Category Archives : Blog


Bankie Says Relax! How Banks Benefit from Emotional Branding

bankie sayOn the Holmes and Rahe stress scale, 24 of the 43 most stressful life events have a financial component. Mortgages made the list three times! These important events – like starting a new job or having a child – have serious financial components and emotions can run high. Financial marketers can drive sales if they understand how emotional branding influences decision-making.

The first thing to understand is that people aren’t as rational as we like to think we are. We’re driven by emotions. An extreme example would be a parent running into a burning home to save an important family photo album; A perilous feat that’s emotionally motivated. We make decisions like this (albeit in a way less dramatic fashion) everyday.

Me? Just last weekend I picked up a rice cooker at Target. This wasn’t a rational purchase – it’s no sweat to make rice on a stove – but I was sold on the emotional idea of flipping a switch to “cook” and having the process carry itself out.

Emotions are even endemic to the very way we talk about brands. When you think about it, it’s kind of weird when a person says, “I love my iPhone!” Of course this isn’t literal, but it’s easy to see that our attachment to brands can run pretty deep.

Emotional branding can help during many stressful life events

24 of the 43 most stressful life events are finance-related

For financial institutions, emotional branding conveys to your customers that you can help them put out fires. It develops customers’ confidence in your brand. They see you as a resource that can make them less worried or anxious about financial decisions. Emotional branding helps put customers at ease.

Avoid This Mistake

A Gallup interview can shed a little more light on how our emotions influence us.

“I will give you an example of human behavior and behavioral economics called the endowment effect. If an organization offers a set of features to customers and one of the features is rarely used or maybe not used at all, the organization may decide to remove that feature from the product offering. After the organization communicates the removal of the feature, everyone goes crazy and the phones light up with people complaining and threatening to close their accounts. Once I’ve given you something, regardless of whether you use it or not, you perceive it to be of value. I can’t take it away from you because you have an emotional connection to that feature, even though the feature is not something you use every day or even intend to use.”

Whether you’re enacted an emotional branding strategy or not, people will still relate to your brand on an emotional level.

An Emotional Branding Strategy That Works

Financial institutions should work to alleviate a fear, anxiety or concern that their customers are facing. A powerful way to do that is to provide answers.

Your customers are looking for help. They want to save money and avoid mistakes. They want to make the right decision for whatever stressful life event they’re facing. Marketers should communicate their institution’s capability to help customers with their problems.

The key to strong emotional branding is to eschew sales messages. Focus on the emotion first and foremost.

-A customer needs a mortgage and is really stressed out!

-The bank can explain the fundamentals of how mortgages work

-The customer learns the basics and develops confidence in their ability to choose the right financial product

-The customer gets connected with a person at the bank who can help them find that product

Along this journey customers develop a better appreciation for the services their bank can provide. Customers who are emotionally engaged like this represent a 23% premium in terms of share of wallet and profitability.

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Happiness is Contagious – How Emotional Marketing Drives Sales

Emotional Marketing - Image By Martin Cathrae (Flickr: All Smiles) via WikicommonsAre your customers unhappy? Not unhappy with your company, but in broader terms. At the very least they’re stressed out and anxious about making a mistake. Chances are they’ve got people who are counting on them to make a smart financial decision. John might need a car to get his kids to school on time. Mary might be buying a house. Financial institutions should use emotional marketing to provide benefits to customers that go beyond low rates.

Research from CEB has shown that ‘emotional marketing messages are twice as effective as promotional ones.’

There are few things more stressful than deciding on a mortgage. It’s a huge financial commitment. Customers have enough to worry about and their bank can provide some relief with simple answers to all their questions. That’s the crux of emotional marketing. What emotional benefits can you provide to your customers?

Here’s an example of how it works in action.

Mary needs a mortgage and has no clue where to start. Fixed-rate? Adjustable-rate? She just wants a good deal that will work with her budget.

Right here is where emotional marketing comes into play. In Mary’s case, her bank would want to communicate that they can help her save money and avoid making a mistake.

Her perception shouldn’t be that her bank is saying, “Hey! Buy this product!”, but instead “Hey, we want things to be simple, we don’t want you to be worried, we want to help you find what’s right for you.”

Customers will buy from the place that creates emotional appeal.

Get tips for better emotional marketing in our next workshop!


The Invisible Hand of Marketing

A sagacious painter neglected to include hands in this portrait of Smith.

A sagacious painter neglected to include hands in this portrait of Smith.

We’ve all heard of Adam Smith’s idea of the “invisible hand” before. We take this term to mean that the market will regulate itself (though this may not be what Smith was actually saying). But not only is there an invisible hand of the market, there’s one that can guide marketing too.

The invisible hand of marketing works when you sell by not selling.

It allows you to engage your audience with something more than a new low rate, helping you to define your brand and give your customers a great experience.

Here’s a great example: Think about the back of a cereal box. Maybe there’s a maze or a crossword puzzle on it. Maybe a recipe. These are different types of “content”. In practical terms there’s nothing ad-like about these things, but they can be very powerful marketing tools. They help to invisibly build a brand experience that engages customers.

Not only can financial services use content in their own way, they have a huge opportunity to succeed as more people move online.

The online browsing options that banks traditionally offer are important, but usually not extensive: Rate info, product info, branch locations, online banking. This is all great stuff to have, but doesn’t really qualify as content. Yesterday I saw not one, but TWO ads for 1.99% APR loans from different banks. Why would I go with one and not the other? Content can be a driving factor when someone has to make this decision. Which brand has given them a better experience?

WORKSHOP: Learn how banks and credit unions can drive sales with content

Rather than work entirely in traditional ads, financial institutions should be offering content: Articles and info throughout all their channels that will teach, not sell.

Instead of a kid who’s bored at breakfast, your audience is someone who has to make an important financial decision. Maybe they want to buy a house and need to learn about mortgages. Maybe they need a loan for a car. They’ll be able to find plenty of ads out there on banks’ websites, yet not a lot of info that can help them understand the buying process and what’s right for them.

If you can teach customers before you try to sell something to them they’ll want to buy from you. You’re in effect using an invisible hand to market your products and services.

The irony in this metaphor is that you want to make your content as visible as possible, promoting it through channels where customers ignore traditional ads.

Convince people that your brand is the best to bank with. Check out our next workshop.

Sign up and Learn:

  • How to provide high value that leads to personal engagement
  • How to have customers see you as the first place to go for future needs
  • How to leverage both branch and digital channels to reinforce this engagement

 


Teenage Financial Literacy – How much do kids today know about money?

The results are in and this is going on your permanent record! CNBC recently reported on the results of the Organization for Economic Cooperation and Development’s global assessment of financial literacy among 15-year-olds. The outlook for teenage financial literacy in the U.S. isn’t so bad, but there’s very clearly room for improvement.

Here are the results of the 2014 OECD test.

The OECD rates someone as “baseline proficient” if they score between 400 and 475. A student who scores 625 has the “highest proficiency”. The average score in the US was 492. This isn’t half bad, considering we’re talking about young people who (generally) don’t have big financial responsibilities yet.

Our teachers, parents, relatives and financial institutions are doing a great job getting kids to understand the basics, but we all know how quickly things can get complicated. A 15-year-old might be buying car insurance or taking out a student loan in a handful of years.

The OECD test covers relatively simple concepts. Students are assessed based on their understanding of value for money (e.g. buying in bulk is often cheaper than buying piecemeal) and their evaluation of spending priorities (paying rent is more important than going to a waterpark) along with a few other concepts.

One concept that’s particularly interesting is students’ ability to identify phishing scams. Can they tell if an email – purportedly from their bank – which asks them to supply account information is authentic?

take a sample test here and see how you stack up

Globally, the U.S. is lagging a little bit behind, ranking 9th out of 18 participating countries.

US teenage financial literacy comes in just below the global averageStudents in Shanghai produced the highest average, but because the test was limited to one city this doesn’t paint a national portrait for the Middle Kingdom. The next-highest scoring country was Belgium with an average of 541.

Teenage Financial Literacy: A Permanent Record Issue

Any teacher will tell you: Education is a lifelong process. In particular, the level of a person’s financial education is something that will help or hinder someone throughout their life. A bad financial decision at a young age can land someone in massive debt for a long time; Student loan debt has been a big political issue recently.

There’s no easy solution, but if financial institutions can help customers avoid mistakes everyone stands to benefit. A big part of this will be to innovate with the services that a bank or CU offers online.

Young people like to solve problems online. That’s where they get their answers. They research problems and look for facts in order to make smart decisions.

Financial institutions should be offering up these answers through their websites. If they deliver the content of these answers in the right way they stand to generate more sales.

Answers should be simple to understand while doing more than outlining a concept. Someone who understands how health insurance works in concept might not know how to pick the right plan for their needs and budget. Banks and CUs can use educational opportunities to connect customers with advisors.

Learn tips for providing the answers that customers are looking for (in a way that drives sales) in our next 30 minute workshop


Chase Bank and the Fantastic Future Branch

[Update: We misreported a statistic regarding Chase's branch traffic. We originally reported that only 55% of customers had been to a branch in a given quarter. This statistic actually represents traffic for commercial customers. We're looking into sourcing a figure that represents household customer traffic and have updated this post to better represent the cited figure. We apologize for the miscommunication. -Ed.]

Chase Bank recently released an earnings report which outlines the success they’ve had with digital banking and their vision for the future of branches.

Increases in digital banking and decreases in branch transactions have made them orient themselves towards sales-focused branches while relegating day-to-day transactions to online, automated services.

 

How Chase Bank is Redefining the Branch

 

  • Optimization of branches for sales:
    • more offices
    • more advisors
    • fewer tellers
  • Rationalizing cost structure through:
    • Digital self-service
    • Smaller branches with less density
    • Automation of processes and control
  • Consolidation of operating centers
  • Optimization of branch network based on
    customer needs and branch usage trends

 

Their total amount of branches has been shrinking for the past few years, however they’re not expecting to eliminate any more for the time-being. Their future branch network will be predominantly office space. You might have 3 advisors in a branch, but only 1 teller. As day-to-day needs and customer service becomes largely digital, the focus of the branch will be on sales.

The Important Numbers

55 quarterChase Bank card sales in branch
Chase Bank branch mortgages
 
 
 
 

While day-to-day foot traffic in branches reduces, sales efforts in the branch show strong return. People might be moving to digital for simple transactions, but when they do come to the branch they have a high chance to buy.

 
 
 
 

What It Means Industry-wide

The traditional branch is going to evolve over the next few years. It’s been reported that as much as 34% of adults haven’t been to a branch in 6 months or more! Digital log-ins are rising as people get more comfortable with the idea (and convenience) of online and mobile banking.

The unfortunate side effect is a more remote customer base. The banks that can’t get customers into the branch for sales will not be able to compete. So, as the makeup of the branch changes, the makeup of online and mobile experiences must change too. Banks need to offer richer online experiences that go beyond transactions in order to generate sales.


Join our upcoming workshop to learn how to provide engaging experiences!


A Simple and Innovative Bank Marketing Tactic

Innovative bank marketing through podcasts - via Wikicommons user: YagraphIf there was ever a marketing idea that was just crazy enough to work, it’s this one. Strangely enough, it’s not a particularly new idea, just one that’s being used by marketers in an innovative way. The podcast is quickly replacing traditional radio and some players are getting on board with innovative bank marketing.

For those not in the know, podcasts are like 30 to 60 minute downloadable radio shows. Unlike a radio show, you can listen to podcasts on your own schedule and bring them with you anywhere on your smartphone. These modern-day radio shows cover a million and one topics – everything from woodworking to dating advice, or even banking and marketing.

Podcasts have been around for years now, but have had one major problem: They don’t make money. It takes creators a lot of time and energy to put a show together and while some are rewarded with adoring fans and millions of downloads, there hasn’t been much money in it.

But that’s been changing. Some podcasts have cultivated audiences in the hundreds of thousands and podcast networks have developed which facilitate the marketing process.

Banking industry newcomer Simple has noticed the opportunity here and has started sponsoring podcasts with in-program advertisements.

While commercials are somewhat new to the podcast medium, that’s not what makes this tactic special. In many cases the advertising is done by the podcast hosts as part of the program and integrated with the hosts’ personalities. They don’t necessarily read from a dry script, but rather develop their own advertising stories within the show, working off a few copy points. The result is more creative ads that are better targeted to an audience. These ads become part of the show’s content and are seen as a differently formatted segment, not a commercial break.

In an hour-long podcast you might have only 2 minutes of ads – a far cry from television or radio which seem to constantly interrupt programming. Listeners become more engaged and are more intent on listening because these aren’t traditionally structured ads. The trade-off of 2 minutes of ads for 1 hour of content is more agreeable than a block of TV commercials, where a viewer might leave the room or change the channel.

In fact, podcast advertising almost harkens back to old-timey product placement in TV shows, where, for example, the characters would not-so-subtly enjoy some refreshing Poland Spring. Except this type of advertising is a little more off the cuff, a little more genuine, a little tougher to look at and say “oh that’s an ad I should ignore it!”

Marketers need to be aware of the opportunities these new types of media hold.

Click here to join us for our upcoming workshop and learn more about innovating with content marketing


Credit Union Marketing and Member Experience

credit union marketing should be shaped by user experienceCredit union marketing is about more than products. It’s about defining the individual identity of each and every credit union based on its own community, its own customers.

As CUs look for new ways to expand, grow their share of wallet and further benefit their community, they should be thinking about the member experience they’re providing online.

A CU’s website doesn’t need to lack the personal touch of the good-old-fashioned in-branch experience. Especially because it’s the preferred means of banking for many customers, elements of the online experience should recreate the personalized branch experience.

Customers are moving to online banking for one big reason: Convenience. It’s quick and easy to do a lot of day-to-day transactions. But there’s more that can be offered. Transactions are one-size-fits-all. Content is personalized. Personalized experiences can and should happen online.

“Content” can simply mean articles, tips, checklists, videos – anything that puts substance over function. The philosophy of content can be summed up in three words: Teach, don’t sell. Content should provide your customers with ways to save money and avoid mistakes without being an advertisement.

Content can be targeted to retirees, Millennials, home buyers and everyone in between. It can be educational or entertaining, but what’s most important is that it helps get customers connected with the people at their CU who can help.

A credit union marketing strategy that informs, educates and answers questions can show members that they’re valued. When it’s time to look for a financial product, people are under enough stress already! More than anything they want to make the right decision. Help make that easy for them.

A CU marketing strategy that’s seamless with valuable content provides a great member experience, conveys info about products and connects customers with advisors.

Click here to check out our next workshop and learn more


3 Important Website Tips for any Digital Credit Union

The role of the credit union branch has been up for debate for some time. Customers will always desire a physical location in some capacity, but the raw numbers show that branch traffic is decreasing while digital traffic is increasing.

It’s easy to see how a more connected, more digital credit union will be the future of banking in the CU space. Online and mobile banking provide unparalleled convenience for the customer’s day-to-day needs.

While the customer service and face-to-face interactions that a branch experience offers are important and will continue to last, all eyes should be on the role that CUs can play digitally.

Here are 3 tips for finding success on digital platforms:

1) Rethink your website

There are parallels to the branch throughout your website. An old homepage design can give the same impression as a dilapidated building. If it has been a few years since you redesigned your site, consider renovations.

Is your site easy and intuitive to navigate, or is important information hidden in sub-menu after sub-menu? Your customers shouldn’t have to traverse a labyrinth to find what they’re looking for.

Does your homepage showcase dynamic information? If your homepage isn’t updated regularly with new promotions or campaigns then you’re missing out on opportunities to connect with users.

 

2) Broadcast your message

Regulation and compliance have meant that the whole banking industry has been slow to adopt social media. Facebook, Twitter, Pinterest and other services allow you to reach large audiences frequently, including people who might not find you otherwise.digital credit union on wikipedia

It doesn’t take a big time investment to participate and with a little persistence and creativity you can accomplish great things on a shoestring budget.

 

3) Engage customers with content

Show your customers that you have more to offer than just transactions. “Content” is what fleshes out your website and provides an experience that isn’t product- or transaction-focused.

More than 1 in 3 Millennials view their financial institution as their PRIMARY resource for financial information (TD Bank). Customers of all ages could use content like retirement guides, financial planning checklists, or savings tips and tricks. These types of content can help people save money and avoid mistakes, keeping them engaged without a product pitch.

 

Stop by our next workshop to learn how you can get a boost to become a better digital credit union