Silverbulletitis

There’s a sickness that is running rampant like an uncontrolled virus in many of today’s businesses. It’s called silverbulletitis, which I define as:

A condition in which the sufferer expects easy answers and solutions to difficult problems.

I’m currently attending a financial services conference, and it’s easy to pick out the people who are suffering from this affliction. When they ask a question of a speaker, they ask about best practices. Or they furiously scribble down notes of what some other firm is successfully doing in its market with the expectation (hope?) that the practice will just as well for their own firms.

Let me make my opinion here very clear: There is no such thing as a best practice. A best practice is a fallacious concept. What works for a particular firm is dependent upon its:

1) Strategy. A firm that competes on cost (not necessarily price) will succeed by implementing practices designed to make its processes as cost efficient as possible — even if some level of service is compromised. But a firm that competes on providing superior levels of that particular service will fail miserably if it implements that practice.

2) Infrastructure. It never ceases to amaze me that someone will claim that a firm’s practice is a best practice without an assessment of the underlying technology assessment that supports that practice. A firm with a tightly integrated suite of ERP tools will be able to implement processes that a firm with a set of standalone, 30 year old apps could only dream of implementing.

3) Culture. Business practices don’t operate in a vacuum. A company’s culture and it’s reward/incentive mechanisms all impact the effectiveness of a business practice.

And this list goes on — the composition of the customer base, the current economic condition, the current financial condition of the firm, and so on.

To think that one firm’s practice is a best practice that can just be plopped in somewhere else — and succeed to the same level — is wishful thinking.

What’s sad here is the underlying mindset of silverbulletitis sufferers, who seem to think that there’s an easy answer to the tough problems their firms face. “If Net Promoter Score worked for them, then it it will work for us.” “The Young and Free Alberta campaign attracted many new members for Commonwealth CU, so I’m sure it will work for us.”

The reality is that there are no easy management answers in today’s complicated organizations and difficult business environment. And I said so in my presentation at the CUES Experience conference this week. I don’t think the message was well received.

Technorati Tags: Best Practices, CUES, Silverbulletitis

Speakers Wanted For [One Of] The World’s Best Credit Union Conference[s]

The two best credit union-related conferences in the world are the CUES Experience conference (being held this week in Minneapolis) and the Forum/Trabian Symposium, slated for October.

They’re not the best conferences because I’ll be there. I go there because they’re the best conferences.

The speaker roster for the Forum/Trabian conference is almost full (check out the current list here). There’s one speaking slot open — and it will be filled by whomever wins an video audition. To date, two entries have been submitted.

At the risk of ticking off the two entrants — Ginny Brady and Andy LaFlamme — I’m putting out this call to enlist more candidates.

It’s not that I wouldn’t love to see either of the two (or both) of them speaking at the conference. Instead, it’s because I know that there a lot of people in credit union land doing innovative things that the Symposium attendees would love to hear about and discuss.

And if you’re a vendor, look, you could spend $10k to secure a speaking slot at some CU conference that might attract 250-500 people who couldn’t care less about your presentation because they’re only at the conference because it’s at some fancy schmancy resort.

Or you could submit your audition video, and get a shot to present to 125-150 (or more, since this was last year’s attendance count) CU decision makers who go to the conference to learn, network, and share (not that Fishers, IN isn’t a fancy schmancy place to go). And it won’t cost you anything more than your travel costs.

You’ve got until the end of June to submit your audition tape. Actually, I don’t think you even need to submit it. Create it, put it up on your blog or on YouTube, and I’ll betcha $5 the folks at Forum or Trabian will hear about it one way or another.

C’mon! There are a few of you out there who I’m thinking should be submitting something here. Don’t make me call you out by name.

Technorati Tags: Credit Unions, Forum CU, Trabian

Apology To Trey Reeme

When you say something publicly, your comments are open to scrutiny, criticism, and disagreement from others. I most certainly do that to others, and I recognize that others have the right to — and will — do it to me.

But when you’re misquoted publicly, that statement is not fair game for scrutiny and critique.

And so I’d like to apologize to Trey Reeme. In a blog post from a few days ago, I took him to task for a statement that he allegedly made about replacing older credit union directors. It turns out he was misquoted.

Let me be clear about what I think my mistake was. It wasn’t that I didn’t validate that the quote was accurate. That was CU Times’ job. It was their responsibility to check with the people they’re quoting to ensure that they’re representing statements accurately.

No, my mistake was not checking with a friend before commenting on it. Not only should I have checked with Trey before publishing the post, but, in hindsight, I should have given him more credit from the start, and not even believed that he could have made those comments in the first place. But I didn’t, so I’m up to apology number two here.

I told Trey that if he wanted, I would pull the post from the blog. That certainly wouldn’t fix what happened, since the post is already out there, but it might save some future pain. Trey said he didn’t want me to take it down. Which I’m grateful for — because I do believe that the sentiment that he was accused of conveying really exists out there. But I will go back and edit the post to emphasize that aspect.

Technorati Tags: Credit Unions, Trey Reeme

Customer Stories Aren’t Created Equally

A recent Citi Card ad campaign focuses on customers’ stories. In one, a 20-something tells her story:

“I don’t cook. So I made my eat-in-kitchen a fabulous walk-in closet. Since I enjoy a day of shopping far more than cooking, I decided to do a bit of home remodeling. With my Citi card in hand, I set out to get some closet organizers. I bought a shoe rack for the oven, sweater boxes for the cupboards, and 12-inch baskets for handbags up above.”

The ad’s tagline is “whatever your story is, your Citi card can help you write it.” US Banker quotes a Citi exec as saying “Our hope is to get into the heart of the Citi cardholder’s head and make an emotional connection…we want people to select the Citi card because, in so doing, we can help them live a piece of their dream.”

My take: This is a step in the right direction (from a marketing perspective), but falls short of being effective.

Contrast the Citi customer story with this one about why a woman says she’s loyal to her bank:

“My partner and I had been trying to adopt a child for some time, when we received word from the adoption agency that a child was available for adoption — in China. But we needed a short term loan in order to make the trip. My bank bent over backwards to approve the loan and get us the money in 24 hours. For that, I will never leave them.”

Or this story:

“My ex-wife and I were going through a divorce and I called one of our financial providers to cancel a credit card and insurance policy we had with them. The rep on the phone said ‘I hope I’m not overstepping my boundaries, but if you’re going through a divorce, we have a whole department that can help with all the financial arrangements you need to make.’ To make a long story short, we were able to transition our accounts easily. For making it such a painless process, for being there when I needed them, and for figuring out that I needed help in the first place, I’ll never do business with another financial firm.”

Do you notice anything different in the stories I’ve related and the one that Citi tells in its ad?

Seth Godin wrote “marketing is the story marketers tell to consumers.” He’s wrong. Marketing is figuring out which stories you want customers to tell themselves. Stories that come from their personal experience and that strengthen their loyalty to the company, product, or brand. A story that a customer tells to herself (even subconscious stories) is the most important factor driving customer satisfaction and loyalty.

But not all stories are created equally. There are three important differences between the stories I re-told and the Citi story:

• An element of the unique. What exactly is so special about having the Citi card in this example? Answer: Nothing. In the story that Ms. WalkInCloset tells, you could pretty much tell that story substituting a Capital One, Amex, Discover, or any other credit card. But not every financial firm could have done what the firms in the other two stories did. For a story to become a “story that a loyal customer tells” it needs to be something that not just any financial firm could do.

• An element of the unexpected. A woman goes into a store, buys a shoe rack, uses her credit card to pay for it. Nothing out of the ordinary about that story. But getting approved for a loan — and getting the money — in 24 hours? Or having a call center rep figure out that there’s something deeper than just closing out a couple of accounts? You don’t expect that to happen. And it’s the unexpected that drives the most important customer stories.

• An element of the emotional. While it might be important to Ms. WalkInCloset that she is redoing her kitchen, buying a shoe rack or a sweater box doesn’t quite rise to the level of emotional content that needing money to travel to China to adopt a child, or getting through the stress of a divorce does. Citi is right in wanting to make an emotional connection, but it takes an emotional situation to develop an emotional bond (this doesn’t have to be a negative, or stressful situation — positive ones work well too).

Despite my critique, I give Citi credit for recognizing the importance of customer stories. That’s more than I can say for a lot of other financial firms who try to make an emotional connection by simply telling customers and prospects that they help customers achieve their dreams.

But the importance of these stories goes beyond the advertising. Think for a moment: How did the customer stories I re-told come about in the first place? By accident? No way.

In the first story, somebody at the bank in question — at some point in time, based on who knows what input or information — decided the bank should have the capability to process loan apps overnight. So when the need arose to process the loan in 24 hours, they were able to do so. And a satisfied customer had a story to tell.

At the firm in question in the second story, how did the rep know that the caller was going through a divorce? Because she went through one? Maybe, but doubtful. It was because that firm analyzed previous interactions where customers canceled multiple, unrelated products and it found a common thread: Divorce. They then trained call center reps to ask customers who called with a request to cancel multiple products that if there was extenuating circumstance like a divorce that was causing them to cancel the accounts.

The fact that these firms were able to do what they did, and that those actions led to stories that their loyal customers told was no accident. It was marketing.

Hat tip to CUNA’s YES CU blog.

Technorati Tags: Marketing, Banking, Financial Services, Citi Cards, CUNA

[Only Partially] Off-Topic: Customer Experience And Another Milestone Reached

Thirty years ago today I went to my first Grateful Dead concert. We drove the hour or so from Binghamton, NY to Syracuse and saw what could only be described as a nondescript, uneventful concert. About the only thing I remember from the show was Bob Weir coming out for the encore wearing a gorilla mask, which was appropriate since they played Warren Zevon’s Werewolves Of London.

Needless to say, it wasn’t my last Dead show. Thirty years later, despite the fact that the Grateful Dead haven’t existed as a band since 1995, I’m still as much as a Deadhead as I’ve ever been. My wife and kids certainly don’t understand. And, in fact, few non-Deadheads can really understand why Deadheads are as fiercely loyal and into it as they are.

It’s really simple, actually. It’s not just the music. It is (and was) the experience. If the Dead were a business (well, they were, and actually still are), you’d call it the customer experience. Going to a Dead show was an experience from the time you left your house till the time you got back. Which, of course, could be days (and for some people was weeks). All of today’s Web 2.0 talk about community only leaves me wanting to tell the Gen Yers who think they’re oh-so-community-minded that the Deadhead community has been going strong strong for more than 40 years now.

To be honest, I wasn’t really going to blog about this, but a blog post from Gene Blishen made me change my mind. Gene recently wrote about BarCampBanks, and had this to say:

“The format and the way the event is held is unique and it contributes a lot to its success. No one owns the agenda. Relationships have already been created through Internet means (blogs and Twitter). Meeting people face to face after you have know them online is a phenomenal experience. But each one that I have attended is unique. And I keep trying to nail down what makes it so. Maybe it is because we don’t really have such a strong expectation of what will come from the event. We already know that will happen. he expectation is the excitement of the discussions, the passion shown by everyone, the energy in just being in a room with such remarkable people. We thought we came seeking a holy grail but found that each of us had the capacity to create something unique in our relationships and our being together for this short time. The time you have is limited and you want to make the most of it. BarCamps cannot really be explained.”

I read that and thought “oh my god, BarCampBank meetings are just like Grateful Dead concerts. All about the experience. And completely inexplicable as to why the experience is so satisfying.”

Now when I do blog about something like this, I always start the blog title with “Off-Topic.” I’m sure you noticed that the title of this post starts with “[Only Partially] Off-Topic.” Here’s why:

There’s an important lesson for marketers in mine and Gene’s stories. Specifically about how to think about customer experience. There’s a paradox that few marketers really grasp. While the customer experience is the most important thing to customer satisfaction and loyalty, you cannot over-engineer, over-design or over-control that experience.

You have to establish a framework, some guidelines, and then just let it happen.

The Dead didn’t — and in reality, couldn’t — control every aspect, or even a fraction of the aspects that made up the Deadhead experience. They let their fans freely record and distribute tapes of their concerts, which helped engender an intensely loyal following. But they did (wisely) retain control of ticket sales and protected the sale of their merchandise. But you were free to sell food, stuff you made, and tons of other things to the tens of thousands of other Deadheads who showed up at every show. But you couldn’t sell their copyrighted merchandise, and contrary to popular belief, the strongly discouraged the sale (not the use) of illegal substances in and around their concerts, because they knew that that would hurt the potential for future concert opportunities at that venue.

Gene alludes to the same notion about BarCampBanks. There’s little structure, no pre-set agenda. But there is an expectation that participants will be able to contribute to the agenda and the discussion. That’s the framework. It’s like color-by-numbers. Here’s the guidelines — you provide the rest.

Marketers are right to obsess about customer experience. Unfortunately, too many equate it simply to Web site design. Or come up with consultantese titles like customer experience management, which they define as “capturing and distributing what a customer thinks about a company.” (Huh?)

It’s as if there’s a spectrum. At one of the spectrum is chaos — the absence of any controls, guidelines, or predefined experience elements. At the other end of the spectrum is the complete design and over-specification of the experience. The trick is finding the middle point.

Also unfortunate is the fact that there’s no simple way to find that middle point. With the “one ultimate question” mentality that exists, too many managers are in search of some simple holy grail that makes their job easy and their companies widely successful.

It doesn’t work that way. Just ask the Grateful Dead.

Technorati Tags: Banking, BarCampBank, Grateful Dead, Gene Blishen

Credit Unions: Who’s On Your Board Of Directors?

A recent article in CU Times claims that Trey Reeme of Texas Dow Employees CU in Lake Jackson, TX suggested that:

“60-plus-year old directors looking at the industry’s future should seriously consider stepping down to make way for a generation more connected to new technology.”

My take: This is a ridiculous recommendation, and a careless remark (if quoted accurately). Not to mention age discrimination, but I’m not here to argue about the legal aspects of replacing the 60-somethings on your board of directors.

There are two things that wrankle me about the statement. The first is the implicit assumption that just because someone is 60-ish that they don’t “get it.” Hogwash (not my first choice of words).

In the past year or so, I’ve had the opportunity to get to know Gene Blishen, GM of Mt. Lehman CU in Canada. Gene is a Twitter friend, we share comments on our respective blogs, and we’ve met in person a couple of times. I don’t think Gene is 60 (yet), but he’s close enough for our discussion (sorry, Gene).

So, Trey, let me ask you something: Should a guy who blogs, Twitters, runs a Mac-only CU, attends BarCampBank meetings, and spends a month in Denmark, seriously consider stepping down?

And what about Ginny Brady, who’s on the board of directors at UFirst CU in upstate NY? Ginny blogs, twitters, and attends BarCampBank meetings too. Oh wait — it’s OK for her to stay on the board because she’s a woman, right?

The second problem is the implicit assumption that putting a Gen Yer on the board somehow creates “representation” of the technology-connected generation. The problem here, Trey, is what marketers call belly-button research: Taking a sample of one — yourself — and projecting out to the broader population.

So exactly which Gen Yer should a CU put on its board? The problem is, putting anyone person — Gen Yer, woman, Hispanic, etc. — and expecting that that person will “represent” the group they come from is wishful and fallacious thinking.

As much as Trey — and apparently some of my other Twitter friends who chimed in yesterday — think the problem is rooted in too many 60-year-old white guys on the boards of CUs, that’s not the root of the problem (it is a problem, just not the cause).

The root of the problem was hinted at in a recent post on the CU Warrior blog. Writing about a 29 year-old friend of his who’s up for a CU CEO position, the CU Warrior wrote:

“Don’t hire based on age. Hire based on an individual’s ability to move your financial institution in the direction the Board desires. And if your Board doesn’t have that vision, that direction, your needs run deeper than just a vacant CEO position.”

And therein lies the problem with the composition of many CU boards. They didn’t start with a vision of what the board was supposed to accomplish, and what the right set of skills of were to fulfill those goals and vision. And so a bunch of people were chosen — among the few who volunteered — who supposedly “represented” the CU’s membership.

Bottom line: Replacing the 60-somethings on CU boards with 20-somethings is not necessarily the right move. It could be, but it’s more about finding the right Gen Yer — not just any Gen Yer. And replacing the wrong 60-somethings — not the ones making strong contributions to the CU. But it’s got to start with the CEO and chairperson of the board rethinking the purpose, goals, and vision of the board and the CU.

Disclaimer: As I wrote this, I couldn’t help but think that the article might very well have misrepresented Trey’s true thoughts and words. Apologies to Trey if that was the case. But even if that were so, it wouldn’t change the sentiments of this blog post.

UPDATE: Please see this post on Trey’s site for a clarification of what transpired between him and the CU Times reporter.

Technorati Tags: Credit Unions

Announcing The First Annual Crabby Awards (Part I)

In case you missed it, the annual Webby awards were announced recently, and once again I’m left with the same thought I’m left with every year: “HUH?!@# What the hell were they thinking?!@#.” To rectify matters, I’m pleased to announce the winners of the first annual Crabby awards, honoring the sites that should have been honored.

Winner in the Makes A Contribution To Society category: SpareChange.com

The judging panel for the Crabbies was recently in San Francisco, and saddened by the number of homeless people begging for change on the streets. With summer rapidly approaching in SF, you know what this means: It’s going to get too cold for the homeless to stay out in the streets.

This is where SpareChange.com comes in.

You know those annoying intercept pages that you’re forced to put up with when logging in to your financial accounts so your bank or brokerage can hit you with yet another unwanted offer? SpareChange.com uses that technology to solicit offers for your spare change for the homeless.

Here’s how it works: Similar to staking out specific street corners to ask for your spare change,”Spare Change Collection Specialists” register with SpareChange.com to claim specific Web sites. Using technology from Google, the specialists bid on specific sites in an auction style manner. When you donate your spare change, SpareChange.com transfers the money from the account of your choice to the specialist’s PayPal account.

Winner in the Makes Life Better category: Don’tChangeAG*dDamnedThing.ca

The good folks at VanCity credit union in Vancouver were nominated for a Webby for their ChangeEverything.ca site. No offense intended, but it’s no surprise to me that they didn’t win. By the Crabbies judging panel’s estimates, there are 80 million in North America that don’t want you (or anyone else) to change a g*d damned thing. As one judge put it, “I’ve worked my ass off for the past 30 years to get things the way they are — that is, the way I want them to be — and now you want to come along and change everything? NFW!”

Enter Don’tChangeAG*dDamnedThing.ca.

Using The Wayback Machine, users of Don’tChangeAG*dDamnedThing.ca register their desired sites, specify a point in time in the past, and then the next time they visit that site, the see it THE WAY IT WAS AT THAT POINT IN TIME.

For example — going back to the SpareChange.com example of intercept pages at bank sites — if you no longer want to be bothered by these pages when you access your bank account, simply register your bank’s site at Don’tChangeAG*dDamnedThing.ca, pick a date before the intercept pages were implemented, and VOILA! The next time you log in, you won’t see these annoying pages.

Personally, I’ve registered wordpress.com. This way, when I go to the admin pages for my blog, I no longer have to deal with the cockamamie changes that the wordpress people have put me through over the past few months, with their interface changes, and ridiculous pop-ups when someone mouses over a link on a blog post, or these completely irrelevant links that all of a sudden showed up on my blog posts.

Winner in the Only Social Network We Need category: No_One.com

No_One is actually an acronym that stands for Network Of One. No_One.com looks suspiciously like Facebook but with one major difference: You can’t access anybody else’s page, and no one can access your page. Hence, the “network of one.” Finally, no annoying jerks “writing on your wall”, inviting you to stupid groups, or “poking” you. The social network for the 80 million Crankys who just want to be left alone.

Well, there you have it, the winners of the first annual Crabby awards, part one. Stay tuned for part two.

Technorati Tags: Webby Awards

Notes From FinovateStartup 2008

Congrats to Jim Bruene from NetBanker. FinovateStartup attracted a great group of attendees (including representatives from financial services firms, analysts, bloggers, consultants, and vendors), the venue was good, and the format was refreshingly different.

While the presenters represented a wide range of firms, they did fall into a few broad groups, including:

Mobile finance. There were five firms offering mobile finance applications (one of them, Bling Nation, gets my vote for best name of the day).

My take: I’m no expert in mobile technology, so I won’t comment on the quality of their technology.

But I do study consumer behavior, so I will say this: Who needs this stuff?

One presenter’s use case was a consumer paying a utility bill with a cell phone. Let’s back up a second — how many people get their utility bill on their cell phone? Right, nobody. So what’s the scenario for why this would happen? Must be somebody walking down the street and thinking “Holy crap! I forgot to pay my utility bill and now they’re going to turn off my heat! Oh, good thing I’ve my handy dandy cell phone with mobile finance capabilities in my pocket. I’ll just push a few buttons, and….phew. Bill paid.”

Another presenter used his cell phone to send $100 to himself, and convert those dollars to euros. Oh great, not only another once-in-a-millenium example, but one that hurts the economy by moving dollars out of the economy.

A lot of this mobile finance — as it relates to retail, consumer-focused applications — is technology for the sake of technology. Yes, people would like to check their account balances, or move funds from one account to another with a cell phone from time to time. But guess what? They can do that today. It’s called the IVR. And I’d be willing to bet that you press fewer keys with the IVR than the mobile finance app.

I do believe, though, that the potential for mobile payments is very real. But it’s not about paying bills.

Social lending. Six firms in this space presented — two specializing in student loans (GreenNote and Simple Tuition), two of them general peer-to-peer lenders (Prosper and Loanio). In addition, there was Wonga (as in “I’m tired, and I wonga home now”), which is, as best as I can tell, a payday lender (fyi, the picture that the presenter displayed of himself standing in a UK sex shop was priceless). And then there was Zopa, which you better not refer to as a peer-to-peer lender or the Zopa CEO will come beat you up.

My take: GreenNote’s approach left me baffled. A student adds “lenders” and then GreenNote sends out “pledge requests” to raise funds. HUH? Why would I need GreenNote to send emails to people I already know? Who asks other people to fund their (or their kid’s) college education? All I can say is nobody I know better ask me to fund their kid’s college education. How awkward would that be? And why wouldn’t someone looking for funds just use a general site like Prosper?

The winner in this category — and, in fact, one of the best-in-show winners — was Zopa. Personally, I think Zopa has the model that will ultimately prove to be the winner in this space. Why? Because, unlike the other firms, Zopa doesn’t disintermediate existing FIs. It’s win-win-win — for FIs, consumers, and Zopa. I think a lot of consumers — both on the borrowing and lending sides — will be drawn to Zopa than to other social lending platforms.

PFMs. Four firms representing this category. Congrats to Jwaala for winning one of the best-of-show awards, to Jason Knight from Wesabe who used the birth of his son on Monday as an excuse for not coming to the conference, and to the guys from Expensr for selling their firm to MyStrands.

My take: Some of these PFM tools are like Christmas presents. You love it when you first open it up, you play with it ALL day, and then a week later you don’t ever touch it again.

I believe that there are two critical success factors for apps in this category: 1) Integration with existing online banking and bill pay, and 2) community-driven advice and guidance.

Seeing how your supermarket spending compares to people in Seattle is interesting — once. A patent to categorize my spending at McDonald’s as restaurant spending? Nice, but hardly critical to the long-term success of PFM.

When my colleagues and I spoke to Mint’s CEO a couple of weeks ago, he stated his belief that Wesabe was for the hardcore PFM enthusiasts, and that Mint was for everybody else. Why? Because Mint made it so easy to link accounts.

He’s got it backwards. Who gives their IDs and passwords to firms like Mint and Yodlee? Who spends hours a day or week analyzing their spending trends and comparing those trends with people in theirs and other cities? The hardcore PFM enthusiasts, that’s who.

Mint has indeed made it easier for the folks who are (or were) using Quicken and MS Money to do what they were doing. No doubt about it. But the vast majority of people in the US just don’t care to, nor want to, spend that much time managing their money and expenses. Yes, money is very very important to all of us, but that doesn’t mean we spend that much time tracking and analyzing it.

It’s not numbers people are looking for. It’s words. Words in the form of advice and guidance on how to save a few bucks, on where the good deals, and on who provides good service and prices, and who doesn’t.

Its CEO claims that Mint is “now the leader in free PFM apps.” Maybe for now. But the race has hardly begun. If you combined Mint’s interface/functionality with Wesabe’s community and went to market with Jwaala’s private-label approach, I’d sing your praises at the top of my lungs.

Investment analysis/planning. By my count, there were eight firms that fell into this category, including Boulevard R, Zecco, Cake Financial, Motley Fool CAPS, Invesra, Money Pools, Trade King, and Vestopia.

My take: It was back to the future for me. All the gee whiz bang stock and portfolio analysis capabilities, drill down, charts, graphs, whee! Been there, done that. I get 95% of this already with my current providers. The 5% I don’t get? The so-called social networks.

That was the big twist — you don’t just get to analyze your portfolio, everybody else gets to see what a loser of an investor you are. Of course, you get to see what losers they are to. Couldn’t help but wonder how many people are still day trading (or even investing in individual stocks) that need this level of analysis and community.

One example given was particularly memorable. The speaker showed how you can buy shares of Visa on his site, and then ask the community if it was a good idea. Note to speaker: Most of us find out if buying Visa shares is a good idea BEFORE we place the trade.

I’ll tell you who I’ll be watching in this space: Boulevard R. While they offer an assessment approach not too unlike the Wells Fargo and ING approach I criticized here, what distinguishes Boulevard R’s approach from the big firms was the apparent level of detail in the plan that’s produced (I say apparent because they flipped through the screens too quickly, which was understandable given the time constraints).

There are three key questions that remain to be answered that will determine Boulevard R’s success: 1) Is the plan that’s produced of sufficient quality and detail? 2) Will consumers pony up the money for the plan? 3) Will an existing bank/brokerage come in and offer a better or comparable product?

——

Overall, do I sound critical? Maybe. I’m definitely a skeptic when it comes to a lot of this stuff. I don’t even remember the names of 90% of the firms I spoke to back in the 1998-2000 timeframe that had similar ideas but aren’t around anymore to remind me of their name.

The ironic thing is that my skepticism about the long term viability of some (many?) of the firms doesn’t diminish my perception of the value of the conference. The ability to get so much information in one shot — and still have ample time for networking — was amazing.

Thanks again to Jim and Eric for having me there, and congrats to them for producing a great event. I hope they’ll let me come to the one in NY later in the year (this blog post may hurt my chances if potential presenters read it).

Technorati Tags: Banking, Finovate

More Fodder For The Branches Versus Online Channel Discussion

Everywhere I turn, I keep reading things like this from Vernon Hill, former CEO of Commerce Bank:

The bank branch is the cornerstone, not the millstone, of retail banking. The point of a bank branch is to reflect your brand and to open new relationships. How do you build a relationship with a machine?”

But now, along comes a new study from ForeSee Results that found that:

Customer satisfaction with online banking sites has risen significantly over the past five years. This year, the index registered a score of 82 out of 100 for online banking, up 12 percent, or 9 points, from a score of 73 in 2003. The reading of 82 was higher than customers gave banks overall — 78 in 2007 — suggesting they are more pleased with banks’ online operations than with branches and call centers.” (emphasis added by me)

Now before you dismiss this study because it focuses on satisfaction, and not net promoter score, the survey did show that highly satisfied online banking customers are 31% more likely to buy additional services from the bank and 54% more likely to recommend the bank to others.

My take: The Foresee study furthers my belief that, increasingly, great in-branch customer service is becoming less important to consumers. Consumers want to do bank with firms that don’t force them into needing customer service in the first place. If you don’t screw up, customers don’t need to talk to anybody — and are happier.

Meanwhile, the online channel is becoming the new front-line for customer support. The branch and the call center are the second line of support — the back up in case the online channel fails or doesn’t offer service functionality for a particular issue.

But that doesn’t diminish the importance of the branch and call center nor raise the importance of the online channel.

On a call with some folks from a large bank today, one of the participants said “online banking is a profit drain. It offers cost savings potential, but it’s still a cost center. It’s a necessary evil, a cost of doing business.”

Well, sure, it’s a “cost” center since no one buys “online” services — they buy products like checking accounts, savings accounts, loans, investment, etc., and possibly interacts with those products, and gets service for them, through the online channel.

What it means: All points of service delivery are cost centers, not profit centers. Claiming that one point of delivery is the “cornerstone” of the relationship — in general — is absolutely ridiculous, since different channels are more important to different customers.

What’s missing in most banks is: 1) a measurement infrastructure that captures the relative influence of channels on sales, and the combination of the channels and marketing efforts (advertising, direct mail, email) impacts sales, and 2) an integrated approach to service delivery that optimizes investments across channels.

It’s hard enough to do these things — but nearly impossible when senior managers cling to the outdated notion that the branch is the cornerstone of the relationship.

Technorati Tags: Banking, ForeSee Results, Vernon Hill

Choose Your Enemies Carefully

In a great post on his blog, Jeff Larche wrote:

I tell the students how fortunate they are to be born in a time when other revolutionary technologies are emerging (which, together, become a sort of digital connectedness). They, and I, are part of a exciting adventure.”

Jeff goes on to quote Gord Hotchkiss, who wrote on MediaPost’s Search Insider column:

We’re building a new world up as we go. At any given moment, hundreds of millions of us are making it up as we go along. It’s a Darwinian experiment on a grand, grand scale.”

Excellent quotes. But I can’t help but feel that there’s a short-sightedness lurking in those statements. A short-sightedness that doesn’t recognize that practically every generation that came before the one they speak of felt the same adventure, optimism, and desire for change:

• In the early 80s, it was the promise of how personal computing technology would democratize the world and change the way we worked.

• In the Sixties, it was the hippies who revolted against the robotic homogeneity of the 50s, the Vietnam War, and fought for how we viewed racial, gender, and um, sexual relations.

• In the mid-Forties, it was the optimism of rebuilding the country after WWII.

• In the 1800s, it was the adventure of rebuilding the country after the Civil War.

• And in the late 1700s, it was building a new country in the first place.

Each step of the way, each generation faced it’s own adventures, and made it up as they went along. The technologies and tools each generation have to work with are different, but the adventure, the optimism, and the desire for change is there, nonetheless. To insinuate that today’s young people are facing an adventure that other generations didn’t is short-sighted.

But what I’m interested to find out is not just what Gen Yers will do with their adventure, but who they’ll choose as their enemies. Because every revolution chooses — and needs — an enemy.

This is what worries me about Obama. He’s aligned with the Rev. Wright, who seems to believe that the government and white people are the enemy. And with Bill Ayres, who, in the 70s, decided it was our own government who was the enemy, and bombed the Pentagon.

There’s a saying “keep you friends close and your enemies closer.” There’s a corollary: “Choose your friends wisely, but choose your enemies even more carefully.” Who you choose as your enemies defines you. And your friends’ enemies can be construed to be your enemies.

And so I’ll be watching to see who today’s Gen Yers choose as their enemies. If they decide it’s us Boomers, they’ll be making a huge mistake. The social consciousness that so many Gen Yers believe defines their generation is borne of the seeds planted by today’s Boomers (double entendre intended). We are not the enemy. We want many of the same changes they want — we just failed in making those changes come about.

But this isn’t just a rant about Obama and Gen Yers. There’s an important business message here as well: A company (or association, or even an industry) needs to choose its enemy carefully, as well.

Who you choose as your enemy doesn’t just define you — it defines your strategy and tactics.

A few years back, during the dot com boom, I worked for Forrester Research. Our battle cry was: “Beat Jupiter.” (Jupiter Research). It was a good enemy, because Jupiter was successful and growing, and it focused us on the right things. But when the dot com boom ended, Jupiter was no longer the right enemy (they were still a competitor, but not the enemy).

Today, in the financial services industry, I fear that many credit unions (and the affiliated associations) have not decided which enemy (or enemies) they want to fight, or have picked the wrong enemy.

The “little guy” persona that the credit union industry takes on is indicative of this. It implies that the “big bad banks” are the enemy. Well, I’m not so sure about that. When I look at the performance of the retail lines of business of the big banks, I don’t see healthy, thriving organizations.

A “good” enemy is one worth fighting against. The US could decide to declare war on Costa Rica, and fight and win (maybe). But what would good what that do? It’s the same in business. You want to fight against the “right enemy” — the one worth fighting against.

Now, I can just hear some credit union execs saying “You’re right, it’s not the big banks we need to fight against. We need to fight against become irrelevant. Irrelevance is our enemy.”

Sorry. That’s not good either. How will you know when you win? How will you know when “they’ve” lost? Your enemy needs to be something tangible, not conceptual.

I don’t know the right answer here. If I did, I could probably make millions selling the answer to credit unions. But today’s financial services firms — not just credit unions — need to better understand who their enemy is. As do today’s Gen Yers.

Technorati Tags: Banking, Financial Services