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.

The Great Exchange

As I posted earlier, we spent the first few days of this week in Orlando as participants at Americas Community Bankers Great Exchange Conference. The conference was great, and I would like to thank all of those that we met, talked to and shared ideas with during the conference.

While we were involved in two presentations: “How to Differentiate Your Bank” and “Life-Cycle Marketing,” perhaps the most interesting session we participated in was Tuesday’s peer group session, where we discussed three issues that attendees identified as most pressing to them. While a majority of the people in the room held marketing positions – these most pressing issues extend well beyond marketing, and are issues that many institutions across the country are currently facing:

Attracting Younger Customers
Many community banks are faced with an aging customer base; and, as a result are under pressure to attract younger customers to feed the new customer pipeline. I found it interesting that people in the session couldn’t understand why the younger generations would be attractive targets. Their reasons included everything from low incomes to irresponsibility; but, these are pretty big generalizations, and if younger generations aren’t targeted in some capacity, who’s next in line? It’s critical that community banks first realize the importance of targeting the younger demographic segments and follow that with the development of an aggressive strategy – which has implications well beyond the marketing department.

Growing Core Deposits
We have heard this one before – and growing core deposits will continue to be an issue for community banks. Especially in the wake of investment firms like Edward Jones and Charles Schwab continuing to market themselves more aggressively to a wider audience. As with most industry-wide issues, there is not a universal answer here. Real sustainable growth in deposits is more likely to come as you communicate and deliver a real value to your customer – and move away from rate or product driven promotions. And, growing core deposits requires a thorough understanding of your market, the potential within your market and, ultimately, a strategy for achieving that potential.

Training Your CEO
We found this issue to be one of the more interesting issues to arise in conversation – but, once again, the room was largely those in marketing positions; and it’s been our experience that there is usually a disconnect between marketing personnel and the CEOs of financial institutions. So, we discussed ways for marketing heads to better communicate the value of marketing to their CEOs who, in many cases, think of marketing as too “touchy feely.” Some of the more convincing ideas involved discussions of best vs. worst case scenarios, and conducting thorough research into costs and projected ROI before presenting ideas for approval.

Overall, the conference seemed to be a success. I would like to invite anyone to share their thoughts, ideas and comments about the conference right here. And, as always, if you have any questions about our sessions during the conference, please feel free to email me at bwalen@formarketinsights.com.

Three Words

It’s a very simple question; yet, it proves to be a challenge for many community bankers to answer:

What three words best describe how your institution is different from the competition?

We love this question because it is a challenge. It’s even more challenging when we let people know that their answers can not include words like: local, good service or community bank. And this was exactly the question Joe Sullivan posed to the audience this morning during his session: “How to Differentiate Your Bank” at America’s Community Bankers’ Great Exchange Conference in Orlando.

The question encourages people to get down to the core; to emphasize their institution’s strengths; and it starts to inform the first steps of a differentiation strategy. The session was very well-attended this morning, which is an indication to us that differentiation is becoming a more pressing issue among today’s community banks. In addition, the participants asked some great questions which I hope to post here with respective answers within the next few days.

Until then, what three words best describe how your institution is different?

Reality Check

Most financial institutions state growth as one of their goals every year, and 77.8% view branching as their chief avenue to grow. Institutions are seeing mixed results; however, because branching is no longer an automatic success. Instead, many institutions are turning to organic solutions such as differentiation. We at Market Insights are encouraged by this, because it’s something we’ve been talking about for years.

Still, most institutions are spending a lot of time, money and energy pointing out the differences between organizational structures and ownership, and virtually no time pointing out the things that make their institutions unique. They haven’t seen the results that they expected, and now they’re wondering, why?

CALLING ALL CREDIT UNIONS AND LOCALLY OWNED COMMUNITY BANKS

It’s time for a reality check. It’s time to check in with how consumers view you. Step out from behind the teller line, away from your desk, out of the office and separate yourself from everything connected to your job.

Now ask yourself:

Do you care what type of institution holds your checking account? Does it matter who’s paying that 5% on your CD? How much of the interest from your loan do you expect to benefit from through Community Reinvestment?

The simple answers to these questions for most consumers are: No. No. and Huh?

It’s time to take that rare, proactive approach to answer the public’s age old question of, “What does that mean to me?” Customers, members, and clients alike have a hard time connecting with the classification of any institution, because quite frankly, they don’t see how it affects them. If you can show the general public some real value (in their eyes, not yours), then you can start to build a case for your institution.

Where do you start? Avoid the Credit Union vs. Bank and the Community Bank vs. National Bank comparisons; and instead, focus on how your individual institution is different from every other institution in Bankland. Figure out what you can provide that is truly unique to your institution. Then figure out how to communicate your uniqueness to the public. After all, your most compelling case for Community Banks is also a compelling case for your Community Bank competitors.

Next week in Orlando

I am looking forward to America’s Community Bankers’ Great Exchange Conference in Orlando next week, and wanted to get a pulse from anyone who is also planning to attend. We’ll be exhibiting and Joe Sullivan will be presenting two sessions during the conference; we would like to give you the opportunity to ask us questions before the conference – which we will answer here and incorporate into the sessions where appropriate.

Session Details:

Monday, April 23, 2007
10:30-11:45am

How to Differentiate Your Bank

Find out how to determine the key factors that differentiate your bank and communicate effectively to employees, customers and other stakeholders. Defining your brand is more than a logo, it’s key message points and action that supports making your bank standout.

Wednesday, April 25, 2007
8:00-9:15am

Life-Cycle Marketing: From the First Account to Retirement Plan

Learn how to build a life-cycle marketing strategy that delivers financial services targeted to key life milestones from saving for that first new bike (or iPod) to going to college, buying a car or residential property, and starting a family. Find out how to obtain and track important data to anticipate financial services needs to match each customer’s evolving needs.

If you’re planning to be at the conference and would like to talk to us about the sessions, our services and/or your unique challenges, send me an email at bwalen@formarketinsights.com or stop by and see us during the conference – I’d be glad to set aside some time for a conversation.

We’ll look forward to seeing some of you in Orlando.

CUNA Marketing and Business Development Conference

I recently presented a concurrent session at the CUNA Marketing and Business Development Conference in Las Vegas. What a fun, innovative and energetic conference.

I found the attendees completely pumped about being challenged to think and do things relative to marketing – differently. I spoke of the need to consider what I call the 3 additional P’s of marketing (beyond the 4 traditional P’s of marketing), to help transform their businesses.

My three P’s are: Make it Personal, Make it Product Free and Do it with Passion! It became the new chant at the conference!

Gone, MUST be the days of impersonal service and lack of connection with the member or customer, gone MUST be the days of the product of the month and pushing what the consumer does not need, and gone MUST be the days of people who do not live and work from passion.

All of the great marketing in the world will not get any type of business anywhere, unless we create a personalized experience for the consumer, we connect with them at a deeper level and we embody passion.

Love, Hate and Indifference

Jeff Stephens’ comment to my post yesterday makes a great point about refining your message enough to allow customers and prospective customers to “clearly determine that you’re not what they’re looking for.” The flip side to this, of course, is that a refined message will allow others to clearly determine that your institution is exactly what they are looking for.

If you think about it across a spectrum with love on one side, hate on the other and indifference in the middle, we see too many banks seeking the comfortable middle ground with generic and all-inclusive messages – and this does nothing more than create a large group people who don’t really care about you one way or another.

Herein lies a challenge for many institutions – make a decision: decide who it is that you really want to love your institution. Then, hold that up to the messages you are putting out there. Do your messages resonate with this group; encourage them to establish and build a relationship with you; and make it easy for them to refer their peers to your institution?

At the end of the day, the customers that really love your institution will still be your most valuable customers – even when your competitor offers a little better rate or the latest iPod for opening a new account. And once you can take a stance and add real value to a focused target market (decide who should love you and who should hate you) you can differentiate your institution from the “all things to all people” competition, and allow your target to easily see that you are the best choice for them.

Your Institution's Personal Ad

If your institution had a personal ad, what would it look like?

There’s an interesting article in April’s issue of Fast Company that equates a brand’s message to personal ad headlines on match.com. Frankly, there are some strong similarities between the two: they have to be short and to the point, they should be written to attract your target, and – in reality, most of them are boring, safe and ineffective.

The article “Polarize Me” offers insights from Made to Stick authors Dan Heath and Chip Heath. The first of which is “If you want people to like you, first decide who needs to hate you.” While financial institutions really don’t need to focus their attention on deciding who needs to hate them, they should be clarifying their target and crafting a message that resonates with that target. Essentially, this is the start of a differentiation strategy; and in today’s industry where so many institutions are trying to be “all things to all people,” differentiation is more important than ever.

The article refers to this as the “Hey phenomenon,” where companies are too general and all-inclusive in their messages. In comparing brand messages to the personal ad headlines, the authors say “Why do these headlines suck so much? Fear. Fear of saying too much. Fear of saying something clever that someone might think is stupid. Fear of saying something revealing that might turn someone off. The headlines try desperately not to exclude anyone. In doing so, they succeed at boring everyone.”

Nowhere do so many companies “try desperately not to exclude anyone” than in financial services. The industry is flooded with generic value propositions which usually include promises of outstanding customer service and quality products. Many of today’s successful financial institutions are those that have clearly defined who they want to be and, perhaps more importantly, who they do not want to be. This clarification allows them to make decisions which ultimately contribute to a more focused message, a more carefully crafted experience and a targeted value proposition that actually communicates real value.

Branching Update from ABA Competitiveness Survey

This month’s ABA Banking Journal includes the organization’s annual Community Bank Competitiveness Survey which, once again shows that branch expansion is considered to be community banks’ main source of growth. More than three fourths of those surveyed (77.8%, up from 76.7% in 2005) view expansion as the chief source of growth.

I am not surprised by this; but, what does growth mean to the people surveyed? Does growth have more to do with physical location, presence and size of footprint than deposits, share of wallet and profitability? If this is the case, then I would have to agree that branch expansion could be considered the most viable way to grow in terms of a physical presence. However, if we were to talk about growing deposits, share of wallet and profitability – I would challenge the thought that expansion is the best way to grow, and propose that organic strategies are the most viable way for many community banks to achieve and sustain growth.

We all know that expansion is an expensive commitment. Perhaps this is why 71.7% of this survey’s respondents said that their networks have stayed the same in terms of size between 2005 and 2006. It’s interesting to think that more than three fourths of those surveyed said that branching is viewed as the main source of growth, and only one fourth of the respondents said that their branch network has grown over the past year. Branching is expensive, but it is not the only way to grow. Community banks have to consider organic growth opportunities in order to remain viable.

The survey also discusses the issue of convenience. Once again, this issue was one-dimensional, as convenience was based only on physical branch hours. And, once again, there were really no surprises: less than one quarter of those surveyed offer evening hours; a quarter of those surveyed are not open on Saturdays; and forget Sundays – only 5.4% of those surveyed have Sunday hours.

The biggest red flag about convenience in article came in the author’s summary, saying “With more deposit volume arriving in the electronic in-box instead of in bags in the branch; more transactions going to plastic; and increasing sophistication seen on all banks’ websites, “bankers’ hours” won’t have to expand further to meet the demands for convenience, in spite of the Commerce Banks of the industry.” In markets around the country, customer demands are changing – and traditional “bankers’ hours” aren’t going to cut it. Sure, we are seeing an increase in electronic banking; but we are not seeing increasing sophistication on ALL banks’ websites – and we certainly can’t be made to believe that electronic channels will replace some customers’ demands for convenient (i.e. before 9am, after 5pm and weekend) branch hours.

Electric Orange

“America's first all–electronic, paperless checking account is going to change the way you do your banking.”

Can a checking account really “change the way you do your banking”? This is precisely how ING Direct begins its description of Electric Orange, the institution’s recently launched checking product.

The account is positioned to target those who want a high interest checking account (4.00% - 5.30%, depending on the balance), and the conveniences of a sophisticated online experience and an extensive ATM network - ING has teamed up with the Allpoint Network to offer account users free access to over 32,000 ATM’s across the country. The account compliments ING Direct’s popular high yield savings accounts and is directly in-line with its strengths as an institution capable of delivering high rates, a great electronic experience and straightforward, easy to use products.

The account is definitely a departure from traditional checking accounts in that it encourages electronic check writing and bill pay as opposed to using paper checks and check books. It’s not surprising that this is the case given ING Direct’s online delivery focus and target market.

Electric Orange isn’t for everyone; it’s targeting those who don’t necessarily value the “benefits” of traditional checking accounts. ING recognizes that this target doesn’t necessarily value a free order of checks, or a checkbook at all for that matter; and as a result, they have created a product with a different, more focused value-added that can definitely change the way that its customers do their banking.

Keep It Simple

Today’s competitive landscape is changing; and as regional and national players become more aggressive in their marketing efforts, it’s time that you do the same. Marketing today’s financial institutions isn’t easy; but, in an industry where institutions continue to look more and more alike, and traditional “bank/credit union marketing” doesn’t work like it used to, marketing is more important than ever. Some institutions clearly understand the importance of marketing; however, many are employing reactive and unfocused strategies which often produce lackluster results and do little to add to the bottom line.

When it comes to your advertising campaign message, I suggest that you keep it simple.

Financial institutions are notorious for text-heavy, product-focused marketing that can seem random at times. Often times, these initiatives attempt to say too much, and can do more to confuse a customer than to encourage action and/or build a relationship. Today’s consumer is bombarded by as many as 3,000 advertising messages a day; and they want to know quite simply what’s in it for them – beyond the expected free checking account or great CD rate. So, rather than delivering a series of product-focused or rate-driven advertisements, complete with all the fine print, financial institutions can become more effective in marketing themselves by allowing one simple and compelling message to drive their efforts.

The first step in keeping it simple is letting go of the traditional financial services marketing mindset where every advertisement highlights the latest product or rate promotion. Sure, many customers want the latest products and the best rates, but no one has the time or patience to read every last detail about them in an advertisement. Keeping it simple is about communicating your unique value quickly in one powerful and easy to understand message.

Think of the messages used by Citi over the years: Live Richly; Where Money Lives; and the Citi Never Sleeps. Each of these messages is simple; none of them mentions a product or rate. Furthermore, each works to establish a deeper connection with the audience, beyond the latest product or rate promotion, and each was/is used as an organizing principal around which all marketing efforts were based.

The idea of keeping it simple can also make individual advertising and marketing efforts more cohesive when it is applied to an entire campaign, as opposed to just individual ads or marketing pieces. As mentioned in the Citi example, once your message is established, it should be used as an organizing principal that informs all of your marketing efforts.

Another great example of allowing one simple message to drive an entire marketing campaign is Harris Bank’s “We’re here to help” campaign. The message is simple and compelling. The advertisements that support the marketing campaign feature clever help tips and advice for the audience. The help tips include everything from driving directions to subway information; they do not discuss product details or rate promotions.

Consumers have been conditioned to expect text-heavy advertisements from financial institutions who offer the latest giveaways for opening new accounts and great home mortgage rates. Because of this, the audience tends to ignore these expected messages. Effective marketing in today’s marketplace demands that you communicate a simple but compelling message that can stand alone – without all the details and fine print.

How are you different from your competition?

Last Monday, I spoke at ACB’s Seminar for Presidents in Naples, Florida. I was impressed by the turn out of about 40 bank CEOs; especially considering that the session began at 7:00am. During the presentation, titled Profitable Growth Strategies, I stressed the importance of differentiation and leadership as viable strategies for growth, as opposed to the more traditional strategy of simply building branches.

Once again, I did not offer the non-existent “magic bullet” that most CEOs want, but, instead I challenged the attendees to assess their own leadership styles and how they communicate the differences between their institutions and the competition.

Most of the questions following the session revolved around the topic of differentiation. I was not surprised, as I pushed the audience to stop talking about themselves as the “local bank, with good service, and friendly people,” which is difficult for many bank executives. Instead, I asked them to think of three words that describe how their institution was truly different from the competition.

I would like to challenge you to do the same. What three words describe how your institution is truly different from your competition?

Would your customers and prospective customers agree?

2007 ABA NCCB - Question and Answer

During the ABA's National Conference for Community Bankers in Palm Desert last week, we received a number of questions from attendees specifically regarding differentiation and messaging (in addition to other topics). We thought it would be valuable to share some of these general questions with you, as well as our responses. Below is a summary of some of the things we were asked about.

Q - What’s the difference between how we view ourselves as different from the competition and how our customers perceive us as different from the competition?

A – The customers’ perception of how your bank is different is really the most important aspect of differentiation and can be tied directly to emotion in most cases. You know how your bank is different from your competitors, but if your customers don’t perceive your bank as different and can’t connect with you emotionally, than you really are no different. An example of creating this perception on the emotional side would be Bank of America’s “Bank of Opportunity” campaign. This campaign identifies America as the land of opportunity and says “fortunately it comes with a bank, Bank of America”. This helps create an emotional connection with customers and ties it directly to what Bank of America can offer them.

Q – Our market is fairly small, and we feel it is over-banked because there are a relatively large number of competitors within the market itself. How can we really measure whether the market is over-banked or not?

A – There are two primary ways to help identify whether your market is over banked or not. The first is to look at the quantifiable measures “households per branch” and “businesses per branch”. The more households and businesses that are available per branch location, the less competitive the market (generally speaking). The second is to examine how competitors are positioning themselves and which niches they are pursuing. It doesn’t matter if there are 10 banks or 20 banks in the market if yours is the only bank that is offering a specific product or service (i.e. lending to small business owners with low credit ratings). If you are serving a niche that no other bank in the market is serving than you will have less competition from the other banks. Likewise, if you are trying to offer the same services and serve the same niche as those 10 or 20 banks, then there may be little room for you in the market and it can be viewed as an “over-banked” market.

Q – We are not exactly sure what our competitive position (or niche) should be. Historically, we have not focused in one particular area over another, and we feel that we have always been good at serving our customers, no matter what the need. This being said, how do we identify our niche and begin to differentiate our institution?

A – In order to differentiate, institutions must communicate a message and deliver an experience other than “we are all things to all people.” This requires focusing on your target market, emphasizing your institution’s unique strengths and positioning yourself differently from the competition. While some institutions can easily identify and target a specific niche (i.e. Hispanic population, Generation Y, Doctors, etc.), many institutions simply can not narrow down their focus to one or two particular niche segments. It is important to take something that your institution does that is seemingly inconsequential, blow it out of proportion and turn it into wow. It may be inconsequential to you because you do it everyday, but it may just be that one factor that sets you apart from your competition. If you can identify it, embrace it and promote it then you can in fact differentiate your institution.

Q – How do we get our staff to “buy-in” to the changes we are trying to initiate, and the ways we are trying to differentiate our bank?

A – It all starts at the top. In Joe’s speech at the ABA's NCCB Conference in Palm Desert last week he talked about how leaders are not born, they are created. You can easily get your staff to “buy-in”, but it must start at the top. It is most important to get the leaders of your organization to first “buy-in” to your initiatives and truly believe in what the bank is trying to accomplish. Only then can this successfully trickle down to the other layers of the organization, including front-line staff. The reality, though, is that not everyone in your organization is going to buy-in to what you are trying to do, but those people will migrate out of the organization on their own if you create a culture where leadership is embraced. Specifically getting your staff involved and “buying-in” to your initiatives involves another key aspect of what Joe talked about during his speech; Passion. If you can awaken Passion among your staff, and then allow them to translate that Passion to their work, then it will create an environment where employees feel empowered and can “buy-in” to what you are trying to achieve. Little things like creating an innovation committee comprised of various employees from different levels of staff (even front-line tellers) can help your employees truly feel valued. Getting the staff involved and supporting them is the most important thing. It all comes down to the five key aspects of a leader that Joe discussed; Vision, Passion, Communication, Connection and Support.

Q – We are having a hard time finding something about our bank that is different and becoming frustrated in trying. What can we do to effectively identify and create our differentiation strategy?

A – Differentiation is not skin deep, it runs much deeper than that. Differentiation is the underlying foundation for the culture in your organization. To create a differentiation strategy, in essence, is to create a shift in the corporate culture or thinking. Every bank is different even if it may not appear so on the surface. Creating a successful differentiation strategy is to find the story behind the bank and the values it possesses, and every bank does have a story. The most seemingly inconsequential aspects of your bank are, in actuality, what truly make you different. Most importantly, though, to create a successful differentiation strategy you must truly WANT to be different. It’s about getting under the “skin” of your organization and uncovering your story.

If you have any further questions, or would like more more information about any of the questions listed above, please don't hesitate to call any of us here at Market Insights or visit our website at www.formarketinsights.com.

Bank of Opportunity

Bank of America is ready to elevate its marketing efforts. As reported by the Wall Street Journal yesterday, and confirmed in a press release issued by the Bank, B of A is adopting a new tagline, investing big money in advertising and pushing forward with its most aggressive marketing campaign to date. The theme of the campaign “Bank of Opportunity” definitely positions the Bank to appeal emotionally to customers and, as WSJ reports “The campaign underscores the company’s strategic need to squeeze more business from existing customers.”

The new tagline “Bank of Opportunity” will be introduced as the replacement of “Higher Standards” during television commercials that will run first during the Academy Awards on Sunday night. The campaign will take shape on Monday morning as representatives dressed in B of A red aprons will be passing out coffee vouchers to commuters in select markets; the vouchers will emphasize opportunity with the message “Wake Up to Opportunity.”

Perhaps the most interesting part of this new campaign is the fact that it shifts the focus back to the customer. “Higher Standards,” as discussed in the WSJ article, was more about how Bank of America conducted business, while “Bank of Opportunity” is clearly more focused on value-added to the customer.

This value-added message is an excellent example of how financial institutions, especially community institutions, must move away from talking about themselves only in terms of products or rates. The commoditization of financial products and services demands that institutions establish and cultivate an emotional relationship with their customers, which can ultimately support the development of customer loyalty. Bank of America has certainly built a strong physical presence in many markets across the country, and it will be interesting to see how this campaign is leveraged to maximize organic growth for the Bank.

Outside the Box: 2007’s National Conference for Community Bankers

I just returned from Palm Desert, California - where I participated as a speaker and exhibitor at the American Bankers Association’s National Conference for Community Bankers. While I have attended this conference many times in the past, this year’s theme was more interesting to me than most:

“Not Business as Usual: Community Banking Beyond the Box”

We have all heard the term: thinking outside the box – but what does that really mean to you and your financial institution?

I will tell you the same thing here that I said during my presentations at the conference: there are NO magic bullets when it comes to outside the box thinking. There is not one great universal idea that can be applied at any institution, and there are no easy buttons. Too many institutions fall into the trap of trying to copy other institutions’ successful outside the box initiatives, but just because another institution has achieved success from a certain initiative doesn’t mean that your institution can expect the same success as a result of implementing similar initiatives.

Furthermore, the industry is constantly changing to meet the demands of customers - and that which is considered outside the box today, will not be outside the box tomorrow. This constant change demands continuous attention and a commitment constant innovation. I spoke with several people who attended my presentation about my innovation committee idea. During my presentation, I suggested that some institutions could consider creating an innovation committee, composed of three energetic, young and creative individuals – with the responsibility of generating innovative ideas and encouraging other staff members to do the same. This is just one easy idea that could be considered outside the box at many institutions.

I would like to challenge you to do things differently – truly differently; because today’s most successful institutions are not those that continue to do business as usual. I bring you back to my examples of Starbucks, Whole Foods, Clif Bar and Trader Joes - these successful businesses have a story, their leaders have a story, and you can bet that they won’t let up in their quests for continual improvement – and neither should you.

I asked you for your questions during my presentations at the conference, and I intend to post my answers to those questions right here early next week. Please email me with any additional questions and feel free to share your comments about the conference.