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.