Financial Services Marketers Could Use A Beer

At the CUES Experience conference in Minneapolis this past week, conference attendees went offsite to visit firms with a reputation for delivering a great customer experience. I went on the tour of Summit Brewing in St. Paul.

No, I didn’t go just to sample the beer (I’ll keep telling myself that until I really believe it).

Founded in 1986, the brewery has cultivated a loyal following. It’s strategy and philosophy should resonate with financial services executives. Here are some of the comments from Summit CEO Mark Stutrud which resonated with me:

“We’re selfish — we only make what we like.” Stutrud takes pride in repeating his firm’s slogan: We only brew what we love to drink. Whatever’s left over, we sell.” There was a subtle message here that is quite subversive in today’s marketing world. With all the focus today on “voice of the customer” programs, Stutrud seems to be saying that he doesn’t listen to his retail customers. But that’s a wrong interpretation. Stutrud stresses his firms efforts to “be on the streets.” His staff spends a lot of time out in pubs talking to bar owners, bartenders, and end customers about how Summit’s beers.

Instead, the comment refers more to Summit’s adamant refusal to produce a lite beer — regardless of how many customers ask for it. He says it wouldn’t fit with Summit’s strategy or philosophy. I can’t help but wonder how many FIs have the clarity of strategic direction to make that kind of decision.

“We had to overcome the perception that local beer isn’t good.” Stutrud talked about the perception that existed in the market when he started the brewery that imported beers were better than domestic beers, and the [mistaken] impression that the big national brands had a higher quality product than the few smaller, microbreweries that existed.

Stutrud gives Jim Koch of Samuel Adams credit for the success of its ad campaigns that showed off the foreign awards it won, helping to change long-held perceptions about domestic beers. And Stutrud educated the group on how the very nature of brewing a more flavorful beer means that the shelf life of that beer is very short — in effect, showing that the big national brands can’t be higher quality.

The connection to financial services is perhaps the reverse. Smaller banks and CUs have long tried to show that smaller is better — that they’re able to provide better, more personalized service that bigger banks. But not every customer or prospect wants that. Smaller FIs still have work to do to prove to certain segments of customers that they can provide high quality advice and guidance, and a high level of operational effectiveness that larger firms may be perceived to provide.

“We look for people who are passionate about the product.” The people that Stutrud was alluding to were both employees and customers. There aren’t a lot of people working at Summit, and Stutrud wants people who do work there to not only be good at their job, but into the product. And it’s the same with the et of customers Summit tries to attract. In Stutrud’s words, it’s people with that “pub/beer culture.” It reminds of REI, where the folks who work there are not just knowledgeable about the products, but avid participants in the sports and activities those products represent. And it seems like I every time I go into my local REI store, I feel like I’m not worthy to be there, since all the other customers are accomplished hikers, snowshoers, or bikers.

Contrast that with your typical financial services firms. First off, walk into pretty much any bank branch and you’re lucky if you speak with someone who has more than four hours training on any particular product, or any knowledge of what the competitors’ products or rates are. On the customer side, the Summit lesson is something most FIs simply do not get. To engender strong loyalty to a bank or credit union, it takes customers who are deeply involved in the management of their financial lives. Nobody is going to care about your bank or credit union if they don’t first care about financial products and services.

Bottom line: Summit’s story offers lessons for FIs regarding strategic direction and commitment.

Final note: I hope that anybody that reads this post is sufficiently impressed that I recalled all this despite the glasses of Extra Pale Ale, Extra Special Bitter, and Porter that I tried.

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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.

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[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.

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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.

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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:

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 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? 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 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, transfers the money from the account of your choice to the specialist’s PayPal account.

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

The good folks at VanCity credit union in Vancouver were nominated for a Webby for their 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*

Using The Wayback Machine, users of Don’tChangeAG* 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 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*, 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 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 is actually an acronym that stands for Network Of One. 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.

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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.

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).

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Glimpses Into BarCampBank New England

I don’t want to say that these are the “highlights” of BCBNE, because it might imply that I think that something I don’t include here wasn’t good. Not the case. I hope other attendees will fill in the gaps that I leave open with this post. For me, the day was a glimpse into:

1. Credit unions’ past. I don’t work for a CU and I don’t even belong to a CU. By all rights, I should have been bored to tears by the tour of America’s Credit Union Museum, where BCBNE was held. Not the case. It was inspiring. First of all, you have to understand that the museum is located in the building where the first US credit union was established. So when Peggy Powell, the museum’s director, took us to the front hallway and told us we were standing on the spot where children who worked across the river at the mill (which we could see) would come and deposit the nickels they had earned, it was truly inspiring.

There’s a lesson in there for how firms should train new employees to give them a sense of the history of the firm they’re joining. Think how much more powerful it would for someone to hear “you’re sitting at the desk of the person who wrote the first loan for this bank in 1934” versus “in 1934, the bank issued its first loan….”

2. Credit unions’ future. I’ve been reading Andy LaFlamme’s CULoop blog for a number of months now, and Twittering with him as well. I’ve shared this with some colleagues at work, and we’re astonished by his: 1) Writing ability (how dare he write so well for someone at his age and with his experience), and 2) Ability to Twitter while working on the teller line. Well, it turns out, Maine SCU kicked Andy upstairs into a marketing-related role to experiment with new approaches to collaboration and the use of technology. At the BCBNE session, Andy led a brainstorming discussion about how to engender more collaboration across credit unions.

I have no idea how to characterize David Inverarity’s presentation. The word that comes to mind is “tour-de-force.” Yes, he told us about how he helped to set up so his CU’s members could see YouTube videos of the CU’s board of director candidates. But that seemed incidental to the point of how he was innovating at his CU, which is at a critical juncture of its history (I realize that you may be thinking “what CU isn’t at a critical juncture of its history” — fair enough). It was also, for me, a rare glimpse into how one man manages his Mac. I’ve never seen more windows and tabs open at one time.

The more important point, though, is that I was left with a glimpse into what future CU leadership might look like. There’s no doubt in my mind that both these guys could be the CEO of their CU someday.

3. Credit unions’ current challenges. No offense to everyone else, but when I want to learn about what it’s like to run a credit union, there’s no one I learn more from than Gene Blishen. Between his comments throughout the day, and what I’ve gleaned from reading his blog for the past year, I’ve come to two conclusions: 1) this guy knows how to lead a credit union, and 2) the people who work for Gene are really, really lucky.

4. How group-led discussion should work. One of the reasons I was looking forward to attending a BarCamp is my growing dissatisfaction with “traditional” conferences. Most speakers suck, the questions asked are often irrelevant, and the events are often simply not worth the time.

Not the case with BCBNE. Great discussion, with broad participation from a number of people, on Facebook, blogging, connecting with members, marketing in general….back to Facebook…other points raised…back to blogging…etc. Christian Mullins started a discussion about trends in CU mergers, and presented a cogent analysis of the mistakes common in many mergers. Dave DelVechio teed up some of the top IT trends and priorities facing financial services firms. The conversations went where the conversations went. It felt right to me — I can only hope it felt right to everyone else.

6. Rock Band. Before yesterday I was on the list of people who never played Guitar Hero or Rock Band. Thanks to Morriss Partee, that’s no longer the case. In fact, on the second song I played, I BEAT both Morriss and Andy! I’m sure that those two sore losers will be quick to point out that I was playing the “easy” level, but I’m pretty sure that we had agreed that that was the handicap I was getting for being so much older than the two of them.

7. What a great dinner should be. OK, technically, this wasn’t really part of BCBNE. But the food was great, the restaurant had Macallen scotch, and it was definitely a treat to have dinner with Andy, Morriss, Gene, Christian, and David. Six bloggers at one table. Five of them associated with credit unions. Two from Canada. Two living in Maine. And one who managed to use the word “shrinkage” in the course of conversation. I think that’s when I had to leave.


For what my thanks are worth, I’d really like to thank Morriss for all his work in organizing BCBNE. Heaven knows it never would have happened if it were left to me to organize, so I really really appreciate the efforts of those who put it together. Thanks Morriss. I’d also like to thank Peggy Powell at America’s Credit Union Museum. The museum isn’t open on Saturday, but she opened it for us, gave us a tour, and let us hang out all day there.

I’ve got one more comment to make, this one directed to the person who questioned the ROI of these BarCampBank sessions on the Open Source CU site. Man, you just don’t get it. How do you put a price tag on something that inspires, rejuvenates, and motivates you? As Mastercard says, it’s priceless.

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Fun With Numbers

As reported in Direct magazine (which I’m sure has no vested interest), the Direct Marketing Association released a report which found that, in 2007, US banks and credit institutions spent $13.4 billion on direct marketing advertising, and [allegedly] generated $178.8 billion in sales on that investment.

My trusty, handy-dandy, Windows XP-supplied calculator tells me that that’s $13.34 in sales for every dollar spent on direct marketing.

Upon seeing this ROI, two questions immediately came to mind:

  1. Is $13.34 in sales per dollar invested good? In other words, without a point of reference — specifically, the ROI on TV, print, or radio advertising — how do we know if $13.34 is good or not?
  2. How do they know what the ROI is in the first place?

Relying on some data collected as part of research I’ve done in the past, I can tell you this: About two-thirds of financial services firms surveyed said that, of their “traditional” budget (i.e., direct mail, TV, radio, print), less than 40% of it went to direct mail.

So here’s my [first] point: Unless the return on spending on TV, radio, print, etc. is greater than $13.34 per dollar spent, then financial services firms are under-investing in direct mail.


OK, now that you’ve stopped laughing, have dried the tears from your eyes, and can focus again, let’s turn our attention to my second question.

Also using the same survey data source, I can tell you that when asked what kind of lift they have seen from their cross-channel marketing efforts, one in four financial services firms said that they didn’t know, and an additional 14% said they don’t measure it.

Now I realize this is not an apples-to-apples comparison, since the question was about cross-channel efforts, not just single channel efforts. But what it implies to me is that many financial services are not — or can not — measure the return on their marketing investments.

So here’s my [second] point: How in the world do they know that their direct marketing efforts returned $13.34 in revenue per dollar invested?

The report from DMA follows other reports from other sources that claim that [fill-in-the-blank-with-your-favorite-channel-or-marketing-approach] has the highest ROI on marketing dollar invested.

Unfortunately, all this ROI posturing is useless to marketers. Even if email or social networking had a higher ROI than direct mail, so what? The reality is that you can’t put all your marketing dollars into email or social networking.

Bottom line: What will differentiate the marketing winners from the marketing losers over the next few years will be the ability to figure out how to allocate — and optimize — marketing investments across channels and media.

p.s. I’m currently conducting research into what financial services firms are doing from a customer/marketing analytics, modeling, and measurement perspective. If you’d like to participate in the research (which would involve spending 10-15 minutes to complete a spreadsheet-based survey) please email me at the email address on the About page. You’ll get a copy of the report when it’s done, of course. No FI is too big or small to participate.

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Retirement Planning Marketing Suffers From The Blepfard Effect

Think back, for a moment, to when blepfards were introduced. Remember what they felt like in your hands? Remember what they felt like next to your skin?

Of course you don’t. Blepfards don’t exist. And because they don’t exist, trying to imagine what it’s like to hold it and feel it is a fruitless effort.

This is what I call the blepfard effect:

Asking people to imagine a situation, a state of mind, or something that they can’t possibly imagine because they have no basis of experience to do so.

Today’s retirement planning marketing efforts suffer from the blepfard effect.

For good examples, go to ING’s or to Wells Fargo’s Retire Secure Index sites. What they have in common: Answer six simple questions about your finances and retirement expectations, and VOILA!, these sites will tell you if you have enough money to last you your retirement years, and they may even produce a “personalized retirement plan” (oooh!).

Problem is, it’s just not that simple.

Asking someone who is ten, fifteen, or even just five years away from retirement to imagine what kind of retirement lifestyle they want, how much they’ll need to live on, etc. is a fruitless effort. Yet, that’s exactly what today’s spate of retirement calculators and sites ask.

Pre-retirees have questions, not answers. Pre-retirees want to know:

  • How likely is it that my income will continue to grow unabated from now until I retire?
  • Is my current investment style truly as conservative or aggressive as I might think it is?
  • Will I have to make large investments — like children’s college tuition, parents’ health care or buying a second home — between now and when I retire?
  • How much money will l really need on an annual basis to live my desired retirement lifestyle, and what kinds of retirement lifestyles are we even talking about?
  • How much money will I need for health care in retirement?

The list goes on. I won’t drag this brief on and on with all the questions that I, myself, can come up with.

If financial services firms want to effectively market their retirement planning services, they’re going to have to adapt a new approach. Today’s “six simple questions” approach is overly simplistic, and, quite frankly, insulting to those of us with a positive IQ.

If you’d like to know more about what approach I think will be successful, please take a look at my first Aite Group research effort. It’s available for free on the Aite Group (pronounced Eye-tay Groop) web site. Click here for the PDF.

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Quien Es Mas Stupido? Volume Dos

It’s been a while since we last played Quien Es Mas Stupido? Here are today’s contestants:

Contestante Numero Uno: A large, diversified financial services firm.

I have a 401(k) account from a previous employer with this FI, and I decided to roll it over into an IRA (and rollover another old 401(k) into it as well). I went online to do the rollover and everything worked smoothly until I got to the XYZ screen which led me to believe that all the funds in the account were going to be moved into a money market fund.

Which I didn’t want to do. I wanted to keep the money in the same funds they’re already in (for now). I opened up a chat window and the rep asked me “are you looking at the ABC screen?” I said no, the XYZ screen.” He then asked “you’re not looking at the ABC screen?”. And I replied “no, I’m looking at the XYZ screen. There is no ABC screen in this process.”

He then told me this: “You shouldn’t do the rollover online. There are 401(k) benefit reps available at the toll-free number until midnight.”

I said “Um, ok. I work near a [branch/investor center/physical location], I’ll go there tomorrow at lunch.” He said “They won’t be able to help you. You’ll have to call a 401(k) benefits rep.”

So I called the toll-free number, only to find out that the kind of rep I needed was only available until 8PM, not midnight.

The next morning, on my way to the office, I stopped at the physical location, and was told that they could help me — it would just involve a 10 minute call with the benefits department. I said I would come back later, and was advised to come in after 2PM when they got slow. Which I did.

The guy who told me in the morning that he could help was still there, remembered me, and began to help me. After calling up my account, he brought me over to a phone bank to call Benefits. The fact that it took them 20 minutes to verify that I was who I said I was (despite the fact that I was sitting NEXT to the rep and showed him ID) isn’t the worse of the story.

When we finally got down to actually creating the rollover IRA, the rep on the phone says “we can keep all the money in the existing account, except for the XXX fund.”

Needless to say, that was the ONE FUND I WANTED TO KEEP THE MONEY in. The branch rep says “we can do a partial rollover, and move everything except that account.” He then picks up the phone and tells that to the Benefits rep on the phone, only to find out that plan rules prohibit a partial rollover.

I said “screw it” and left. When I got home that night, there was a direct mail offer from this firm waiting for me, signed by the LOB president, urging me to rollover my old 401(k)s using their easy process. I wanted to wad up the piece of paper and make the president eat it.

Why is this firm a candidate for the Mas Stupido award? Not just because it didn’t live up to its promise of an easy rollover process. But also because of this: This firm invested only-God-knows how much to develop an online process for rolling over a 401(k), only to have some online rep tell a customer in the middle of the online process to NOT use the online process!!!!

Contestante Numero Dos:
A large bank.

I have a bunch of accounts with this firm, including two brokerage accounts: One self-directed, the other advisor-based (an advisor, by the way, whom I’ve never talked to, and have never needed to talk to since there’s no real activity in this account). In fact, what kicks off this story is the notification I received that the firm was going to hit me with an inactivity fee (stop and think for a moment how incredibly stupid the idea of an inactivity fee is).

So my wife goes down to the bank and completes all the paperwork to consolidate the advisor-based account with the self-directed account. Two different people tell her that everything is place. She leaves the bank.

Fast forward to last week, when the account(s) statement arrives, and there are still two separate brokerage accounts listed. Not only did the account consolidation not take place, but the advisor-based account got hit with not one, but TWO fees — an inactivity fee AND an advisory fee. Calls to the branch where the paperwork was submitted revealed that certain forms needed to be notarized — but no one at the bank notified my wife or myself of this, and just let things sit. Calls to my advisor have gone unanswered to date.

Why is this firm a candidate for the Mas Stupido award? Mistakes happen, but there’s no excuse for this. On top of the mistake, how can you hit an account with an “inactivity” fee at the same time as you hit it with an “advisory” fee? Doesn’t the second fee imply that something happened with the account, even if a trade wasn’t executed?

If all this wasn’t enough, the simple notion of an inactivity fee is one of the stupidest ideas around (granted, this bank is hardly the only FI to levy an inactivity fee). It’s one thing to pay a bank for doing NOTHING for me, but I ended paying this bank for not doing what I asked them to do which led them to think I was doing nothing, and they charged me that and for advising me (i.e, doing something). Is that confusing? I hope so, because it’s confusing.

So…. Quien Es Mas Stupido?

Yo soy el mas stupido. The sad thing here is that I haven’t even told you about the troubles I’m having with a third financial services provider I do business with. I have two full-time jobs (which is ironic, because not too long ago I didn’t have any). I go to work each morning to Aite Group, and then I come home to my second full-time job: Fixing problems with my financial services providers.

And to think they all want me to consolidate my accounts with them. They have got to be smoking something illegal.

There’s a lesson here for financial services firms. And it isn’t about “customer service”. When I actually get through to someone, they’re generally sincerely helpful, and service-oriented.

The key to winning my business (and I know I am not alone in this) is gaining my CONFIDENCE. I need to feel confident in the firm’s ability to do what they’re supposed to do, and what they say they’re going to do. I have no confidence in the three firms I’ve alluded to above. I have no confidence in other financial services firms that I’ve talked when looking for a new home for my financial accounts (which is why my money is still with the losers I’ve talked about here).

All this talk about using Facebook and Web 2.0 to reach Gen Yers or helping Baby Boomers develop a retirement plan and “achieve their dreams” is a complete and total waste of breath if FIs can’t DELIVER on their promises.

Unfortunately, I have yet to find one that can. (There is one that’s come close, but I need more experience with it before I can claim that it passes the test).

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