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Green Backs Rant Responses: Have We Jumped the Shark?

By Jack Hubbard, Chief Experience Officer

Toward the end of the show, Happy Days, the producers were looking for a ratings boost. After a decade of entertaining the nation, the show was on the way out. So they strapped The Fonz (still in his leather jacket) to water skis and put him in a situation where he had to jump over a swarm of hungry sharks. Since that time, the phrase “jump the shark” has been used in entertainment circles for shows that have gone over the top. One reader suggested we did that with the June 2008 rant. He wrote: “Your newsletter is great but this green rant jumped the shark. Stick to what you know. Keep your articles about sales and sales management and let the Sierra Club worry about the earth.”

That’s fair and, thankfully, the only negative response. The cold hard facts are that only 4% of recyclable waste escapes overflowing landfills and with all its challenges, banking has a great opportunity to take the lead in this important effort to secure our planet for future generations. Here is what another subscriber suggested:

“Like any bank, we produce vast mountains and molehills of printed reports. We are slowly making progress down the long road towards becoming a “paperless” office through the use of technology, but we’re still a long way off. In the meantime, we’ve worked out a deal with a local hog farmer to recycle all of our cross- shredded paper into animal bedding for his pigs. After the pigs have thoroughly used up the recycled paper it gets loaded up in manure spreaders with the rest of the recycled hog waste and spread over fields as fertilizer.”

~ Jim Sykora, First Independent Bank, Russell, MN

Others asked that we not use their names, but here are a couple of good ideas:

“We have asked our business bankers to work from home one day a week. We need to work out coverage in the office, but with cell phones and other technology, there is no reason the bankers can’t be productive from an offsite location. This saves energy too.”

“Our branch managers make business development calls. We ask that they make three calls a week on the way to the office and two calls a week on the way home. This not only saves many gallons of gas (241 branches) it makes our bankers much more productive. The prospects and customers like it too. They find it unique that our banker would make a call on them at 7:30 a.m. or 5:15 p.m.”

“Our training rooms now have trash containers and recycling containers. We make announcements before classes begin, at lunch and at the end of the day about the importance of recycling and reminding the bankers what goes into which container.”

Julie Ruffolo, our Executive Vice President, is a true environmentalist, along with her husband, Steve. Here are some ideas the Ruffolos bring to the table:

• Use post-consumer paper for all internal documents and even for customer paper such as statements, letters and envelopes
• Recycle everything possible: plastic, aluminum cans, shredded paper. Even office items such as ink cartridges (how many of those do we use in a year?) can be repurposed. Be sure old computers, FAX machines, copiers, PDAs, etc. are recycled and disposed of properly–there are toxic chemicals in these items.
• Limit use of throwaway items, including Styrofoam cups. Instead employ logo ceramic mugs or insulated thermos drinkers. Coffee stirrers are unnecessary, just put sugar and milk in before hot liquids or use washable spoons. Don’t supply individual bottles of water–a water cooler is better as the big bottles are reused (even better than recycled!). Be sure staff is using their own drinking glasses, not the throwaway paper ones.
• Raise the room temperature a few degrees and encourage staff to hang their suitcoats when in the office or wear short-sleeved shirts in summer. It’s healthier for customers to walk into cool, not cold, buildings.
• Turn all electrical items off when the bank is closed, don’t just let them go to sleep. Always use the power management functions, or sleep modes, on electrical items when the office is open.
• Turn off office lights when the office is closed. When a conference room or office is not in use, and if there is enough sunlight available, natural light is easier on the eyes during meetings. There are even great motion sensor systems available that turn lights on when someone enters the room and turns them off after a certain period when no one is there.
• Make double-sided copies: it saves on several levels. And don’t use a separate FAX cover page, this will save paper on both ends.
• Carpooling and using public transportation saves money and energy. Some banks subsidize the purchase of public transportation tickets/passes.
• Bringing a lunch in reusable containers is very earth-friendly. Have senior executives model the practice. (Jack Hubbard would tell you that you can also eat faster, which gets you in back front of customers faster).
• Encourage customers to forego the ATM receipt. ATM receipts are one of the top sources of litter on the planet. If everyone in the U.S. left the receipt in the machine, it would save a roll of paper more than two billion feet long–enough to circle the equator 15 times!
• Offer and encourage the use of paperless bank statements, through internet banking and other paperless forms of transaction. To encourage this, offer donations to a charity for those customers that use these environmentally sensitive services.
• Encourage employees to come up with more ideas–there are great ideas to be found when people interact with other businesses or travel. On a family trip to Europe last summer, we stayed in a hotel that had you put your room key in a device by the door allowing you to turn the lights on in your room. When you left the room, you took out the plastic card key and all the room lights turned off.

So we rant. Think of this, however. Financial organizations build their franchises one customer at a time. If each employee was encouraged to do just one of the above ideas, the earth would be a better place to live, work and play–for many generations to come.

Open-Enrollment Seminars: Sales Management and Talking Business

Sales Management Seminar, September 30 and October 1, 2008 …$1,095 registration fee

Talking Business with Small Business, October 2, 2008…$249 registration fee

For five straight years Harris, BB&T, Umpqua and countless community banks have helped sell out our open-enrollment Sales Management Seminars. Why? A Senior Vice President at Broadway National Bank in Texas put it this way:

“This is the most valuable conference I’ve experienced. The information fit in perfectly with our strategic initiatives and provided me with tools I can put into place immediately. If a banker wants to learn how to transform their sales culture into a Performance Culture, these are two days not to be missed.”

Here are just some of the tools and take-homes participants receive:

• Retail Skill Builder and Huddle Meeting templates
• Check-ins: powerful, one-on-one questions
• Joint Calling and Commercial Pipeline Meeting guides
• Dynamic Branch Observation and Coaching strategies

And there’s more, much more…like:

• A complimentary networking dinner on the 95th Floor of the John Hancock Building
• A one-hour 5Cs of Trust-Based Selling session featuring Jack Hubbard
• Tom Doherty, Senior Vice President, Park National Bank leads a Lunch ‘n Learn session about Prospecting, Onboarding and Segmentation

Each Sales Management Seminar participant receives a copy of Conversations with Prospects.

On October 2, 2008 we will present a one-day preview version of Talking Business with Small Business. Branch managers, business bankers and regional sales managers rave about the Talking Business simulation and how it provides instant confidence for calling officers as they delve into to cash-flow issues and how a business makes money.

If you are a CEO (we’ve had several attend), an Executive Manager, a Senior Sales Manager or a branch manager that needs a check-up from the neck up, join us. We limit the program to 25 delegates in each session. Workshops are held at the Hilton Suites Hotel, one block off Michigan Avenue in Chicago. A budget-sensitive room rate has been established with the Hilton.

To register, click on the link: http://www.stmeyerandhubbard.com/workshops/index.html
or contact Kathy Kruzich at 630.845.4676 or kkruzich@stmeyerandhubbard.com.

Retail Survey: Part Two of Three

The first link below takes you to the next series of questions for our 2008 Retail Sales Study. Results of this study will form the basis for a 2009 Retail Financial Institution Sales White Paper which will debut in the late fall of 2008.

http://www.smhtechnologies.com/survey-part2.html

Those that complete each of the three parts of the survey (more than 100 completed Part One) will receive this white paper on a complimentary basis, 60 days prior to its release to the general public.

If you wish to complete Part One of the study it can be found by following the link below:

http://www.smhtechnologies.com/survey-part1.html

Shift Happens: The New Age of Bank Marketing: How Changing Lifestyles And Customer Experience Are Challenging Bank Marketers

By Bruce A. Clapp, CFMP and Nick Vaglio, CFMP

We often review books in this space. We rarely have the opportunity to highlight the efforts of two good friends. Bruce Clapp and Nick Vaglio have collaborated on this year’s must-read financial marketing book, Shift Happens. Written in an easy-to-read format, the book is clear, concise and actionable.

The reasons are clear. Bruce Clapp is a leading executive marketer with over 20 years of marketing expertise. During the past 17 years, he has served in various executive bank marketing leadership positions. Now, as President of MarketMatch, Bruce leads national, regional and local financial institutions into new product development initiatives, brand-building and strategic planning and he does it in a world-class way. Bruce’s work has been published through the ABA’s Marketing Network Library and the ABA Bank Marketing magazine and currently has a recurring series on Retention and Attrition. Bruce’s creative approach to bank marketing has been highlighted in ABA Bank Marketing, ABA Banker’s News, US Banker, Financial Services Marketing, Advertising Review, Dayton Daily News, Cincinnati Business Journal, and the Dayton Business Journal. He is currently on the faculty at the ABA Stonier Graduate School of Banking, the ABA School of Bank Marketing and Management and the international Academy of Banking and Financial Sciences.

Nick Vaglio is Vice President/Commercial Marketing at Wachovia Corporation where he is responsible for developing and implementing strategic plans for the commercial banking segment of Wachovia Bank. He has held strategic planning, marketing and sales management positions for two Fortune 500 companies and has served as an advertising account executive for a major advertising agency. A graduate of New York University and the ABA School of Bank Marketing and Management, he served as Chair or Co-Chair of the Advisory Board for the ABA Marketing Conference from 2004-2007. In addition, he has served as the 2008 Chair of the ABA’s National Marketing Network Council.

Shift is happening constantly, generationally, competitively and it’s what customers are expecting from a banking relationship. Most importantly for us, Bruce and Nick have made trust, the customer experience and integrity the centerpieces of their project. To order your personal copy, you can click here to visit Amazon.com.

Here is an excerpt from Shift Happens:

The Power Shift to the Consumer
In this rapidly evolving technological world, the consumer has clearly transitioned to an age of “I” expectations. Today’s consumer can no longer be classified as a number within a demographic category. Instead, consumers are now demanding to be
communicated with as individuals. This phenomenon has created a unique set of challenges to banks and their marketers. These include an overwhelming need for organic growth, shifting customer lifestyles and the growing influence of a customer experience phenomenon.

As the global economy shifts from market-driven to consumer-driven, the balance of power has definitely shifted to the consumer. The power of the Internet has put the consumer squarely in control of all of their purchasing decisions. Time and place, that were once the domain of the seller, are now under the direct control of the buyer.

In the old economy, the value exchange occurred on the receiving end. Companies created products, set the price and distributed them to consumers. And the business model was to continue to study consumers and predict their demand. Now there is a more fundamental value opportunity at the front end where consumers will pay for a more customized experience that fits their lifestyles.

And many banks throughout the world–large and small–are creating unique customer experiences that appeal to a wide range of customer lifestyles.

Impediments to Organic Growth
Many banks have implemented plans to enhance organic growth, especially in challenging markets where margins are being squeezed by aggressive competitors and countless other market pressures. But as former heavyweight champion, Mike Tyson, once said, “Everybody has a plan until they get punched in the face.”

According to an IBM Global Business Services study titled, “Unlocking Customer Advocacy in Retail Banking,” nearly 50% of customers of national banks have antagonistic relationships with their banks. That means that one of every two customers harbors an adversarial relationship with their retail-banking brand.

These customers are disinterested in developing deeper relationships with their banks, the study goes on to say, and they are also not responsive to the outreach and relationship-expanding efforts of the bank. These customers see their banks as opportunistic, self-interested parties looking out only for themselves. And this sentiment exists despite banks adding things such as service experience initiatives, implementing Customer Relationship Management (CRM) systems, and relationship programs intended to strengthen partnerships between customers and the brand.

A look at a typical banking customer pipeline provides insights into why few banks have been successful in creating customer advocates throughout various customer segments. While many banks are adept at identifying younger customer segments such as Youth, Teen, Gen-Y and Gen-X, they have failed to attract these segments in sufficient numbers to support future organic growth goals.

This youth market is the future lifeblood of any bank. The segment that ranges in age from 18 to 25 years old represents 30% of the U.S. population, spends approximately $200 billion per year and commands a greater amount of control over household purchase decisions.

Over the next decade, the total income of this age segment will reach $3.48 trillion, putting them ahead of even the post-World War II baby boomers that have largely established their financial relationships and headed into retirement.

But why haven’t banks been able to capitalize on this enormous growth potential and create young advocates? It’s because banks have failed to remain relevant to the changing lifestyles of this customer segment.

On the opposite end of the banking pipeline is the segment of customers greater than 55 years of age. These baby boomers are leaving the bank in alarming numbers as some retire and move away and others switch to institutions that are in tune with their current lifestyle.

The common mistake that many banks make in targeting the baby boomers is that, unlike the younger segments, banks tend to treat the older segment as though they were one homogenous group. Viewing baby boomers as a single group fails to recognize their diversity.

Leading marketers segment this group by birth years. This method yields two subgroups: the leading-edge boomers, born between 1946 and 1954, and the trailing-edge boomers, born between 1955 and 1964. According to some sociologists, the younger boomers vary so drastically from the older boomers that they constitute another generation entirely.

How important is this segment to banks? The generation of consumers born between 1946 and 1964 represents over 25% of the total population in the U.S., accounts for approximately 48% of all U.S. families and currently controls 66% of the discretionary income in the U.S.

The Ever-Changing Customer Lifestyle
Many banks use life-stage analysis to segment their retail customers. They use this analysis to make assumptions regarding lifestyle preferences and product offerings. But, like the over-55 consumer previously mentioned, today’s consumer is telling companies that they are out of touch with their diverse lifestyles and how to market to them.

Consumers are sending clear signals to companies that, in order for them to buy their products and services, it had better be worth their time. And it’s not that money isn’t important to consumers, it’s that money doesn’t necessarily define value to them anymore. Time has become as valuable as money. Time has become the new currency in today’s customer-driven marketplace. Transactional banking to a large degree has become a no-time activity as consumers are devaluing the simple act of banking.

More and more, consumers are saying that when banks compete, they win. In fact, that’s the exact slogan used by LendingTree.com. Consumers are researching options online nowadays and they no longer need companies to tell me what to buy or to give them guidance in the marketplace. Consumers have taken full control of their purchasing decisions because they have instant access to all of the necessary information required to make an informed and educated choice.

Today’s average consumer with a handheld PDA can check the weather, monitor traffic conditions to the office, sell stock on Scottrade, check an eBay bid, make a purchase on Amazon, check CNN for news highlights, transfer funds between banking accounts, check mortgage rates and get insurance quotes–all during their morning coffee.

We are living in a world where consumers have a sense of empowerment over every aspect of their life. And companies that do not engage with consumers in that way in the marketplace are out of touch with the way people live their lives today. We have to literally plug into their lives.

And in terms of lifestyle relevance and customer experience it would seem that banks are late to the dance. Consumers who have control over so many aspects of their life now demand that they also have control over their banking experiences.

As technology makes it easier for consumers to process and use information, we will see a shift of control in the marketplace away from companies and towards consumers. Away from centralized control and toward the feeling of decentralized control by removing time and place obstacles.

“I” Expectations
Today’s consumer has a new value proposition that they are imposing upon companies who want to sell products to them. And that value proposition is that your products and services had better be worth their time. And if it’s not worth their time then that company and its products have ceased to remain relevant.

In the world of I Expectation, value is no longer measured in material accumulation or the old value of quantity, tangibles and money, but rather in the new values of quality, intangibles and time.

In fact, time is so important that it now falls into two categories—no time or slow time. If it’s not worth a consumer’s time to do it then it’s worth no time. That means that companies now have to figure out no-time solutions to all those things that aren’t worth any time to consumers.

That’s where technology comes into play. In a time-starved world, technology can remedy a no-time problem. But bear in mind that technology to provide no-time solutions is not something that you can charge more money for.

Continental Airlines doesn’t get to charge more money because they have a nice self-service e-ticket kiosk. McDonald’s doesn’t get to charge more money for a hamburger because of their self-service ordering system. No-time solutions are a cost of doing business. And they don’t necessarily create more value that people are willing to pay for.

The Experience Phenomenon
It seems that it’s virtually impossible to pick up a business publication these days without reading something about companies that are going to great lengths to enhance the customer experience.

Many progressive companies—such as Disney, Ritz-Carlton and Starbucks—have leveraged customer experience into a competitive advantage not easily duplicated by their competitors.

Banks of all asset sizes from Washington Mutual and Umpqua to Union National Community Bank and the National Bank of Kuwait are separating themselves from the competition by following one basic tenet: it’s all about the customer experience at all levels of the organization.

But bank marketers have to understand that with each brand comes a different level of knowledge or experience with that brand. In a bank, for instance, a customer who uses the branch, has multiple accounts and, perhaps, an assigned banker has a greater level of knowledge and a much different experience than a customer who merely has a checking or an online account and never interacts with a human.

Yet, each of those customer groups is important to the economic future of the bank and you need to reach them both with the same brand platform and provide them each with a tangible customer experience.

Today, many bank marketing seminars and articles tend to focus only on the best practices and tactics that have been successful at many financial institutions, ignoring the fact that these tactics are successful because the unique culture of a particular institution is fertile ground for creating satisfied and loyal customers.

In complex intangible services businesses, such as banking, trust is more important than differentiation. Buyers of complex intangible services are buying specialized expertise. They are seeking an expert because they don’t want to, or can’t be, an expert in the service they are buying. Given a choice, they prefer to find a qualified expert they trust, rather than evaluate the expertise of many different alternatives. Again, knowledge overshadows simple information.

Most models of complex buying are rational and linear. But the buying of complex intangible service is a two-step process—qualification and trust assessment—either of which is primarily rational.

When people buy an automobile, they have a fairly good idea of what they are buying. When these same people buy an architectural design, a customer relationship management system or a complex financial derivatives product, they are far less confident of what they are getting in return. Not only is success hard to define, so is the product itself.

Many providers of intangible services try to increase buyer confidence by stressing the differences of their particular product or service. What they forget is the biggest differentiator of all—the increased level of confidence that comes from trust. And that trust is born of personal experience.

To read more, please visit www.MarketMatch.com for more information on Shift Happens: The New Age Of Bank Marketing: How Changing Lifestyles And Customer Experience Are Challenging Bank Marketers.

Conversations with Prospects–Getting Ready for 2009

Sure we’re economically challenged as a nation, but lots of businesses are making lots of money. Find them and touch them through the unique approach outlined in this book. Order your copy now by clicking on the book icon above or by visiting www.stmeyerandhubbard.com.

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Jack Hubbard Chief Experience Officer 847.717.4328 jhubbard@stmeyerandhubbard.com Bob St. Meyer President 847.717.4322 bstmeyer@stmeyerandhubbard.com