The Bankwatch

In a post yesterday, Jim at Netbanker referenced NextCard [disappeared in 2002 due to underwriting issues].  I remember them well, and they were pioneers in terms of internet promotion, and online applications.

A Final Marketing Lesson from NextCard | By Jim Bruene on January 5, 2002 7:06 PM

Ironically, as we looked in on NextCard’s Web site on the evening of Feb. 7 to see if they were still taking applications, we noticed the company was using a simple, but very effective marketing tool aimed at gathering the email address of users which had clicked on the NextCard application, but had abandoned it prior to completion.

One key component was how they maintained contact during that all important time when for some reason users leave.  Management of that moment will only improve activation rates.

Users exiting from the first page of the application are greeted by a popup message offering various incentives to leave an email address for future contact. After 50 to 75 tests, we determined that the company was testing five different offers

Click through for full details on a methodology that is equally relevant today.

Hard hitting but very relevant post from John over at Socialmediatoday.  The current issues with Banks highlights the lack of credibility in traditional style advertising.  And its not just advertising, its the entire corporate presence.    AIG webs site says this:

The industry’s most prominent independent ratings agencies continue to recognize growth in terms of insurer financial strength. Our financial strength is our commitment to you that we’ll be there for you when you need us

The main page is running their latest ad here, and it speaks about ‘what we see’, has photo’s of football players, and is generally a typical wealth management type ad.  Time to get real.  Where is the comment to people speaking about what they are doing.  If I had an AIG policy, what are you doing for me – is my policy still working?  Simple basic comments addressing what people are actually thinking.  This is what people expect and what social media mean.  Talk to people and listen to people.

Anyhow, here are Johns suggestions and click through for the detail.

1. Stop your traditional advertising with your old campaign now

2. Make a commitment to educating your customers on personal finance

3. Whoever said corporate blogging is dead is an idiot – start a blog for godsake

4. Listen and react to your customers publicly

5. Advertise all of the above and build a strong community around your bank built on trust

Many of us complain about Microsoft, but this Arrington post at TechCrunch caught my attention because it highlighted larger picture of the environment of the company that appears not to see the competitive forces surrounding them.

Microsoft Annual Report

To sustain the growth of our Server and Tools business amid competition from other vendors of both proprietary and open source software, our goal is to deliver products that provide the best platform for network computing – software that is easiest to deploy and manage, and that is most secure – with the lowest total cost of ownership.

# of mentions:

linux – 9

Open source – 1

Live™ – 22

Business Description:

Client – Operating Systems

Our operating system products compete effectively by delivering innovative software, a familiar, easy-to-use interface, compatibility with a broad range of hardware and software applications, and the largest support network for any operating system.

Server and Tools

We believe that our server products provide customers with advantages in innovation, performance, total costs of ownership, and productivity, by delivering superior applications development tools and development environment, compatibility with a broad base of hardware and software applications, security, and manageability.

Online Services Business – includes Search, Live, Hotmail

We believe that we can compete effectively across the breadth of our Internet services by providing users with software innovation in the form of information and communication services that help them find, discover, and experience what they want online and by providing merchants with effective advertising results through improved systems and sales support.

Microsoft Business Division – includes Office, Sharepoint

We believe our products compete effectively with these vendors based on our strategy of providing interoperable, adaptable solutions that work well with technologies our customers already have.

Entertainment and Devices division

We think the Xbox 360 is positioned well against competitive console products based on significant innovation in hardware architecture, new developer tools, expanded revenue sources, and continued strong exclusive content from our own game franchises such as Halo.

In reviewing the five business divisions and their comments on competition, a couple of things stood out:

1. they do a good job at summarising the breadth of competitors
2. the comments on Microsoft’s strengths relative to the competition (shown above) are less clear.

Relevance to Bankwatch:

The general assumption amongst commentators today is that Microsoft is not well placed in Browser, Search, Online Advertising and future shifts of enterprise office applications into cloud computing environments.  What struck me in this brief review is that challenge is spread across three divisions, Client (Browser), Online Services Business (Search, Advertising), and Microsoft Business Division (MS Office).  This may seem rational at first because the nature of search/ advertising is different than office applications … or is it? 

I look at Google Apps, and Gmail, for example, and search is a key component of both.  Yet the Microsoft Search team are in a different team than the Office group.  But the real stunning point is that the Internet Explorer Browser, the fundamental requirement for all the pieces is alone in the Operating System division! 

This is an organisation destined to fail, because the components for success are not aligned.  Why am I commenting on this here, apart from the fact I care about Microsoft?  How well is your Bank aligned for addressing the components of future success?  Lets look at some Banking examples to wrap this up:

In your Bank …

1. who owns social media ?
2. who owns advertising?
3. who owns customer experience
4. who owns the web site – public
5. who owns online banking?

then .. in your Bank …

1. who is thinking and planning social media ?
2. who is thinking and planning advertising?
3. who is thinking and planning customer experience
4. who is thinking and planning the web site – public
5. who is thinking and planning online banking?

In times of disruptive competition, its worth looking at the world as others see it, versus how the old organisation sees it.

Internet has flattened old hierarchies, made information freely available, and eliminated distance. This is a revolutionary driver of customer expectations, and customer buying methods. It has also had the impact of opening previously closed kimono’s and exposed old style advertising for what it is … management of peoples opinions. Internet has allowed people to form their own opinions, and act on them.  That empowerment is fundamental to many changes we see now.

One market driver is therefore ‘customer empowerment’.

Another driver, comes from the way customers are continually required to manage their own affairs, at the ATM, the pin pad, online banking, bill payments, office card access, airport check in, car rental drop off, quick hotel checkout, travel booking. This frequency of self service is now pervasive and required several times daily for everyone. Organizations have become impersonal and are represented by their self service touch points. Self service has been underway for a long time, and internet has only sped up that process for Banks’.

Customers appreciate self service, but the sheer pervasiveness of it, means customers are continually, comparing and evaluating it. Without realizing it, customers are comparing your bill payment web process flow, to the Hilton quick check out, the credit card pin pad machine to your ATM, etc etc. People do not interact with products; they interact with self service touch points, and that is where the value is experienced, or value is lost.

So our other main driver is the advent of ‘the experiential economy’.

While Banking has benefited from technology advances in information management, and elimination of human processes, it has absolutely not addressed these drivers.  Bank motivation has been entirely financial driven by the vagaries of the quarterly announcements and the impact on stock prices.

Banking has benefited from detailed analysis of customer behavior allowing enormous profits on credit cards through targeted marketing, and portfolio management of card holders supported by high interest rates.  However banking has suffered from having to bear the additional costs associated with the new technologies, and in particular the plethora of new channels, including direct mail, ATM, telephone banking, online banking, and disruption in traditional marketing channels.

Relevance to Bankwatch

How has your Bank adapted to customer empowerment within the online experiential economy?  This would involve re-thinking marketing tactics, site design, and even branch personnel training and tools.

James has a good post on the shift from traditional PR to Community Management, and he explains that mechanics quite well. His example of Debbie at Wesabe is an ideal one.

BankerVision: PR shifts to Community Management

One final question is in my mind, though, is what use HSBC’s or Citi’s Community Outreach Coordinator will make of a competitive bank’s blogger like myself? Will they just ignore me, or take a leap of faith and realise that the community is powerful regardless of who is in it?

Relevance to Bankwatch:
His final paragraph says it all. With the lone exception of Ed Terpenning at Wells Fargo, where are the community managers at the big Banks? I know a large part of the reason lies in the fear of loss of control of the message. Any Banks care to comment?

Well stated conclusion on this study of US Bank brands. This particular quote resonates:

Banks currently define themselves and their brand in terms of commodity products and expect customers to switch banks so that they can have “all the things they currently get from their current bank.”

The piece is full of memorable quotes, and goes on to say

What banks need is a new brand promise, one that is a reflection of who the target audience is when they use that bank and is positioned against the competition. The problem now is that the players in the market say the same thing so they are not positioned against anybody

Finally, here is their “take the test”. Their point is that the statements apply to all Banks, and are instantly recogniseable.

Stealing Share | Increasing Market Share | Brand Company | Bank Study

Is it as bad as we have said? Take the test. Take any bank you can think of and insert its name here-

* (Insert Bank Name Here) has many ATMs
* (Insert Bank Name Here) has convenient hours and locations
* (Insert Bank Name Here) has free checking
* (Insert Bank Name Here) has friendly employees
* (Insert Bank Name Here) has online banking
* (Insert Bank Name Here) has credit cards
* (Insert Bank Name Here) gives you more
* (Insert Bank Name Here) really wants my business
* (Insert Bank Name Here) has competitive rates

The last time I saw this style of marketing was the telecoms back years ago when they were slamming customers; that involved automatically giving people new services, and if the customer did not cancel, they then continued with the new service and the new fee structure.

Today a family member got something in the mail from BMO Mosaik Master card that read:

Complete and return this form today to continue benefitting from the BMO Mosaik MasterCard CardAssist Plus Service without interruption

Note the key words ‘continue‘ and ‘without interruption‘. Also note the entire package was in a pull apart envelope thing designed just like the kind of serious confidential mailing that is used for Bank Card pin numbers, or new credit cards.

There is one problem …. said family member does not have the CardAssist product, whatever that is. Yet response is required to ensure no interruption! On reading the small print, family member has been set up ‘free’ for two months until August 24th, 2008. I think no payment is required for the service if no response is sent in, but to be honest the package was so convoluted and confusing, I will be checking in September to ensure that it is in fact cancelled.

This is just awful marketing of the worst 1990′s kind. That card company has millions of customers. Clearly the the intent is to have x% of customers send this package back in just so they are not interrupted in their service, and the Bank will gain by $39.99 annually in new fees.

New marketing, and customer expectation has moved on and its sad to see that there are some old style marketers still out there. Time for BMO to get a new agency methinks.

This from Rahaf blogging from the searchengine strategies conference highlights what I think of as the dark side of SEO, and social media marketing. It lists all the bad ideas, which can be summarised as anything fake or pretending to appear to be something. Its about meaningful conversation, and trust. Click through for her principles.

» Blog Archive » SES & Social Media Strategy: what happened to ethics?! (A rant)

The internet has a short attention span and a long memory. Be smart. Treat your consumers like idiots and they won’t stick around for long.

A very full and complete article on the power of search and relationship to purchasing. The lead stat is the fact that 28% of clicks on a Google search page go to the paid search items.

Click through for Joey’s excellent summary of Fredrick Marckini’s keynote presentation at searchengine strategies conference in Toronto this week.

» Fredrick Marckini’s Keynote at Search Engine Strategies 2008 Toronto » The Adventures of Accordion Guy in the 21st Century : Joey deVilla’s Personal Blog

72% of all clicks were in the natural results section; the remaining 28% were in the paid.

Jeremiah analyses Obama’s internet success that I’ve blogged about before.  No question he has grasped the internet high ground …. new vs old.  Lessons to be learned here.

Web Strategy

….  data using free social media tools, that look at keywords on twitter, as well as ‘traffic’ to websites of the runners. I rarely place much weight in any single use of these tools, but there is a clear trend towards Obama getting a great deal of activity. Is this telltale to the future? I’m not sure.