The Disconnect Between Better Service and Growth

Today’s Industry Insights newsletter from creditunions.com features an article that offers an interesting strategy for growth – better service. And while many institutions could benefit from better service, I see a major disconnect between simply offering better service and realizing the growth objectives you’ve defined for your institution.

The author states: “Not many people (in the credit union industry) seem to be talking about providing better service,” and continues to suggest that focusing on better service is the “recipe” for growth.

I would take a different stance - the issue within financial services is not with institutions talking enough about providing better service, but with institutions making generalized statements that assume traditional definitions of service.

Institutions looking to grow have much more to consider than their level of service. Perhaps the most important priority for these institutions is taking the time to fully understand their markets, their customers and their competitive position. Many institutions fail to look further than demographic data and peer group studies in attempts to identify growth opportunities. And while these pieces of information are helpful, they do not paint the whole picture and fall short of providing any substantive strategic direction.

If you’re really looking to grow, start by assessing your market. This means quantifying available dollar potential; identifying available niche opportunities; projecting dollar growth; and taking a good look at your institution relative to your competition and your customers' needs.

Better service is not the silver bullet that will allow your institution to acheive and sustain growth; and while there is no silver bullet - any institution can take the first step of assessing their market to determine unique opportunities for growth.

Citi Let's Get it Done

Citi's new campaign let's get it done looks a like Bank of America's Bank of Opportunity campaign. And, while the two are similar in nature, they are both doing exactly what needs to be done in today's industry - they connect emotionally with the customer and work to establish and build a relationship with them.

Notice that the focus of these campaigns is not on products or rates - the campaigns allow customers and potential customers see themselves in the people in the ads. Each campaign also does a great job incorporating their respective logos into the campaign - in Citi's case, the red arc ties together dreams and realities. This kind of careful attention to the message will have an impact, and it will reinforce these brands - and this is exactly the kind of thinking that should be applied to so many community-based institutions' marketing efforts.

Hispanic Marketing Mistakes

Marketing to Hispanics is one of the most pressing issues facing financial institutions across the country. The fastest growing minority group in the United States poses a huge opportunity for institutions; however, it seems as though so many institutions simply don't know where to start, or have no interest in targeting the Hispanic segment.

Joe Sullivan and Jim Perry recently gave a presentation to the Illinois Credit Union League titled "The Hispanic Market: Myths, Facts and Untapped Opportunities" which highlighted some common misconceptions of the Hispanic segment and the opportunities that are available to financial institutions that can effectively target this segment.

In addition, today's issue of BAI's Retail Strategies has a great article "Common Mistakes Marketing to Hispanics" - I would encourage that you check it out, as the mistakes described in the article are issues we address in many of our client engagements.

What does Customer Service look like?

We were asked to write an article for the Financial Managers Society discussing the issue of customer service and the role it plays in today’s financial services industry. You can read the article here.

The article emphasizes the importance of focusing less on traditional definitions of “customer service” – which often times include nice, friendly and accurate service - and clearly defining what customer service means at your institution. Customer service is such an overused term in the industry that it has lost its meaning to your customers as a result; so, you need to make it mean something to them. And, while you’re at it – use this exercise as an opportunity to create points that differentiate you from your competition.

What does customer service look like at your institution?

It could be:

• That no one ever has to wait in-line at your branches because they are greeted and directed to the appropriate office or to a comfortable waiting area and asked if they would like a cup of coffee and a magazine.
• That your personal bankers routinely make visits to your small business customers so they don’t have to leave their place of business to conduct their banking.
• That your greeter knows and addresses each of your customers by first name every time they walk into your branch, and that the greeter can anticipate the reason why repeat customers have stopped in.

It could be anything; but, clearly defining what it means at your institution and what it means to your customers will have a far greater impact than assuming that they know what you mean when you say that you provide “outstanding customer service.”

Stuck in Time

From “Who Do You Love?” in this month’s Fast Company:

“Chris Bangle, BMW’s Design Director, contends there’s a universal explanation for why successful brands stumble: They fail to evolve. Bangle calls them ‘fortress brands.’ Deeply rooted in their heritage and values, they are inflexible, unmovable, and ultimately stuck in time. ‘That’s the problem with a dogmatic, static brand,’ he says. ‘The competition will outflank it, and the world will pass it by.’”

This is extremely relevant to financial institutions – especially the countless number of community-based institutions that are deeply rooted in their values and seemingly stuck in time. We all know that what got us here won’t get us to where we need to go. And with aggressive regional competition, increased customer expectations and shifting consumer behavior, successful financial institutions will be those that are flexible, relevant and willing to step away from the same-old way of doing things.

Attracting the Younger Employee

We have been having quite a few conversations lately about attracting younger employees to work at financial institutions; and, as a member of Generation Y, I would suggest the following as a very simple way to think about attracting younger employees. This is suggested as a starting point and will hopefully challenge your thought process as it relates to hiring at your institution.

First of all, think about “coolness” – and I realize this is difficult for many of today’s financial institutions as most members of Generation Y wouldn’t consider many financial institutions to be cool (or attractive) places to work. For reference, think about today’s high profile companies like Google and Starbucks that are attractive and considered “cool” places to work by many younger people. Sure the perks are great at each of these employers, but perhaps more important is the environment that each has created for their employees. These environments are modern, sophisticated and fun places that are conducive to self-expression and creativity - characteristics that wouldn’t normally be associated with banks.

So take a look at this graph and think about the coolness that would be associated with your bank - by someone under the age of twenty-five. It’s probably fair to say that there is an inverse relationship between coolness and compensation required to attract the younger generations of employees; and that if you rank low on the coolness side, than your compensation offering would need to be higher to attract valuable employees in this age group. However, the flip side to this is more important. Banks need to shift focus to make the workplace more attractive to younger generations – this then has a rippling effect as a bank with younger employees becomes more easily marketable to younger generations as well.

This topic is deserving of more careful attention by banks around the country – and I plan to revisit this topic in future blog posts, articles and presentations.