Financial Marketing and Cross Selling Blog
A credit union connects with the local biking community
When it comes to content marketing techniques, one of the golden rules is to provide content that isn’t always tied to one of your products and services. You have to know when providing content for the pure sense of being informational to the end user is the right thing to do. For example, many banks and credit unions don’t offer health insurane but it may not be a bad idea if you dedicated some space for content related to the recent changes in health care on your website or in your next newsletter. You may not win new business directly from this approach but you will build your brand as a resource and not just a place to conduct daily banking transactions.
An example of this was well executed this past Friday when Salal Credit Union in Seattle, Washington decided to take advantage of the national Bike to Work Day to connect with the local biking community. The credit union had three what they called “commute stations” setup at various points in their community. They handed out ”refueling snacks” and drinks. The best give away were free bike lights, an important saftey item for those biking home in the dark, especially in a busy city. A tag line they used in their blog post that I thought was creative said “we care for your physical AND your fiscal saftey!”.
While the credit union is by know means selling biking services to their members, they are developing new relationships with each biker, jogger, roller blader or walker that stopped by the stations this past Friday. And knowing that it would be a busy day for such active bikers, they made the smart decision in promoting this event.
It even caught the eye of this here Bostonian. I was a bit jealous and responded to them by twitter that I wished a local financial institution here in Boston was handing out lights because it just so happened that my fiance and I were in the market. Within minutes they replied to me and said “Tell you what. You send me your address by direct message, and I’ll make sure you get a few!” Wow. Here I am on the opposite side of the country, not even a potential member and they’re offering to send me a few lights. And what do they get in return you may be asking? My praise here on our company blog. For those SEO and online marketing folk, you know the importance this has on your campaigns.
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Lost – A lesson in what NOT to do in customer service
The show Lost, which had its finale last night, provides us with some important lessons to be learned. Some scientific, some religious but for the purposes of this post, the lessons are about what NOT to do when approaching customer service at your bank or credit union.
There’s no denying that Lost was a successful show. With the first three seasons reaching an average of 15 million viewers per episode, countless number of fan base websites, forums and meet up groups, this show was a monster when it came to creating loyalty. But looking closer, you’ll realize how the producers went about creating this strong loyal following. In comparison between the producers strategy and the strategy of some of today’s banks, you can see some similarities. For example, they kept coming out with shiny new plot lines (products) for their loyal viewers (customers) to talk about, and just when a new plot line was getting old and losing its muster, the writers (product developers) would think of a new story to tell.
The problem with this model is that when the loyal customers come to you looking for solutions to issues they may have with past products or services the powers that be don’t even know the answer. They’re too busy working on the next new product instead of focusing on making changes to existing ones based on customer feedback.
Spoiler Alert
The finale of Lost has been seen as a let down by its loyal fan base. With so many storylines in place, the end left us with one answer, the survivors of Oceanic 815 were all dead and they needed to find each other in the afterlife in order to continue moving on to ____ (heaven, hell, who knows). While the show was a great ride, ultimately, they left with too many unanswered questions. The producers walked away with both their wallets and egos inflated but left those who kept them going all these years in the dust. Sound familiar?
Plot lines in a story like Lost are by no means a perfect comparison for financial products and services. But with all the potential regulatory changes (most notably Reg E) coming out of Capitol Hill, many institutions I’ve talked to are already at the drawing board thinking up of new products to counteract the potential loss in revenue that this new regulation will most likely cause.
What they should be doing is listening to their customers. By doing so, they may realize that they don’t have to rethink the wheel on their core product set to be successful. By opening up their communications, making it easier to have dialogs with customers and being more transparent, they can avoid a similar backlash that the creators of Lost are experiencing today. This is a simplistic example of what I’m talking about, but in the Banksimple.net blog, there was a post titled “How do banks work?” In plain English, they described perfectly how banks go about making their money. This simple yet effective approach to transparancy goes a long way with your customers.
As for the producers of Lost, they’ll eventually be forced to come out with a movie to make up for their lack of transparency. They’ll be forced to tell us why they introduced a whole group of people that called themselves the Dharma Intiative, what was the purpose of the “Others” and why did they know how to speak Latin, and finally, tell us why the islands survival is so crucial to humanity.
Book Review: The Referral Engine – Take aways for financial marketers
John Jantsch is the perfect example of someone who practices what he preaches. About a month ago I stumbled upon an offer to receive a free copy of his new book, The Referral Engine, if I agreed to write a review at some point during the week of May 10th. I don’t remember the exact source – Twitter, Email, Blog, etc. – but this is just one of many referral techniques that he highlights in this book.
John is the founder of Duct Tape Marketing, a marketing consulting practice that has certified consultants throughout the country. You may even have a Duct Tape Marketer in your back yard. The concepts that John talks about both with his Duct Tape and author hat on are not mind blowing or revolutionary (that is, if you’re hip to the new rules of marketing and PR). By now I think we can all agree that the Internet, just like the TV, has changed the game of marketing for a long time to come. Instead of talking to our customers, we now have to listen and make them an integral part of how we craft our communications and even develop our products. John lays out in this book that the age of the 4 Ps – Product, Pricing, Place, and Promote – is no longer viable and has given way to the age of the customer. In this new age, we now have the 4 Cs – Content, Context, Connection and Community.
A resonating theme throughout the book is the concept of education. There’s an entire chapter dedicated to the development of content. The goal of this content is to educate your clients and prospects. Oftentimes this content will include tips on how someone might go about creating their own solution just like the one you have to offer. In the case of a banker or financial professional, this might be content that explains the home buying process – from placing a bid to hiring a lawyer - or perhaps the best types of investments to make when you’re in your thirties and have a particular amount of savings available.
How this content is delivered takes on several forms and John does a great job of outlining the many different approaches. As John states, “An educated customer will always be a better customer.”
But perhaps just as important as educating our clients, we must ensure that our own employees are educated as well. Educated on the status of the company, educated on the type of clients “we” work with, educated on their role and how it plays an integral part of marketing – whether you’re in the IT department or in sales. In fact, John goes on to state that the sales departmet is perhaps the most important part of your marketing team. It’s often during the sales process that determines the future of your customer relationships. If they had a good experience during this process, the chances of them becoming a source of referrals is much higher then if they received poor service. You may be saying, “Well, if they received poor service, why did they buy from us?” Why people buy is not often about customer friendly service. Sometimes it’s about convenience (i.e. you may be the closest bank to them) or about pricing (i.e. you have the best rates). If this is the only reason you’re winning accounts today, chances are you’re not receiving many referrals from your customer-base.
Hands down, this book is well worth the read for the ideas and references alone. John isn’t just a talker, he’s a doer and he helps show you that by “doing” the steps talked about in this book, you’ll be rewarded with more referrals and more business then you can handle. For example, the second to last chapter, “Snack-sized Suggestions”, takes a look at three different professional categories – Retail, Service Business, Independent Professionals. Real-life examples of how to implement the ideas brought about in this book are shared for each category. Here’s one of my favorites from someone in insurance sales:
This insurance agent turned his business-owner clients into stars. He interviewed some of his highest-profile clients on what it took to be successful in business. He recorded these interviews and eventually turned them into a very useful business-building library. Then he sought out potential interview guests to include in the series. These business owners didn’t see him as an insurance salesperson; they say him as a member of the media who had the ability to offer their business lots of free publicity. But, eventually, many of these featured businesses bought insurance from him and, in all cases, they promoted his business when they gave away or sold the library of interviews.
So, are you ready to let go of those traditional marketing models? Are you ready to dive head first into this new approach? If you ask some of the worlds best sales representatives, they’ll let you in on a little secret – none of this is new - it’s just new to most marketing departments.
The path to more fee income for financial institutions
It’s been discussed time and time again – banks need more fee income to remain stable in this volatile market. For the past few years this type of revenue has been mainly based on fees from debit card use and overdraft protection. According to a recent Gonzobanker article, 80% of fee income comes from these two sources.
It’s no secret that these two sources are now in danger of falling off the cliff. In this same Gonzobanker article, they suggest taking an account analysis approach to retail customers, similar to how small business accounts are handled to determine if certain fees will occur or not based on the accounts activity every month. While I’m not against this approach, I feel strongly that growing out a relationship versus changing up the way a customers existing services are priced has greater potential for both the bank and the customer.
One of the greatest opportunities for banks and credit unions to continue generating new revenue is by effectively moving existing clients into new products and services that go beyond the typical product scope. Services such as investments, insurance or trust. Done right, a well managed brokerage insurance program can add significant revenue to an institutions bottom line. According to Michael White’s recent Bankinsurance.com News report, Oneida Savings Bank in Oneida, New York, had 4.24 million in insurance brokerage fee income in 2009 which was 76.7% of non-interest income at the bank.
Taking it a step further, if you use industry assumptions and take into consideration your branch network as the main referral source, the revenue opportunities start to look rather promising.
Assumptions:
- $2,000 Gross Revenue per Sale (based on all products and services)
- 75% of appointments are qualified
- 40% of those appointments make a purchase
- Every lead = $600
If you assume that every branch has six employees who are potential referral generators (based on Truebridge survey conducted in 2009) and each employee generates just one more referral per month, you will have 72 referrals from that one branch in a year. If you take the above value of every lead into consideration, this branch would generate $43,200 of additional revenue just by simply increasing the activity by six new referrals every month. But don’t take our word for it. Plug in your own figures and see what comes out.
Imagine the revenue you can generate if all your branches can make this happen. There’s no question that asking a branch to generate referrals and actually having them generate referrals that are qualified are not one and in the same. For referrals to be qualified, you have to do more then just open up your list of maturing CDs and provide your sales represenatives with the names of each customer. You need a strategic process that involves a customer service approach employees are comfortable using on a daily basis. If it’s not simple and repeatable, then it’s not worth implementing and the account analysis approach Gonzobanker speaks of is perhaps your best option.
But if you’re willing to explore new approaches to both your marketing and customer service processes, then there’s no question that cross selling more services to existing customers will make you a much more stable and profitable financial institution for years to come.
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