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Does Age Really Matter?

There was a discussion on Twitter yesterday that revolved around an article that discussed the new marketing campaign at Bank Of The West. The article stated that the bank was targeting adults in the 18-54 age range.

As I stated on Twitter, “everyone” is considered a customer segment also. This “targeted segment” just smacks of laziness. It also makes Bank Of The West sound like almost every other bank and credit union in the market.

They claim they want a specific type of customer, but they really want everyone. Most people don’t want to be a part of something that accepts everyone. Customers are more attracted to something that’s exclusive.

What an 18 year old wants in a bank is different from what a 30 year old wants. What those two want would be different from what a 50 year old wants. From what I’ve seen, if you target a market that has more than a 10 year difference in age, you’re just praying you’ll get lucky.

Now, I don’t think using age as a key criteria is bad, as long as it’s used in conjunction with other demographic segments. But if you’re one of those people that still thinks age is the only indicator that matters, you might want to switch careers from marketing to telemarketing.

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Categories: Marketing Tags: ,

So You’re on Social Media? Prove It.

July 14, 2011 2 comments

Dilbert.com

Well congratulations.  You’ve been successful with setting up the Twitter, Facebook, Flickr and YouTube accounts for your financial institution.  You’ve also set up a blog that has more than 100 daily readers.  You’ve even run a few Foursquare and Facebook contests.  Your Twitter account is actually used to communicate with customers, not just blast marketing messages.  I’ll bet you’re even looking into get your own special badge on Gowalla.

Looking at your website, you have all your social media icons listed on your home and contact us pages.  They can even be found on the footer of all your pages. And the best part?  Upper management bought in after you proved the business case for why social media is important.

But are you really all in yet?  The next time you’re watching those shows on DVR, watch some commercials instead of skipping them.  Did you notice that some companies mention their Twitter and Facebook pages in their commercials?  Open a few non-industry magazines and look at the ads.  Notice Twitter and Facebook icons there also?

Now look at the marketing material you send out.  I’m willing to bet that you don’t promote your social media sites on anything other than your website.  If you go into your branches, you won’t see any icons listed on your displays either.  But you know what you will find?  The link for your website.

The adoption of social media reminds me of when online banking came onto the scene.  It seems like it took forever for banks and credit unions to promote their website in their marketing materials.  Online banking was the driving force for getting websites promoted by marketing.

I’ve seen some discussion about low numbers of Facebook fans and Twitter followers.  Because these numbers are so low, people question the validity of social media in financial services.  This same argument was used when online banking first became available.  If you build it, people won’t necessarily come.

Yes, most of your online banking customers probably know you’re on Facebook and Twitter.  But that’s just because they noticed it on the homepage when they were logging into online banking.  Besides, that’s only about 25-35% of your customers.  We all know the online banking login screen is the #1 hit page on your website.

You have other marketing channels that you need to use to promote your social media presence.  There is absolutely no excuse for you to not list your links on direct mail, email messages, commercials, and branch displays.  I’m sure they will fit right beside or below your website link.  And if you’re really social media savvy, you’ll create and display a special #hashtag for your customers to use.

Comic from Dilbert

Why I <3 My Big Bank

Steve Topper, over at Financial Marketing Insights, brought up an interesting question a few days ago: why would anyone with a lick of common sense continue having their checking account with any of the nation’s four largest banks?  Well, I happen to think that I’m smarter than the average bear, so I’d like to respond to that question.

First, let me say that I do understand where Steve is coming from.  I used to work for a large community bank and I’m also a fan of credit unions.  But I still do a majority of my banking with one of the big four.  There are really only two reasons that I stay there:

1. They have ATMs coast to coast
Years ago, I used to travel a lot.  Now, I anticipate traveling even more.  It’s nice to know that wherever I go in the US, I can find an ATM for my bank.  I do realize that credit unions actually have a larger network (which is something they DON’T play up enough, if you ask me.)  It all comes down to location, location, location. 

With my former employer, as soon as you left the coast (and I mean a county or two over), you were subject to ATM fees.  Actually, that’s no longer true.  There is just a perception that you have to pay a fee.  You can use an ATM if it’s in the MoneyPass network.  However, it’s not really advertised, so they are like credit unions in that regard.

2. Better technology

How many banks and credit unions have mobile banking through the mobile browser?  How many have an app?  How many have text banking?  Now, out of the ones have text banking, how many offer transaction alerts? Let’s be clear, mobile banking through the browser doesn’t have a big adoption rate for a reason.  The FIs that are really growing mobile banking faster than the industry rate have text banking with transaction alerts. 

With very little marketing, my former employee blew away Bank of America’s adoption rate because they had text alerts.  However, most FIs don’t offer this feature.  The big four all have text banking.  They also have apps for smart phones and have either launched or plan to launch a tablet app.  Here are some other services they offer:
– Online loan applications
– Online account opening
– External transfers
– Deposit through ATM
– RDC using a smart phone
– PFM

In customer segments, I think I fall into the “tech-savvy and prefer self-service” segment.  I want to perform my bank transactions through any channel that suits me.  I also want to be able to go an ATM without incurring a fee, no matter where I am.

The smaller banks and credit unions aren’t there yet.  Heck, I have a feeling that most of them are still trying to push through the business case for better technology to upper management.  But to most people, a checking account is a commodity.  Although my account doesn’t say “free”, it is free, provided I stay within the required conditions.  For the life of me, I don’t see what is so bad about this.

At the end of the day, customers just care about whether their money is safe or not.  Also, can they get to it any time/way they want?  I have never been charged a fee that I didn’t know about.  But then, I tend to read the fee schedule on my account.  For the times I was charged a fee, I was able to get it reversed most of the time.  For the times that I wasn’t, there was a lesson learned.

I think that as an industry, we need to get past this “no free checking” = “bad bank/credit union”.  There are a lot of happy customers that are willing to pay for peace of mind and multiple banking channels.  Odds are, these are the customers banks and credit unions would want. Offering a free checking account isn’t going to make them open an account.  That’s just one of the many bullet points they’ll be looking at.  They also know that “free” doesn’t necessarily mean better.

Categories: Marketing, Strategy Tags: ,

More Reasons Your FI Should Be On Twitter

Hubspot posted an article about facts that can help justify companies using Twitter. A few of them stood out as being important to banks and credit unions:

5. Twitter users are more educated than the general population.
63% of Twitter users have a 4-year college degree or higher, as compared to only 40% of the general population. If your product/service/company is targeting a more educated customer, there’s a good chance they’re tweeting—or will be soon.

6. Twitter users have higher incomes than the general population.
47% of Twitter users earn $50k or more per year; 24% earn more than $75k. Compare that to 33% and 18% among the general population, respectively.

8. Twitter plays an active role in purchasing decisions.
42% of Twitter users rely on this channel to learn about new products/services, and 41% of them share opinions about products/services via Twitter. Soliciting opinions about products/services and seeking out discounts/coupons/sales are also popular Twitter-based activities.

9. 67% of Twitter users are more likely to buy brands that they “follow”.
Whether interaction on Twitter is the cause of this greater allegiance or not is unclear—but it certainly seems that extra Twitter love doesn’t hurt.

10. Companies that use Twitter average 2x more leads per month than those that do not.
This, perhaps, is the most compelling reason of all to invest some time on Twitter—particularly if your target customer is educated, affluent, and tends to be an early adopter.

Read more: 10 Essential Twitter Stats

Savings Sweepstakes

January 21, 2011 Leave a comment

Last month, a jewelry store in Asheville, NC promised its customers that if it snowed more than three inches during the month of December, their holiday purchases would be free.  It ended up snowing six inches.  The payout ended up being more than $400,000, split between 311 shoppers.  In order to pay out the winnings, the owner took out a $10,000 insurance policy.  You can read more here.

When I read this story, I thought this would be a great idea for banks and credit unions.  We’re constantly looking for ways to bring in more deposits. A contest like this with an emphasis on savings or CD accounts could be a winner.  This would have been cool here in Charleston, SC, since we actually got over three inches of snow in the month of December.  You could also base the contest on a sporting event.  The Superbowl and March Madness offer great opportunities.  For instance, if a customer picks all of the Final Four, the CD they opened in March for $5000 is doubled.

I think this would be way more effective than the usual newspaper CD teaser.  And I’m sure there is an insurance agency that would offer a policy for something like this.  Of course, I wouldn’t suggest using the bank-owned insurance company…

Categories: Marketing Tags: , ,

The Elephant (Banker) In The Room

November 3, 2010 6 comments

Last week I had the opportunity to attend the CU Water Cooler Symposium. When Matt Davis invited me, I was very hesitant. “You actually want a banker to attend?”, I asked.  “Sure, why not?”, was the response. “You can bring a different perspective.”

So off to Fishers, IN I went. Let me tell you, this had to be the best conference I’ve ever attended. There were two days of great speakers and a wealth of information. As someone commented, if you didn’t get a ticket because you thought it would just be about social media, bad mistake.

The tweets from the event are only a sample of a information we received. You can find an archive here.

While the symposium as a whole was great, I’d just like to highlight a few sessions:

Robbie Wright, from CU Innovators, spoke about using social media to discuss the hard topics.  He said that instead of just talking about marketing fluff, we should try solving the hard problems.  Credit unions need to focus on the non-sexy to stand out for their customers.  At the end of the day, credit unions are a business, not a charity.  They can’t just focus on “being on Twitter and Facebook”. Social media needs to add value to customers and the credit union.  You should build a business case to use these tools and income is a good thing.

Rebecca Corliss, from Hubspot, gave a presentation on inbound marketing.  I’m a big fan of Hubspot and have always wanted to meet someone from the company. Hubspot really helps you leverage your online presence to generate leads. Old school marketing is interruption based while the new school is permission based.  Some advice Rebecca gave was to think of inbound marketing as an ecosystem, not a cubicle.  You need to target your keywords in order to build your rank.  Inbound marketing is an investment and can build down the cost of leads.  Another piece of advice was to have more than one “contact” form.  The forms on your website should have a “call to action”, not just ask for generic information.

Ed Brett, from Westminster Savings, would probably get the vote for best speaker.  No slides, just straight talk.  Ed explained that although his credit union was much smaller than the competition, they were able to compete because they take advantage of their small size.  Smaller companies are able to be much more agile so there are less levels to go through to get to a decision.  At larger companies, there are more politics, agendas, and decision makers.  Also, credit unions need to be better bankers than the bankers.  This is a business and they need to help people do their banking better.  There should be less emphasis on social media and more on simplifying banking.  If you want to be agile, you should partner with agile vendors.  At the end of the day, you need to bring value to your members.  Ed also gave three statements that really stood out to me:

1. I challenge you to find other industries that are seeking to model their service after credit unions (banks).
2. The only innovation in financial services over the last 50 years has been in ‘access’
3. Your job is not to use technology, but to apply it.

Maya Bourdeau, from Attune, spoke about Psychology in Marketing.  She talked about how her company discovered that small sample sizes gave as good results as large pools of participants.  But, of course you have to be very discriminate in selecting your small sample.  Another thing they discovered through their marketing development was credit unions need to show two times the value to get members to switch from a bank.  They also said to keep it simple and explain the personal benefit.  For example, instead of saying “we helped people save over $7 billion”, say “we can help YOU save $200”.

In addition, I had the opportunity to be on the expert panel about credit union branding.  One recurring theme was credit unions really need to sit down and decide what they want to be.  I mentioned that credit unions need to play to their strengths and explain how they’re different from banks.  Most people don’t know what the difference between the two is.  I also stated that “credit unions can’t out bank a bank, we’ve got that down”.

All in all, this was a great conference and I’m looking forward to going back next year.  One question I was continually asked was, “why don’t you work for a credit union?”.  My response was, “I believe I’m a credit union person trapped in a banker’s body.”  As Morriss Partee said, that statement is “an instant classic”.

You can find more summaries here:
CU Times
unCUlturers
Committed to Memory
Currency Marketing
The 2020 Vision of Marketing
Video of Presentations

Wesabe, We Hardly Knew You

July 1, 2010 2 comments

Wow.  I’m really sad to see Wesabe go; I was really rooting for this company.  Their technology was great and really helped transform PFM.  The Springboard application was also a cool idea.  I believe Wesabe was the first bank tech vendor to offer a way for banks and credit unions to signup for a customer facing service that would be active within 48 hours.  A lot of vendors could learn from that.  Sidenote: if I were a white-label OFM company, I’d look into buying this piece of technology from them.

But looking back, as much as I liked Wesabe, I didn’t really use the service that much.  Mint, on the other hand, I use at least once a month.  The reason for this?  I’m lazy.  One of Wesabe’s key points was that they didn’t store your online banking credentials.  You had to constantly upload your account information.  Mint, on the other hand, loaded it whenever you logged into their service.

I imagine that for a lot of people, this also made a difference.  Now, I don’t remember if Wesabe offered weekly alerts about your accounts, but I know Mint does.  Seeing those weekly emails and push notifications to my iPhone constantly reminded me about the service and reminded me to login and update my accounts.

So what does this mean to us financial folks?  It means that we need to stay in constant contact with our customers.  Customer apathy towards their FI helps increase the churn rate.  As we push our customers to online channels and branch traffic drops, contact becomes increasingly important.  Ron Shevlin’s post Why Engagement Matters and The Financial Brand’s post How To Build Relationships With Branch Avoiders are two great insights into this.  Otherwise, you could look up one day and wonder where all your customers went.

One bright side to all this is Wesabe will open source some of their technology.  I’ve been looking for a reason to build my Ruby on Rails chops and this looks like a great one.  I’m sure other developers are chomping at the bit also.

Related Posts:
Is PFM Really the Answer?
Wesabe Launches Springboard
If You Can’t Beat ‘Em, Buy ‘Em
No Know-How, No Order