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 #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 #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 #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