Two Questions Bankers Should Be Asking Themselves

Two recent posts by Bill Taylor (co-founder of Fast Company Magazine) on his Game Changer blog have really grabbed my attention. Both posts pose questions that every financial services executive and marketer should think about.

The first question, discussed in the more recent post, deals with benchmarking – “Why copy the competition?” Bill frames this up using Commerce Bank as an example, saying “They (Commerce Bank) didn’t evaluate the company against Citigroup, Bank of America or Wachovia. They looked to Starbucks, Target and Best Buy.”

More people in financial services should follow a similar approach. Rather than looking at how your institution stacks up against your peer group, bankers should be looking to apply some of the thinking used by companies outside of the financial services industry.

And, I think this question should be asked anytime someone proposes adding/developing some kind of copy-cat product or service. All too often, new products are developed and introduced in response to a competitors’ new product offering. This kind of reactionary thinking only contributes to financial institutions looking more like one another – and does nothing to differentiate your institution.

The second question is my favorite: “As a customer, why should I choose your bank over the competition?”

Financial institutions need to establish relevant and meaningful ways to differentiate themselves from the competition. And, they need to communicate those differences in ways that everyone can understand. Think about what members of your team would say when asked this question.

Taylor’s post continues to say: “How can any business expect to outperform the competition when its own employees can’t explain – simply and convincingly – what makes them different from the competition?”

Some of the most innovative ideas in financial services are borrowed from other industries – and, in many cases, they can give financial institutions a clear and differentiated competitive advantage. It seems as though the most important step is often times the most overlooked – employee training. Every member of your staff should be able to talk “simply and convincingly” about the differences between your institution and the competition.

What We Can Learn from ING

I could not agree more with Brady and Jeff’s postings regarding the issue of brand being critical within financial services.

I was out for my morning run the other day and ran by the new ING Direct Café “branch” in the Gold Coast neighborhood of Chicago. The time was 6:55am and when the manager saw me peering through the window he rushed over to open the doors and let me in early even though they did not open until 7:00 am.

I believe that traditional banks and credit unions could (and had better) learn a lot from the forward thinking companies like ING. Adapt or die, or at least fade into compete and total irrelevance!

A facility is a physical manifestation of the commitment to brand, target market and business philosophy of any financial institution, and ING certainly embodies this commitment. When I toured this 5,000 square foot space I was constantly reminded of the visual, verbal and experiential elements of a brand, and how this was successfully executed in this space. The visual elements are everywhere: the corporate orange color on the walls, the orange in the coolers, water bottles and sweatshirts for sale, everywhere there were reminders that I was in this great financial superstore.

The verbal elements of brand were everywhere. I spoke with two team members and they both engaged me in conversation, and when I told them of my work as a consultant, they invited me to bring in clients to tour the space, use the meeting areas, try the online experience and share a cup of coffee.

The experiential elements were everywhere: from the Pete’s Coffee and Tea they serve (branded as ING of course); the computer monitors everywhere inviting me to engage with the ING brand and portfolio of offerings. The manager reported that the daily foot traffic is more than 450 people per day visiting the “branch”. That is more that most traditional banks and credit unions see in an entire week!

My experience in the physical space itself was uplifting in that it was light, airy, open and I had this feeling of “optimism” that financial services really is transforming. As I reflect on this experience at 7:00 am on a Tuesday morning I am reminded that what I keep preaching to our clients is beginning to materialize. Customers want to be engaged, entertained, catered to and want a financial services ally who will help them plan for and achieve their goals, and not have products and services “pushed” onto them that they don’t need.

My experience with the ING branch was the epitome of this belief. I was delightfully surprised at how upbeat and engaging the ING team was with me. No, actually, come to think of it, I was not surprised at all.

ABA Discussion Topic 5: Branding Across Business Units and Market Segments

The last topic up for discussion from the branding roundtable discussion from this year’s ABA Bank Marketing Conference was branding across business units and branding across market segments. While the topic was not discussed to the degree that the other four topics were, I think it’s worthwhile to offer our perspectives here.

For clarification, the topic of branding across business units was brought up by a woman who wanted to know if and how she should approach bringing together her bank’s brand with its separate mortgage arm – which I understood to operate as an entirely separate business with its own brand. She also asked about branding across different market segments in the same breath, which is an entirely different topic altogether – but I’ll offer my take on both.

Branding Across Business Units

Bringing two business units together under one brand is much like bringing two financial institutions together during a merger. While each situation is unique, it can be expected that there is going to be some compromise. Like any branding initiative, you will need to establish brand standards, train your staff and manage the perceptions of your customers and the community while any changes are happening.

Branding Across Market Segments

I like the fact that the issue of branding across market segments was brought up during the discussion, as I think it’s an issue on the minds of many bank marketers. I think the most important point to make is that your brand is who you are – regardless of whom you are talking to.

While marketers certainly need their message to be relevant to their targets, they must also ensure that their messages do not conflict with one another. I think there is a tendency for some marketers to tell one group what they want to hear, and then turn around and tell another group what they want to hear (and sometimes message #2 isn’t in-line with message #1) – and, this simply can’t be allowed to happen if you’re looking to build a powerful brand with a consistent message.

Whether you’re bringing together business units or targeting different market segments, there will be branding implications to consider. And, like much of the discussion we’ve had since the Bank Marketing Conference, management of your brand during times of change is critical in creating the perceptions your customers and your community have of your institution.

What do you think Jeff?

ABA Discussion Topic 4: Branding and ROI

Like Jeff, I am not surprised that the topic of branding and ROI was brought up at the branding roundtable discussion during this year’s ABA Bank Marketing Conference.

The context in which the topic was introduced to the group is one that I am sure many bank and credit union marketers are familiar with. It goes something like this: “Our brand could use some help – but can’t get budget approval without showing projected return on investment.”

Knowing that ROI will come up in a branding discussion, marketers should be prepared to steer the conversation - and use it as an opportunity to educate their colleagues about brand and the process of branding.

For some direction in reshaping the conversation, check out Ron Shevlin’s post.

I would also like to emphasize a point that Jeff made – your customers already have perceptions of your brand, and every experience they have with you contributes to those perceptions. Rather than allowing those experiences to happen by chance, well-branded companies take deliberate steps to craft and manage the experience their customers will have; this in turn allows an institution to have more control over the perceptions their customers have about their institution. And while some kind of ROI calculation would make many marketers' jobs much easier, it simply isn't going to happen.

Think of Starbucks. Its brand is reflected in everything from the “help us help the planet” message on their coffee cup sleeves to the iTunes free-song download card I received with my coffee this morning (even the song - A Fine Frenzy’s “You Picked Me” was carefully selected). Somewhere along the way, marketers at Starbucks made the choice to include these things as part of the customer experience. And, I would be willing to bet that the marketers didn’t calculate the ROI associated with these choices – and that the same holds true with many of their other choices made in supporting and enhancing their brand.

At the end of the day, your brand is who you are. You can either make the commitment and investment to create the experiences your customers have with you, or you can leave it all to chance. And, you can bet that today's strongest brands aren't leaving much to chance.

Check Out the ING Cafe in Chicago

So, I finally made it down to check out the new ING Direct Café this weekend – and I was very impressed. The Café, which opened last month in Chicago, is the fifth physical “branch” location from the internet-focused institution, and if you have a chance, you should check it out yourself.
As the name implies, this isn’t your typical bank branch – it’s set up as a café serving coffee from Peet’s Coffee and the baristas double as personal bankers who probably spend more of their time making cappuccinos than opening savings accounts – but that’s exactly how ING intended it.

In an industry where financial services executives and marketers are looking for ways to drive traffic to their branches and get customers to stay a while, ING seems to have figured out what works for them – as the place was packed when we stopped in.

First of all, the café is in a great location with tons of foot traffic; it’s near Michigan Avenue shopping, an el station and a Loyola University Campus. And, the café is impossible to miss – as the orange façade screams ING to anyone within two blocks.

Once inside, it definitely feels more like your local coffee shop/internet café than your typical bank branch. Teller lines are non-existent; instead, you are greeted by the baristas – mine happened to be the branch manager. There are no personal banking desks – but, there are tables and chairs, lounge chairs, and about a dozen internet kiosks for anyone to use free of charge.

My wife and I had intended to take our drinks to-go, but, after ordering our drinks the manager said “I hope you’re planning to stay and drink these here – we have cool espresso glasses…and it always tastes better from a real glass.” So, we decided to stay. And, as our drinks were prepared we continued our conversation with the manager, who let us know about the weekly specials. On Fridays, customers’ drinks are free if you wear orange (the ING brand color); and, on Mondays your drink is half-price if you use your reusable ING travel coffee mug.

Me with my "really cool, real espresso glass"

In my conversations with the branch manager, I learned that the café also has a community room that is available to anyone to host presentations/seminars at no cost. And, that the entire facility is available to anyone after hours if a larger space is needed – this is also available for free. The entire space is carefully planned out – with a good mix of entertainment and merchandising, and the brand is reflected everywhere.

I told the manager that I was surprised that he didn’t ask us if we were ING customers or try to pitch us any banking products – and he said “that’s not what we’re here to do; we want you to enjoy yourself and we know that you’ll ask us about our services when you’re ready.”

Perhaps the most interesting part of the experience came as the customer in front of us at the coffee counter tried to tip the barista – to which the barista said “thank you, but we’re a bank – and we want you to save your money.”

ABA Discussion Point 3: Developing a Message to Appeal Broadly

When asked about the most pressing branding issues facing financial institutions, one participant in the roundtable discussion at this year’s ABA Marketing Conference responded:

“We need help developing a message to appeal more broadly.”

In an industry where so many institutions are striving to be “all things to all people” with messages that are already very general and safe, financial institutions should be taking steps to narrow (rather than broaden) their messages – and to clearly communicate the value they bring to their target markets.

Rather than addressing the issue of creating a message with broader appeal, I think the question that more bank marketers should be asking themselves is:

“How can our message be refined to speak more directly to our target market?”

While I can understand the interest in trying to attract more people to an institution, it’s important to remember that the industry is full of so many other institutions trying to do exactly the same thing. And, from the consumers’ perspective, this can only make it more difficult for them to distinguish between institutions in making a choice.

As a result, institutions should be looking to clarify their target market. And, after the target market has been established, it’s important that marketers take the time to understand the needs, values and preferences of that target. This level of understanding will allow messages to be created that have the ability to cut through the noise of other institutions’ more generic messages.

Keep in mind, that while your refined message may resonate loud and clear with your target – it may not be well received by everyone. But this is exactly what you are trying to do – allow people to easily see that you are the choice for them…even if this means that others will have to keep looking.

Be sure to keep your eyes out for Jeff Stephens' insights relative to this topic on The Story.