convenience in every facet of their lives. A couple of examples: people (translation: your customers) today hear cable TV service advertising “On Demand” Movies, they can buy/download music at anytime, not to mention everything else that can be accessed at anytime online. But that doesn’t mean movie theatres are obsolete, nor are music outlets, or sit down eateries, or libraries. And I’m sure you can think of countless other examples from other industries we see every day.

And while there are obviously other factors in play, customer convenience is at the core of all these examples. Customers are conditioned by other industries to demand access whenever they want it; so it’s no surprise that convenience is one of the biggest drivers in many of today’s consumer purchasing habits.

While we aren’t recommending that you follow Bank Atlantic’s approach where many of its branches are open seven days a week with some open until midnight, we are encouraging you to consider your customers’ needs and preferences. As customer expectations of bank hours shift, you must address the shifts in order to stay relevant and competitive. In many markets this means staying open later than 5:00 p.m. at least a couple nights a week and having branch hours on Saturday; and increasingly, we are seeing the expectation, or the norm shift to extended hours across all days of the week.

TCF is another great example of a bank that has made a commitment to extended hours. TCF is "open 7 days" and has made that statement its most visible value proposition as its tagline.

So when we are thinking about the value added by your institution, consider how convenient you are in terms of operating hours in addition to your physical location. . For “If you build it (or have built it), they will come,” can only hold true when it’s convenient for your customers – and it has to be on their terms/hours, not yours.

Change Your Mindset #19: Your Customers Need to See Themselves in You

In today’s commoditized banking world, customers are really searching for a bank that they can connect with, share values with and one in which they can see themselves. It’s all about being relevant to your target market and taking steps to show your target that you understand what they are all about. While there are many ways to let your customers see themselves in your institution, there are a few we see on a frequent basis.

For example; if your bank caters to the Hispanic community, you need to be relevant to that segment’s needs and preferences, which may include offering Spanish language brochures and merchandising, hiring Spanish speaking employees, having Spanish advertising and messaging, and so on. Beyond language, a target audience should see themselves in the photography you use in your collateral, in the artwork you display on your walls and in the community organizations you partner with.

Let’s look at another example we encounter on a regular basis; if your bank is attempting to attract a younger customer segment (namely Gen Y) then you need to hire younger employees. Gen Y customers will not relate well if they walk into your bank branch and everyone waiting to serve them is of Baby Boomer age. Gen Y customers want to feel comfortable when doing business with your bank, and they can more easily relate to people closer to their own age. If you are explicitly pursuing the younger generation markets, you can’t profess to know them, know their needs, etc. if you don’t even have any employees that are their age.

The main point here is “be relevant”. You must be relevant to your target audience in everything that you do. Staying relevant to your target audience means talking the way they talk, using the technology that they use, expressing the same values, and tailoring your ads, products, images and merchandising so as to reflect your target audience.

Another Gen Y example is offering the types of technology that someone in that age group would expect. Your institution can’t be relevant with someone from Generation Y if your website either does not exist, or is remedial at best. One of the first places a Gen Y customer will attempt to learn about your institution is online. If you do not have a website that is attractive, that speaks to them and that meets their standards – then, chances are, they’ll be onto your competitors’ websites.

On the flip side, if your bank targets upscale and wealthy customers in the Baby Boomer generation who are nearing retirement age and looking for investments, staying relevant means something totally different. The expectations of this customer segment may not be met with a branch staff of 20 year old tellers and personal bankers, digital signage with flashing CD rates, and “We now offer free checking!” banners hanging outside the branch.

You have probably seen the WAMU Banker’s Pen commercials:


This is a good example of stressing the point of staying relevant. These commercials are geared toward the younger market segments and are saying WAMU is right for you If you’re looking for an institution that does things differently from the traditional banking business model.

Some of the best commercials I’ve seen recently related to generational marketing are for Investment Firms like Fidelity and Ameriprise. These two commercials do a great job illustrating how these companies are connecting with their target segments and staying relevant.

Fidelity Investments:


Ameriprise Financial:


Staying relevant works across all customer segments, and does not only apply to younger generations. It may be that you need to work harder to stay relevant to the younger demographic because their needs aren’t as obvious to you, but that is a trend faced by institutions across the country. You don’t know what you don’t know, until you do a little work to dig beneath the surface.

It all starts with knowing your market. Once you know your market, you can speak more directly to them. And once your customers see themselves in you, and realize that you are the institution for them, you’ll be better positioned to both retain those customers and attract similar ones.

Change Your Mindset #20: Pay Attention to Marketing Outside of Financial Services

Today’s most successful companies are those that market themselves effectively; they connect with their target audience, communicate a clear value proposition and deliver with consistency. And in today’s crowded marketplace where consumers are exposed to thousands of messages a day, financial services marketers must pay attention to marketing initiatives both inside and, perhaps more importantly, outside of the industry in order to stay relevant and effective.

Many financial marketers rely heavily on the traditional marketing playbook with initiatives like local newspaper-ads, sports team sponsorships and in-branch flyers to promote products; and while these initiatives may contribute to success at some level, they are often-times predictable and easily overlooked by consumers. In order to create the kind of buzz that will generate real results at the bottom line, institutions need to get noticed and focus on integrating their efforts effectively across various channels; this works to introduce, reinforce and keep your message in front of your audience.

While buzz can be generated in a number of ways, it’s important that you remember that you want to be noticed for the right reasons. This begins by identifying what message or characteristics you want to emphasize in your marketing efforts and ensuring that all of your initiatives work to support them.

An example of this kind of thinking can be found in many of Umpqua Bank’s marketing initiatives where it has borrowed from the retail industry in creating an environment that is much more like a retail store than a traditional bank branch. Umpqua generates buzz with initiatives like its Discover Local Music Project where the Bank supports local musicians, creates compilation CD’s and sells them in their branches and online. This initiative reflects Umpqua’s dedication to being involved in the communities it serves and is in-line with their brand and messages; this allows the initiative to both create and sustain a buzz over time.

Overall, financial services marketers need to watch for trends and shifts in their target audience and reflect those shifts in the marketing initiatives. We see great opportunities for institutions to expand upon their online presence with social media like blogs and podcasts; to run campaigns that connect emotionally with the audience as opposed to emphasizing product and/or rate; and to leverage community involvement as means to reinforce an institution’s messages and brand. And while many of these kinds of initiatives have had successes in other industries, there’s no reason why they shouldn’t or couldn’t be successful in financial services. With that, we ask that you pay attention to marketing outside of financial services and be open to the kind of unexpected initiatives that can get you noticed and have a real impact on your bottom line.

Innovation Leaders: Change Your Mindset

This month’s Community Banker Magazine is accompanied by a supplement featuring articles from service providers considered to be innovation leaders in financial services. Market Insights has a well-earned reputation for promoting change and innovation in the financial services industry; so we were both flattered and pleased when we were asked to contribute to the supplement.

When developing the article, we tossed a few ideas around and realized that the most pressing issue facing today’s financial services industry is the reliance on doing business as usual and the need to approach issues with a different mindset. And, as the title of the article suggests – if you want different results, you have to think differently.

While the article stresses the concept of approaching today’s complex issues with a different mindset, we feel it’s equally important to provide you with practical examples and ideas of what thoughts and behaviors you can shift. We also want to demonstrate how changing your mindset can actually impact bottom-line results at your institution.

So, we developed a list of the top 20 ways you can change your mindset. Our team will post one reason, example or idea every day in June on our blog. While we realize that there are more than 20 issues that should be approached with a different mindset, we feel that these 20 are the most pressing, widespread and worth bringing to your attention. Let us know what you think.

To request a reprint of the article Change Your Mindset - If you want different results, you have to think differently, contact me at bwalen@formarketinsights.com