What if instead of all these carefully controlled studies and crafted messages, businesses just talked to customers and let them tell their own stories? What’s the worst that can happen?

Source: The Marketing Consortium : Brand Positioning in the Age of Social Media

So I was ecstatic to see this one from Christopher over at the Social Customer Manifesto.

So, the two big questions:

1. Q1: Who controls the interactions between vendor and customer?
2. Q2: Are the interactions focused on transactions or relationships?

Source: The Social Customer Manifesto: VRM Scenarios

This is relevant to Banks.  Online Banking is way over on the transaction side, and Banks (online) are really no-where on the relationship side.  Similarly on the vertical, (Vendor means Banks here), control is on the Bank side. 

So that places Banks in the lower left quadrant.   Remember Minority Report?  Tom Cruise walks into the Gap, and is instantly recognised, and an ad is spoken to him based on his Gap profile.  the Gap decided on that ad .. Cruise had no control over it – this is ‘facist’ marketing with all control divested to the corporations.  Marketing that is intended to shape you and tell you what to think.

Anyhow, Christopher does a fantastic job of describing the four quadrants, that I can’t improve on.

Where is the optimal quadrant?  To me the answer is clear – upper right!  Reason:  Here is Christopher description:

The customer owns her own information, and does with it what she pleases. In some cases, anonymous transactions are conducted, but most interactions happen with trusted vendors with whom the customer has dealt over time. The customer chooses vendors based on interpersonal empathy and affinity, as well as technical capability

To me this is the only vision that works.  The problem is that customers do not own their own information.  The opportunity for Banks is to fill that void by giving control of information to customers as if they did own it.  This would be responsible, and would gain enormous customer credibility.

Trey, Brent and the team at Trabian continue evolution of web 2.0 thinking, that aligns perfectly with the Credit Union business model, and pulls the CU’s even further ahead of Banks.

To celebrate this year’s 21st anniversary of Martin Luther King Jr. Day, Oakridge will be putting on a park clean-up day at Horton All-Sports Park. The focus for this year’s MLK Day project is to provide a safe place for kids to play.  This event will provide community members and organizations a day to come together and serve their community for a greater good. Tools and projects will be provided. Lunch will be provided for this event, as well as t-shirts and beverages. Bring working gloves and smiles.

Source: My Community Connection

‘Give with us’ is described on the blog this way.

The concept is pretty simple in that each Give With Us partner receives a branded website where volunteer opportunities in their community are posted. Take a look at selco.cugive.com for a prototype used by a Filene i3 project team.

Each Give With Us site can be fully controlled, moderated, and edited by non-technical staff at each participating credit union or non-profit. If you’ve got a volunteer coordinator or public relations manager, they’d probably make a good Give With Us administrator. (The tools are web-based and very simple, and we’ll be posting demos here soon.)

Jim at Netbanker does a review here.  (note Netbanker is having CSS issues, so that link might change).

Relevance to Bankwatch:

A clear theme has developed here.  Credit Unions, supported by efforts of people like Trabian, are leading the Financial Services charge to Web 2.0 (I know we hate that expression now) type services, with small, iterative and creative moves that align nicely with the Credit Union business model.  This will cement and further enhance their customer loyalty. 

Side note:  the opportunity is there for small regional US Banks to do the same.

John Moore points out the reason, which bears out the promise of Tara’s marketing philosophy - pinkomarketing.

It’s just one more reminder that Starbucks spends its advertising dollars on making better products and better customer experiences and not on making funnier television commercials.

In fairness Bankers are not alone in their industry view of the world.  Anyhow, in preparation for LIFT07, I got to thinking about why Banks are having such trouble breaking out into the internet space, and with something that’s probably obvious to everyone else, I compared to others in different industries.

The well known, and two not so well known, (but will be well known), online names that are successful, are successful for a reason. 

In simple terms they made it, because they brought an innovation … a new element, a combination of not just self service, but with added value.  The key being added value that made the online self service, experience worth the customers effort. 

At its simplest, online is merely self service, but that’s kind of boring if there is nothing in it for the user.  Why should I do it myself when you (the Bank) are getting the benefit (cost reduction)?

So lets consider some big names, with undisputed business success, and their online angle that makes them valuable.  As I read the list, I thought of it this way … what does Amazon sell – books? really?  How about eBay … do they sell online auctions?  (note I omitted social networks until they prove a business model – I believe social will work when its tied to a successful financial model, such as Amazon, Flickr, and eBay have already done)

Amazon	Collaborative Filtering
eBay	Reputation
Google	Finding others’ information
Yahoo	Finding Yahoo’s information
MSN	Teens/ youth
Flickr	social photo’s combined with control & ease of use
37 Signals	Simple and incredibly useful
S3	Cheap and efficient – your virtual hard drive
Banks	online ATM – dumb terminal (pardon my bias)

  My take:  they all (except Banks) sell something more than the basic service provided. 

• Amazon sell comparison service, and convenience
• eBay sell trust
• Google sell reliable information
• Yahoo sell consistency
• MSN sell youthfulness
• Flickr sell control and immediacy, along with dissonant innovation. For example, – Information on which camera’s are used & ranked. What’s the odds the camera manufacturers are taking note of that, and what’s the odds none saw THAT coming! 
• 37 Signals sell simplicity, and cross channel utility
• S3 sell computing as a utility, at a very low price (for those who are curious, check out the owner, and consider if they are a book seller, but we digress).  If you are interested to pursue this thought go here.

These online brands have differentiated themselves from the competition.  These are brand names that are universally known (last two will be known).  The premise is that anything that hasn’t established a point of differentiation online, versus paving old cowpaths, is doomed.

The poor old Banks … held up as one of the most successful online ventures have none of that innovation.  They have automated that which was handled by tellers, but little more.  We see signs on the edge … such as Wells Fargo with the spending reports, but not much more – mostly just hard old style defensive marketing. 

Following that premise, are Banks are destined to go the way of the corner book store, and the paper encyclopedia? 

The innovations appear to be coming from vendors such as, Cashedge, Corrillian, OneVu, Scivantage, eFunds, S1, Andera, Accenture, uMonitor, and Infosys … to name just a few.  None of these are Banks.  The innovation is coming from providers of services, and Banks are buying those services at a rapid pace. 

But none of this activity is Bank business model changing or differentiating. 

Relevance to Bankwatch:

 Where is the point of differentiation that sets a Bank apart from the competition?  The pieces of Banks’ strategy are remarkable similar, and the analysts perpetuate this approach.  Words such as:

• multi channel strategy
• channel integration, and optimisation
• customer segmentation
• product simplification
• customer centric
• putting customers first

How can a Bank go online, and set itself apart?

The new TTC chairman, Adam Giambrone, seems to have accepted the challenge. Today’s Globe and Mail reports that he will be meeting with the bloggers to discuss their ideas, and a new site should be up and running by the summertime. !!!

Source: Customer Experience Crossroads: Co-creating with your customers: a TTC story

This is unrelated to Banking, but highly related to the point that even though customers have been totally frustrated with transit maps and web sites for years, the TTC did not hear.  Social media is different – now corporations are starting (slowly) to realise that listening to people is essential and replaces the old way, of corporate speak.  Like someone once said; its really hard to listen when you are talking.

Kudo’s to TTC and I hope they follow through.

The article points out that online ad spending as a percentage of budget in the UK, is double that of the US.

In the following year, Britain overtook the United States, and it has not looked back. In 2005, nearly 8 percent of British ad dollars went online, compared with 4.6 percent in the United States. And, this year, the two bureaus say, the Internet will account for 10.5 percent of British ad spending compared with 5.6 percent in the United States.

Source: The Future of Web Ads Is in Britain – New York Times

One key point is made at the start of the article, and that is the fractured market in the US, and I would think the fractured Banking space also contributes.  There are something like 7K banks in America, vs 4 big ones in the UK, and a few other brands, but many of those are owned by the big ones, such as Woolwich owned by Barclays. Anyhow the budgets are concentrated.

There are big differences between the advertising markets in Britain and the Unites States. In Britain, much of the advertising is national, while there are strong local and regional ad markets in America.

But there are more fundamental differences that support the differences too:

More than their American counterparts, British marketers seem to have bought into the oft-touted benefits of Internet advertising: that it is easy to track, enormously effective and a relative bargain. In Britain, as Internet ad spending surges, the overall advertising pie is not growing much at all, and traditional media are the ones losing out.

However, British media are nearly all aimed nationwide in contrast to the United States newspaper and television markets, where local and regional markets are big players. These local markets in the United States have, so far, been slow to move ad money online.

Big British advertisers have also been quick to jump at the opportunities provided by paid search advertising, like that sold by Google and other search engines. Search accounts for 56 percent of Internet ad spending in Britain, compared with 42.5 percent in the United States, according to the Internet Advertising Bureau. “We’re all searchaholics,” said Guy Phillipson, chief executive of the bureau’s branch in Britain.

And internet access types also contribute with broadband more supportive of flashy advertising:

Similarly, broadband access in Britain at first lagged access in the United States, but has since surged. In 2002, 15.7 percent of American households had broadband compared with only 5.1 percent of British homes, according to eMarketer. This year, Britain is ahead, with 47.4 percent of homes having broadband, which is more than the 43.9 percent in the United States.

Then there is the more experimental and liberal approach accepted by Brits compared to the conservative Americans.

Some analysts say British advertisers may simply be quicker to embrace new marketing ideas than American companies. “I’d like to think there’s a cultural factor in the U.K., where we’ve been a bit more experimental on some of these things,” said Rob Noss, European chief executive of MindShare Interaction, a new media division of Group M’s MindShare unit.

In the United States, major advertisers are more dependent on traditional media, particularly television. The top 50 advertisers in the United States spent just 3.8 percent of their budgets in the first half of this year on online ads, excluding search-related advertising like that sold by Google, according to data from TNS Media Intelligence.

In terms of Banks, and financial services, they have been particularly aggressive in the internet space.

In contrast, large advertisers in Britain appear to be leading the push onto the Internet. British financial-services companies have been particularly aggressive online spenders, in some cases allocating 30 percent or 40 percent of their advertising budgets to the Internet, Mr. Noss said.

This is a consequential shift relative to the US, with TV close to taking second place.

In Britain, analysts predict that it will not be long until Internet advertising catches up with TV advertising. Group M, for instance, says the Internet could account for 25 percent of British ad spending by 2010. That would place it ahead of television, which accounts for just more than 20 percent now.

But of all the stats, remarkable as they are, this one amazed me the most, namely internet usage hours.  UK is almost double their American counterparts, according to Citigroup.

On average, Britons spend 23 hours a week on the Internet, according to the Internet Advertising Bureau. The Internet accounts for about a quarter of Britons’ time spent with all media, according to Citigroup, nearly double the percentage in the United States. Americans use their computers an average of 14 hours a week, according to Nielsen Media Research.

For the final comment on this, I will go back to the first statement in the article.  Terry Semel of Yahoo seems to be working on the assumption all this is linear, and that the US is just behind UK. 

Still, some believe that online advertising in Britain provides somewhat of a roadmap for where online ads in the United States and elsewhere may be heading. “The U.S. is so behind,” said Terry S. Semel, the chief executive of Yahoo, in a recent speech in London. “It’s certainly lagging the U.K. by at least a year or two.”

Where does this leave us … I would not assume the US space will evolve exactly as the British experience.  If in fact the fundamentals are the root cause, the fracture markets, the fractured Banking system, then the logic that the American market will simply follow is flawed at best, and a dangerous assumption that could take marketers off track at worst.  Then layer in the natural conservatism that exists in North America (I include Canada) and a more plausible direction is unique evolutions in the respective markets.

I think the markets on either side of the Atlantic will evolve separately.  The only comparable will be closer alignment of internet usage – to me that’s a given.  But the extent and the way it is used is a different story, and the very differences we see so far in acceptance and usage of advertising is telling, and probably has implications for how social marketing might evolve.  That requires more thought, and for a future post.

Its not an insignificant question.  The fact is that the newer things are the more they stay the same (or something like that).  So why might marketing be different.

What’s interesting is this approach is a perversion of something that started out very right. That original idea was the notion of customer focus-the idea that every customer is unique, and that if we as producers can customize all the way down to the level of individual consumer, then we can provide value and specialness to best serve buyer needs.

Nothing wrong with the idea. But it too often falls down in execution because it gets polluted by motives.

It make perfect sense when we first started to think about it, that marketing 1-1, at the right time, to the right person, at the right place (channel).  In fact thinking carefully about it that remains pertinent. 

The issue is that we (the Bank) don’t know the right time.  We can get the right person, and the right channel even, but the timing is always an assumption for us.  We have to extrapolate that when a customer clicks, or appears to read, or uses a tool, that they are interested therefore we can “sell” them.

I think there is a deeper change happening here that internet has brought about.  I spoke of it here.  Internet has brought a generation of people use to controlling their media.  It is no longer acceptable to provide interruptive marketing. 

No matter how customer focussed we are, customers don’t want that attention in that way.

Web 2.0 is about empowerment, collaboration, conversation, sharing.  Interruptive advertising doesn’t fit that model.

Conversational Marketing. The insight driving the idea is deceptively simple: if consumers go to blogs to be part of a conversation, the ads should invite them to enter a conversation with the marketer.

Source: Cymfony’s Influence 2.0: Great Ideas I learned in October — Part 3

The link above goes to an August piece by the title conversational marketing.  It quotes Tom Troja and Tom Hespos.

Conversational Marketing, explains Troja, “is the marketing strategy of connecting directly to the marketplace through online conversation. It is a direct and completely transparent interaction with customers, potential customers, brand fans and brand detractors.

Key for me here is the degree of focus. The focus is not on a segment … the focus is on interested people.  Their interest could be positive (customers) or negative (brand detractors) but the key is that only interested parties are engaged.  This dramatically increases the quality of the interaction, and the responses both from the customers, and from the company will have relevance.

I see this as a component in the methodology to work towards new marketing/ pinkomarketing.

The above are probably just the tip of the iceberg. I envision a day where you can search your social network to find and see what products others who you know own -and- whether or not they like them. Moreover, you could learn about the people you don’t know when they recommend a product (which you don’t know now on -traditional- shopping engines). With this information, you could make a more informed buying decision about products you are considering - and keep up to date on the ones you don’t yet know you should be buying. This info would more than just allow individuals to keep up with the Joneses…..

True social commerce would provide consumers with rich social context and relevancy to the purchases which they are making.

Source: Genuine VC: (The Beginnings of) Social Commerce

It touches on the core of the community of interest driven marketspace, vs the brand driven one.

Well after we got through the usual, and well deserved, ”you really don’t get it, do you!”, we got to the meat of it. 

• Japan:  customer is always right.  Employees when confronted with an upset customer genuinely feel personally accountable for the fact the customer is upset.  This is genuine reaction, and I have seen it in Japan enough times to know this to be a fact
• North America:  employees are always right.  When pressed, employee will almost always get defensive, and suggest/ tell/ indicate the customer has some accountability in the matter

This is a market shaking big deal.  You have to see this to believe the difference … some examples I have personally seen:

• a banker on his scooter arriving at a house to pick up a deposit
• an electrician arriving in uniform, to deliver and install a new washing machine.  Shoes are automatically removed.  Bows exchanged, and apologies made before he begins for the trouble he is about to cause,  (recall, we ordered the washing machine)
• local noodle guy delivering lunch of noodles and dumplings, again with bows, and apologies for the intrusion … (we ordered the noodles, which are exquisite by the way)

Japan has a culture of customer service.  We gaijin (foreigners) have a culture of various characteristics, but customer service isn’t a natural one.  We have an inbred desire to be first.

We all assume Japan is a technology culture.  Wrong.  Its a customer service culture.  Advanced technology is merely a by-product of the true culture, and the high expectations that a customer service culture produces.  Its not companies who are listening to customers;  it is employees who are listening.  Very cluetrain ish.

There are lessons to learn here.

I took a deep breath and read on, and it started to talk about the role of each channel in the marketing process.   

But it is important to understand that in multichannel campaigns, each channel and component of the campaign should not be expected to deliver equal results. In a multitouch campaign, for example, the first contact — regardless of the channel selected — may not make the sale. “One channel can help you warm up the lead or determine who will be a good candidate for your services,” says Wrich Printz, CEO of L2, Inc., which develops management software for multichannel campaigns. “You have to understand how each of the [channels] you’re dealing with contributes to the campaign.

Source: You Talkin’ to Me?

Then I read on, and the article lost me again.  The whole thing is about bombarding customers into submission.

Today relevancy is imperative. But it’s also not enough. To break through the clutter, organizations need to market to customers using not only custom communications, but also targeted marketing that is integrated across all channels.

And this is from Peepers & Rogers.  I was referred to this page, but I won’t say from where, because I was so disappointed.  This is exactly what is wrong with marketing today.

This is about telling, and listening is not even mentioned here.

Ultra-simplification

• Radically reduce offerings and deliver critically important subset of features
• Examples: JetBlue, ING Direct

Online infusion

• Redefine offering by incorporating interactive features into the core product
• Examples: Netflix, Disney Mobile

Value repositioning

• Getting your customers to think about you differently
• Examples: UMPQUA Bank (treats banking like a retail environment, kid-friendly), Post cereal (postopia.com–can’t compete with Kellogg’s for marketing budget, but innovative integration between store, box, and online)

Source: Forrester’s Consumer Forum Blog: Your Company Can Differentiate Its Customer Experience Without Being Starbucks

And the guidelines.

Obsess about customer needs, not product features

• Clearly identified target customer segments
• Customer insights drawn from ethnographic and qual research

Reinforce brands with every interaction, not just communications

• Brand is well-defined and communicated to customers as a set of values
• Westpac (“You said…Our goals”)–”Ask once effort”

CXP as competence, not a function

• Execs are involved, not just “bought-in”
• Employees are engaged in, not mandated into, the process

Banks’ disinclination to compete on price is generally tied directly to the paucity of analytics and rigor in their pricing computations

Source: Enterprise Decision Management – a Weblog: Automating and improving pricing in banking

I agree with the statement, but would argue the the connection is not direct.  There is another element at play and that is commoditisation.  I commented on the post with:

“If all bank products look as identical as copies of the same book, then the only differentiation is indeed price”

I plagiarized this quote from Aneace’s Blog, because its perfect description of commoditisation.  While I absolutely agree with the characteristics of the decisioning mentioned above, I worry that this approach would need to be combined with creative development of innovative banking packages, that look different than the competition.

Without differentiation, and the value that brings, the price of commoditised products and services will be market driven only.

As much as pricing needs to be personalised, Bank services need to be personalised too.

Relevance to Bankwatch:

Its really hard to differentiate on a product by product basis.  A mortgage will always be a mortgage.  I believe differentiation must come from the organisation itself and the value it provides to the customer.  That value must be more and broader than a better rate.

I don’t mind marketing at all, but I want to see it coming. I want to know that when people respond to me, it’s really what they believe. I don’t want to spend time reading and writing and at the end the day, wonder how much of the interaction was real. I don’t want to be a part of the buzz.

Source: Burningbird » Mix and Match

She goes on …

Conversely, I want people to know when I respond to them, positively or negatively, they know I mean it–that I’m not playing a game. I won’t say anything in an email that I’m not willing to say in my weblog; I won’t say anything in a comment I won’t say in my weblog.

Its a heartfelt post that represents the what marketing has got to get its head around.  Its just not the same anymore.

And finally …

So maybe what I want is: don’t sell me stuff all the time. Don’t sell me the next best future; don’t sell me the next greatest start-up that combines letters into a meaningless word. If you want to market, great, go for it. But if you want to have a ‘conversation’, then leave the market speak at home. Markets are conversations–please stop. I’m begging you.

I don’t even care if you’re completely truthful or 100% honest–a really beautiful lie works for me. All I care about is that you’re real. Don’t pull me into your marketing. I don’t want to be there.

For a generation or more, PR has been about spin. Finding a clever story angle is what PR people are trained to do. Marketing is the same, except they call it “positioning”. Each new strategy starts from the basic premise of how to magnify the positives and deny any potential negatives.

Exaggeration, careful selection of facts, and creating enticing ways to present the messages are not only accepted, but the fabric of every day work. In advertising, they are limited only by truth in advertising laws.

Source: Cymfony’s Influence 2.0: The REALLY BIG story of the Wal-Mart/Edelman fake blog situation

Read this article in full.  Even if you are not familiar with the Edelman situation.  Essentially it was a blog written by an Agency, pretending to be written by regular people.  They have, according to Strumpette:

Within the past year alone, Edelman has:

• Engaged in secretive dialogues with carefully selected bloggers with the intention of slipping uncredited, Wal-Mart-approved spin into their seemingly spontaneous utterings;
• Offered unspecified emoluments to a consumers’ right website in return for their agreement to “stop writing about our companies,” including Wal-Mart;
• Surreptitiously sponsored a blog by two seemingly ordinary Americans of their vacation tour of Wal-Mart’s parking lots, neither of whom disclosed their ties to Edelman.

And Hugh sums it up perfectly.

It’s time to tip the scales, I think. I wrote a little post over at the CA Blog about our core philosophy and why we are more concerned with our clients’ clients than our clients. In a world that conspires against the ‘consumer’ (‘buy our stuff and shut up’ and ‘we care about you, really, okay we don’t, but we’ve paid a lot of money for this creative, so that you will think that, when we really should have put the money into replacing those crappy parts or empowering customer service to help you’), we are betting the bank on consulting our clients in the other direction.

Source: ::HorsePigCow:: marketing uncommon: Fake Blogs and the State of our Economy

This is timely with our discussion about Building the Bank of the Future.  In my poor attempt at a picture (I need help Tara), the point is that Banks cannot make it by restricting online acidity to automation of Branch transactions.  This does not deal with the emotional side of the customer relationship equation.

If that experiential line is not done with heart, and merely replicates old marketing, then that Bank is done for.

Relevance to Bankwatch:

Social networking is critical, but will require CEO approval, and fundamental culture change at most Banks.

This mythical age of banking may have never truly existed, but we seem to be moving further away. As banking moves online and credit scoring replaces reputation, banks sacrifice the human touch.

As community dissolves, banks lose. We are still highly trusted, but there are fewer places to apply that trust.

Mike goes on to bring in the Social Networking/ Web 2.0 concepts as potential replacements for the local branch in establishing that connection.  I buy that, and commented ….

I think all is not lost. The tools and concepts embedded in Web 2.0 and in particular engaging customers at an emotional level over the web is a start. Its just that Banks till now believed all they had to do was put all their transactional capability on the web, and everyone would be happy.

Perhaps we are wrong, and people will always want the local banker at the branch.  That’s possible, but watching Gen Y and Gen M suggests different. The key is that Social stuff has to be done with heart and feeling.  It cannot be faked. The now famous Edelman example falls into the fake/ corporate blog category.  Just as a branch manager with a flippant attitude will not be trusted, there are attributes for blogs, and social sites that must engender deep confidence, and respect.

I wanted to highlight a couple of great posts that I really appreciated. They are all about building the bank of the future, and what a great title!

James at EDM paints a nice picture of the customer experience within several channels, including ATM, online, branch etc.

Phil at Improving New Account Opening does a nice summary of the concepts that drive a consistent multi channel experience.

I took a different tack, with my small attempt to encapsulate Web 2.0 concepts as design principles for the future bank.

This is brilliant … I appreciate how those three posts complement each other.  The main reason they do, is because they are all about the customer experience, and turning the Bank inside out.

Lots more to come!!  Thanks James and Phil!

My belief is that there are simple staged elements that can be adopted that will engender internal confidence while producing satisfaction for customers.

The definition of web 2.0 and why it matters

There is only one definition, here, because O’Reilly invented it.  You can agree, disagree, debate, but that’s the definition.

It matters, because, wordsmithing aside, it loosely defines the resurgence of the web, following the 2000 dot com crash, and the following 3 or 4 years when business decided online was a fad.  It was all about business value, and Internet was an empty promise.  Well, meantime Amazon, eBay, Google proceeded to successfully build.  In parallel many smart people worked quietly in apartments, and basements, building web applications.  This is the first real shift in my view – the use of web as an application.  Examples are writely (now Google) and zoho.  Forrester called it the Xweb in 2000 before it was built.  I remember this article well, and frankly didn’t get it, but I knew there was something there.  Kudos to George Colony, because he was predicting web 2.0, 5 years previous to O’Reilly.

The second parallel shift, was the use of interaction.  There had long been talk of community, but with scale of many users, as Internet grew in the early 2000′s, grew online forums, based on common interest.  This could be people complaining about Bell Canada, the Post Office, or dare I say it Banks.  There were forums on stocks, and investing, restaurants, hotels, travel.  Sites sprang up to support these common interests, such as chowhound, and tripadvisor.  Finally blogs have become core to the web over the last 2 years.  Everyone reads blogs now, whether by accident or design.  If you search you end up in a blog at some point.  But the power of interaction, the the natural formation of communities of interest through blogs is fascinating and deceptive.  I know many people around the world now as a result of blogging.  I go to conferences, and feel I am amongst friends … yet I have not ever had dinner, or drinks with most.  We just have a common thread of interest, through posts, counter posts, and comments.

The third shift was the adoption of open source standards that reached critical mass, and the developer community behind it. Key here, were web services, and xml, that supported concepts such as tagging, ajax, microformats, openid, opml, rss, blogs, wiki’s, and in financial services, ofx, and ifx.

The convergence of these elements, web applications, interaction, and standards supported by critical mass of people online is where we are today.  We can debate my categorisation, and add/ modify/ but the essence is directionally right.  There is enormous promise, real promise for the web to become central to all our lives.  Its central to my life, and many who read this and other blogs, but we have to remember we are still the minority.  There is the demographic thing happening, that will take care of a fair chunk of the final shift but we also need much greater utility, integration and friendly tools.  The good news is that all those things are happening, at a frenetic pace.  The future of web 2.0 is assured.

Elements of web 2.0

Again, I will pull from the O’Reilly definition.  From a brainstorming session 2005 they developed a list, and this was a shortened version, suggesting the differences between 1.0 and 2.0.

In Colony’s 2000 piece he made a prescient point.

Many people think the Internet and the Web are the same thing. They’re not. The Internet is a piece of wire that goes from me to you and from me to 300 million other people in the world. The Web is software that I put on my end of the wire, and you put on your end — allowing us to exchange information.

In simple terms, the browser becomes the pre-eminent PC application, and whatever you need to do just happens inside it. 

O’Reilly came up with a meme map.

Finally, the essential elements of web 2.0 are contained in The Cluetrain Manifesto.  Its a terribly organised, but full of gems book.  There are 95 hypotheses, with some degree of overlap, so here is a relevant sample, which become principles. 

The Internet is enabling conversations among human beings that were simply not possible in the era of mass media.

Hyperlinks subvert hierarchy.

In both internetworked markets and among intranetworked employees, people are speaking to each other in a powerful new way.

There are no secrets. The networked market knows more than companies do about their own products. And whether the news is good or bad, they tell everyone.

What’s happening to markets is also happening among employees. A metaphysical construct called “The Company” is the only thing standing between the two.

Companies that assume online markets are the same markets that used to watch their ads on television are kidding themselves.

Companies that don’t realize their markets are now networked person-to-person, getting smarter as a result and deeply joined in conversation are missing their best opportunity

Getting a sense of humor does not mean putting some jokes on the corporate web site. Rather, it requires big values, a little humility, straight talk, and a genuine point of view.

Companies attempting to “position” themselves need to take a position. Optimally, it should relate to something their market actually cares about.

Bombastic boasts—”We are positioned to become the preeminent provider of XYZ”—do not constitute a position.

Networked markets can change suppliers overnight. Networked knowledge workers can change employers over lunch. Your own “downsizing initiatives” taught us to ask the question: “Loyalty? What’s that?”

Companies typically install intranets top-down to distribute HR policies and other corporate information that workers are doing their best to ignore.

Intranets naturally tend to route around boredom. The best are built bottom-up by engaged individuals cooperating to construct something far more valuable: an intranetworked corporate conversation.

Paranoia kills conversation. That’s its point. But lack of open conversation kills companies

You want us to pay? We want you to pay attention

Our allegiance is to ourselves—our friends, our new allies and acquaintances, even our sparring partners. Companies that have no part in this world, also have no future.

We are waking up and linking to each other. We are watching. But we are not waiting.

There are elements here that we call extract, that are re-usable for Banks, some being simple and can be done right away, and others requiring policy changes, and CEO approval.  Lets develop a list here.  I am starting with the web 1.0/2.0 table and moving through the meme, translating into relevant uses as I go:

Simple

• AdSense
• flickr & youtube
• bittorrent/ itunes/ podcasts
• SEO (Search Engine Optimisation)
• web services
• tagging
• syndication (RSS, podcasts)

Policy

• wikipedia
• blogging
• ajax:  rich user experience
• perpetual beta
• conversations

CEO approval

• wiki
• participation
• reputation: customers as contributors
• radical trust
• participation, not publication
• networked customers
• networked employees
• humble corporate values, and straight talk
• engaged intranets
• paranoia or openness
• listen to customers
• corporate irrelevance
• speed

Observation:  the elements of web 2.0 skew towards CEO approval.  Without having the CEO onside, and driving change, banks’ success will be limited.

Now that we have a few elements of web 2.0, we need to go through the exercise of developing implications, and examples for each.  How can these elements be implemented for your bank?

web 2.0 implications

I will go through each of the above elements, and try to develop examples of how we can implement those.  I won’t get in too deep on pacing, cost, or other things that frankly could get proprietary, and I might just want to do these myself!

Simple – your channel, or marketing group can just do it

AdSense

Go to google.com, and sign up.  Check your budget, and if necessary get a consultant to help.  Lots of advice, but bottom line is just do it.  To see how others do it, go to google, type in mortgage, and view the results in the right sidebar.

flickr & youtube

Talk to your corporate real estate group.  Get photo’s of all your branches, and stick them on flickr.  Decide on the tagging strategy before you start, so that its simple.  Place all TV ads on youtube, and link from your web site.

bittorrent/ itunes/ podcasts

Have your marketing group team up with external journalists/ pundits/ experts, and do podcasts.  Go video.  Audio is the easy way out, and not very sexy.  Make sure your site has an RSS/ podcast area, and link all to there.  Have all product groups link to that area.

SEO (Search Engine Optimisation)

Get a consultant, or a student.  Get help, to raise the visibility of your bank in Google, MSN, and Yahoo.

web services

 Technology implementations should use re-usable elements, that you can build once, and share across channels, and systems.

tagging

Tagging takes bookmarking out of each customers browser, and makes it network centric.  By storing tags, or memorable key words online you can access from any computer, and others can share in your tagging.

This begins to get at the essence of community.

syndication (RSS, podcasts)

The basics.  You must have this on your site – this is entry level, web 2.0 101.

Policy -you will need to talk to legal, corporate communications, information security etc.

blogging

Forget corporate blogs – I despise them.  And to aspire to be a Scoble at Microsoft is a bit lofty.  Look for someone who gets it, and can be your blogger, talking to customers, non customers, commenting on other blogs with a link to your blog.  Let him talk about what is good about your bank and what needs to be fixed.  Let it take its own course, trust it.

ajax:  rich user experience

If you are not planning to run online banking with significant ajax by 2010 expect to be left behind.

perpetual beta

Don’t start a project for Google maps linked to your ATM locator.  Get a student and do it.  Put it on your site as a beta alongside your current ATM locator until you are satisfied.  Same for branch locator, mortgage tools, investment calculators, bank account selector, etc etc.

CEO approval - stuff that’s just too outside what Banks do, and you feel personal risk by trying (PS .. if you are in a dot com company, you do these things first – at Banks we are opposite)

wiki

Develop a wiki, that lets customers design bank products.  You will be surprised.  As much as you will have extremists want everything for free, you will get sensible, creative, thoughtful ideas, based on willingness to pay.  I know this from experience, during the early direct banking days, when I personally chatted with new customers via email, about what we ought to to next.

participation

reputation: customers as contributors

radical trust

participation, not publication

These four concepts are similar, and almost are principles to govern how the other elements are implemented.

Relevance to Bankwatch:

This post ended up much broader than I expected, so I will link this is the sidebar near the top, and update periodically.

When Cammie Dunaway, CMO of Yahoo, during her keynote, asked the audience if they knew what Web 2.0 was, I estimate that less than 50 hands went up (or five percent)

Source: Online Spin » Blog Archive » Are Marketers Serious About Ceding Control to Consumers?

5%!  Its not that the question was wether they understood it … these are marketers and were just being asked if they knew of it.  They are marketers, and didn’t even lie about it!

Seriously this is highly indicative of the crisis that besets marketing departments.  What struck me is the emptiness of the words at the conference about “ceding control to customers” yet the best practices said something totally different.

Perhaps at the next ANA conference, we will see fewer presentations and “successful case studies” rooted in 30-second spots!

The question posed in the headline of Max’s post is likely the wrong question.

Are Marketers Serious About Ceding Control to Consumers?

A better question, with all due respect, would be, ‘what should marketers and marketing departments do differently’.  Here the lessons are all written out well in Cluetrain. 

A powerful global conversation has begun. Through the Internet, people are discovering and inventing new ways to share relevant knowledge with blinding speed. As a direct result, markets are getting smarter—and getting smarter faster than most companies.

Key words here are:

1. conversation
2. Internet
3. share
4. speed
5. smarter

Consider the 30 second spot against those words, and a simple pass or fail:

conversation	fail:  there are no opportunities for conversation in a 30 second spot on TV
Internet	fail: TV is not Internet
share	fail:  share implies two way, not one way
speed	fail:  it takes weeks or months to develop a 30 second spot
smarter	fail:  maybe partial pass, as in smart a@#

This is a loose, and somewhat tongue in cheek assessment, but the point is that traditional marketers can’t simply tweak current practices;  they need to learn brand new ones, and it remains to be seen how many existing CMO’s are capable. 

And as a number of speakers at our annual Masters of Marketing conference said, being in touch means giving up control. Engagement is the act of listening, sharing, creating a dialogue. It is not a one way conversation which we control.

Source: ANA Marketing Maestros: A New Way of Thinking: People Versus Consumers

The ten brands are:

1. iPod – consumer electronics
2. Viking – major appliances
3. Converse – athletic shoes 
4. Robitussin – cough & cold 
5. Best Buy – electronics retailer 
6. Kohl’s – department stores 
7. French’s – condiments 
8. Geico – insurance 
9. Dove – personal care 
10. eBay – online auction

Source: Landor: News: FORTUNE Magazine Publishes Landor Associates’ Second Breakaway Brands Study (9/12/2006)

Based on Landor’s assessment of the results, they concluded three elements were driving the success.

Landor’s strategic experts conducted additional analysis of the ten brands and found that each enhanced their dialogue with customers by embracing one or more of the following trends:

Building on a foundation of trust

This year’s brands earned their customers’ confidence by living up to their promises; in turn, their customers trusted and followed the brands as they diversified and moved into new spaces.

Cultivating brand communities

Leadership brands capitalize on the basic need for human connection by allowing enthusiastic customers to borrow the brand image to express a collective voice: The voice of a brand community.

Empowering customers with knowledge

The ten brands in this year’s list are arming their customers with information; by proactively educating customers, a brand can better manage its image and get valuable feedback in return.

These are powerful characteristics.  Its interesting to assess banks on these measures, and consider examples that fit the pattern.

Building a foundation of trust:

I think just being a Banks and having a vault is table stakes.  The old view that Banks were safe does not translate into trusted anymore.  I recently reviewed the matter of security guarantees and listed off the Banks by continent that offerred a guarantee.  But the real measure of Landor’s trends is the willingness of customers to follow the brand into new spaces. There are not too many examples I can come up with for Banks moving into new spaces to assess that.

Cultivating brand communities

I reviewed this here.  The list is getting long, but the real community efforts is short.

Here is the complete list, that I am aware of to date – please comment me with any others:

• VanCity: Change Everything
• HSBC: Your Point of view
• Wells Fargo: Student LoanDown & Guided by History
• Windsor Motor City Credit Union on MySpace
• ING Direct as noted (haven’t located it yet )
• ING blogs Asia/ Pacific and microfinance
• Savings & Loans Credit Union CEO Blog
• RBC Royal Bank of Canada nextgreatinnovator.com

The list of industry insiders is much longer, and you can get those in my blogroll in the sidebar.  Industry insiders – 30 +/ bank communities - 8.

Being true to the strategy and my own beliefs, means that a corporate blog is not the answer.  But a community or encouragement of community participation is absolutely on the cards.

As a proxy for that I tried Technorati and tried a couple:

Wells Fargo:  Student Loandown

Technorati:

The Student LoanDown

Search this blog

• Rank: 346,003 (36 links from 9 blogs)
• URL: http://blog.wellsfargo.com/StudentLoanDown
• Updated: 18 days ago
• Favorited by: 0 members

Then Google BlogSearch:

Results 1-15 of about 15 for ‘The Student LoanDown‘

Vancity: Are you ready to change everything

Technorati

“Huh?  There are blogs, and then there’s whatever you just typed in.”

and Blogsearch

Results 1-30 of about 310,417 but no mention of the Vancity site, except #6, which was my post on it.

Results – pretty dismal actually.  I am highly supportive of these endeavors, and wish for them to succeed as much as the people behind those ones wish to succeed.  I am being hard on them only because I want to see them succeed.

Empowering customers with knowledge

The final Landor trend speaks to openness and a culture of communication, learning, and conversation.  Most Banks interpret this as “learn more about” type links on their site.  Few go as far as ETrade in their customer advocacy efforts, by providing tools to permit self management of investments.  In effect they open up the smarts that used to come only with Investment Advisors.

ING may come close on this category, by painting themselves somewhat outside the typical bank, and poking at service charges, and inadequate interest rates head on.

Relevance to Bankwatch:

Generally a failing grade for Banks along the three Landor dimensions. 

October 5-8 The Ritz-Carlton Orlando, Grande Lakes, Florida

“Reinvention and Innovation” is the overall theme for this year’s conference. Come and hear how the foremost marketers are meeting the challenges–presented by a rapidly evolving marketplace–and improving their marketing communications processes. We will embrace and embellish the four core ANA strategic platforms:

• Brand Building
• Marketing & Media Communications
• Marketing Accountability
• Marketing Organization

Source: ANA Annual Conference – Masters of Marketing

When all you have is a hammer everything looks like a nail. That seems to be the case for the ANA.

Below are key talking points of ANA CEO Bob Liodice’s opening keynote speech at the ANA Masters of Marketing conference. The gist? The picture says it all, but it seems to contradict the overwhelming time spent playing montages of 30-second commercial spots to the audience in the main session. However, his focus on technology and corresponding four pillars for marketing reinvention makes sense.

Source: AttentionMax

I suspected this conference was in trouble, when I noted Steve Rubel post Live blogging from ANA.  There was no technorati tag, so I searched technorati and nothing showed.  hmmm

So I tried Google Blog search, and finally success.  This is where I found AttentionMax above.  But this just confirmed for the that the conference is missing something.  Sure the customer has control of the remote, but throwing more traditional marketing at them won’t solve it!

Anyhow, this post started to redeem the speakers at least.

AG Lafley on how to deal with the fact that the consumer is in control of media and advertising consumption: “We’ve learned a paradox that the more in control we are, the more out of touch we are with our customers.”

Linda Kaplan Thaler on why “being nice” is the next wave of consumer marketing: “Being mean is so last millenium. It only takes one person to take a company down.”

But then this post, that with great pride as an ex P&G’r spoke of the speech from Lafley, P&G President.  He spoke of media fragmentation, and technology explosion, then went on to list the consumer touch point examples:

TV – most powerful, highest reach medium; best vehicle to visualize and dramatize your brand’s distinguishing characteristic

• AG showed the new Pampers commercial that focuses on emotional vs. functional benefits. It shows the empowerment that a little boy feels when he knows when he has “gone”. This enables the relationship between Mom and child and Mom and Pampers to be closer

Print – this medium is all about the power of the big idea.

• Examples illustrating this point were Ariel and Vicks print ads.

In-store – this is where most purchase decisions are made

• P&G is placing Prilosec in the snack aisle because that is the “first moment of truth” (where they are making their decisions)

Packaging – primary communication and equity vehicle. It has arguably the highest reach, highest GRP and is almost free.

Hmmm … no technology there!

Finally, this one, who clearly wants to get it, but hasn’t yet.

Marketers have problems.  Why didn’t they invite Tara, to speak on her passion.

Anyhow, will watch for more posts over next couple of days.  And ANA people … learn tagging, and Technorati so I can find you!

*Marketers have a lot of interactive options to choose from. I think perhaps the biggest realization Yahoo! came to this year is that marketers have many, many alternative places to spend their interactive dollars instead of on banner ads on portal sites. For example, marketers today can build MySpace pages, buy product placements in video games, create RSS feeds, or buy mobile search ads, to drive desired behavior among their target customers. I think Yahoo!’s ad sales slid because marketers where diversifying how they spend their budgets across online alternative.

Source: Forrester’s Marketing Blog: Interactive Marketing Spending Maturing, But Not Slowing Down

One thing I’d note is that Yahoo have a history of missed targets. 

Of greater interest is whether a systemic shift is occurring.  The quote above is telling.  Online advertising is not about banner ads.  With online tenure, comes Internet smarts, blind spots appear in pages where images are presented, and popup blockers/ ad blockers are becoming common.

Lets take a step back and consider two approaches:

1. Yahoo approach
2. Google approach

Yahoo Approach

Yahoo pull content into the Yahoo environment.  Users navigate entertainment, travel, news, groups, etc etc etc, and always within Yahoo, where ads are presented, in a fairly “in your face” way.

My view of Yahoo, is that I don’t like it, but 1/2 Bn users can’t be all wrong. 

Google approach

Google direct users to the best answer to their enquiry.  The use the “people return to places that send them away” method.  Advertising is subtly presented in the Google properties that send you away.

Of the more than 5 billion online searches Americans conducted in December 2005, 49 percent were entered on Google, according to measurement firm Nielsen/NetRatings. Google’s share of total search activity rose 6 percent from a year ago. (Yahoo 21%/ MSN 11%)

My view is that I like Google. I don’t like advertising, and theirs is subtle enough I can ignore it.  I am not alone.

analysis

My views aside, Google is the current winner in terms of searches, while Yahoo continues to maintain a significant user base.  Their models don’t lend themselves to easy comparison.  But consumer behaviour suggests Google is winning.

Search is becoming the pre-eminent way people find things:

These results from September 2005 represent a sharp increase from mid-2004. Pew Internet Project data from June 2004 show that use of search engines on a typical day has risen from 30% of the Internet population to 41%. This means that the number of those using search engines on an average day jumped from roughly 38 million in June 2004 to about 59 million in September 2005 – an increase of about 55%.

Source Marketing Today

An open question is the consumers response over time to contextual ads alongside search results.  This type of marketing supported by intelligent software, contextual marketing, has taken over from banner ads.  Its generating ad revenue and growing, but stumbles occur.

Now we have social networks evolving as a space for marketing. Another open question, is to what extent will this displace search marketing.

Finally, we have the Cluetrain endgame, where markets are conversations, and consumer advocacy, and peer recognition takes over from advertising.  The endgame is not here yet, but there are clues in watching evolution of social networks, blogs/ blog comments, help forums, and wiki’s.  The shared characteristic, is that firms are not in charge of their brand, or advertising in these environments.  Product quality and genuine reputation becomes paramount.

Relevance to Bankwatch:

As usual with internet, the journey will be rocky and surprising.  Experimentation becomes essential.

Visitors to MySpace.com and Friendster.com generally skew older, with people age 25 and older comprising 68 and 71 percent of their user bases, respectively.  Meanwhile, Xanga.com has a younger user profile, with 20 percent of its users in the 12-17 age range, about twice as high as that age segment’s representation within the total Internet audience.  Not surprisingly, Facebook.com, which began as a social networking site for college students, also draws a younger audience.  More than one-third (34 percent) of visitors to Facebook.com are 18-24 years old, approximately three times the representation of that age segment in the general Internet population.

Source ComScore

Why do we care?  We care because the impact of social networking, and the consumer trends it supports what we talked of here earlier today which built on James post.  Trends such as markets as conversations, consumer advocacy, brand value discounting, unmarketing.  These are societal shifts that impact banks and everyone.

• “is there anything more I can do for you today”
• “have I satisfied your reason for calling today”
• “is your service operating satisfactorily now, sir”

Anyhow, Verizon plans to launch a blog for consumers.

If Verizon pulls this off, it could usher in a customer service sea change. Right now – with the exception of tech knowledge bases – the majority of customer service issues are handed behind closed doors. There’s little way for consumers to learn from the questions posed by others and the response they receive. What Verizon is doing in taking customer service to the blog world sure sounds innovative.

Source: Micro Persuasion: Verizon Plans 24/7 Customer Service Blog

It is described as fully open.

A blog by the end of the year to create a no-holds barred “all issues on the table” dialogue with consumers–and will support it with a round-the-clock response team.

There are many precedents.  Microsoft, and every web 2.0 company have online forums, self moderated, with chief moderators often appearing because they want to do it.

Relevance to Bankwatch:

Customer service is considered to be sacrosanct for companies that believe it is core to their business model.  It cannot be outsourced?  Well, reality is questioning that notion, and Verizon are certainly a customer service company, so this innovation is worth watching carefully.

This page is dedicated to any project related to imagine the future of a bank for BarCamp and any other interesting disruptions related to money

Source: BarCamp / BarCampBank

In any event, its just getting going, and I really like the concept.

Mission Statement :  (being peer reviewed)

• thinktank about the future of the bank (PeerInvest, WikiVenture, ethics, reputation, open-process and money, transparency, identity, KarmaInitiative karma-trusting….)
• promote and drive innovation on free software/culture/community projects
  • detect innovative projects via BarCamp international networking
  • select them via an OpenProcess of community-decision-making
  • seed-money from a piggy-bank dedicated to BarCamp projects (from 30K USD to 100K USD)

So I am in, and will see where this goes.

Technorati tags: BarCampBank, open+source+banking, pinkomarketing

Well at least this takes something that has been happening over the last year into the open. Web Services company Marqui seems to have been one of the first to make a commercial move when last year it offer 20 Bloggers $2400 each to post some thing positive about Marqui once a week for three months. This was followed by Payperpost.com a fully commercial service, and then there is the more interesting case of haveyoursay.com which was LandRover taking over the Blog site of a disgruntled customer and using it to try to improve its customer services interaction.

Trust the personal experience; recognise the corporate ‘adverblog’

The good news is that they won’t succeed. The power and trust implicit in personal opinion is as old as man. Blogging happens to be a tool that articulates that trust. And that’s all that blogs are … tools for people to post, interact and discuss. So it all comes down to credibility, and its just as easy to disregard bad blogs as it is to sign up for good ones.

Relevance to Bankwatch:

The early starters in Bank blogging are right to start slowly. If their efforts were seen to be totally self serving they will be ignored. Of course there is always a self interest in blogs, but the emphasis is on “self”, not corporate. Blogs can’t be corporate.

tags: corporate+blogs, blogging, pinkomarketing, banks+social+networks

1. Stop all outgoing messages. Concentrate on ways to listen better. Open up the channels to incoming. You can’t listen if you are yelling.
2. Be a community evangelist. It’s not about ‘creating customer evangelists’, it’s about advocating for your community. This is why it is important to have at least one person in-house that is focused on listening to the community. Even better is if everyone in-house is doing this. When developers and CEO’s get busy, it is increasingly more important to listen to the community advocate.
3. Drop the crap. Don’t think you are being clever in ‘fooling’ anyone to do your bidding. This is where ‘crowdsourcing’ really irks me. Anything less than 100% authenticity and ethics will be sniffed out. Trust is your greatest currency. You spend it and it is gone. It is a non-renewable resource.
4. Think small. Think niche. Forget the ‘we’re something for everyone’ thing. Nobody is something for everyone. Even those who have grown to be something for a large number of people didn’t start at mass level. [how to pick your niche: go through points on post 'Target Practice']
5. Employ open source principles like transparency, open sourcing your tools and getting your community involved in the actual development of your product early on.

Source: ::HorsePigCow:: marketing uncommon: BayCHI Presentation: Notes

The first one is more and more intriguing today, and more obviously correct. The big banks have corporate communications machines, that kick into gear whenever a situation develops. That can a result of complaints, newspaper articles, or lobby group issues. In those situations, the stakeholders are quite a closed loop, and the average mass consumer doesn’t even register.

Then there are the marketing campaigns, that I was railed against ad nauseam here. In those campaigns, the messaging is all about “positioning”. The positioning is all about profitability. Rarely is there clearly focussed customer positioning as the going in position. Unique in that approach is ING. They have designed their products around the customer experience. They are focussed on keeping it simple, eliminating red tape, and listening to their customers. In fact not a bad start on Tara’s principles.

tags: marketing, pinkomarketing, customer+advocacy

EXECUTIVE SUMMARY
Length: 7 pages

Promotions are more popular than ever, have wide appeal, and drive purchase and awareness – a welcome revelation for marketers struggling to create relevance with ad-weary consumers. Online promotions are particularly good tools for targeting valuable customers and enabling more interactive, relationship-based promotions strategies. As promotion use grows more sophisticated, Forrester expects that promotions will join the online marketing suite, print promotions providers will retrench, and marketers will leverage Social Computing technologies to guide their promotions strategies.

Source: Forrester: Interactive Marketing All Forrester Research

Key findings are that consumers are becoming more attuned to promotions, and particularly from their current provider. They are skeptical of promotions from others.

This seems to be a counterbalance to the impact of too many ads, and in recognition that even though most online folks find ways to ignore ads, they still need stuff. And one way to sort through the marketing garbel is to focus on price points. In particular price points from your current provider, with whom you already have a relationship.

Relevance to Bankwatch:

For all the talk of contextual, subliminal, google style marketing, this suggests old style (targetted) promotion to your own customers is a safe bet, and will in fact encourage loyalty.

Forrester Research: Reinventing The Marketing Organization

EXECUTIVE SUMMARY
Length: 23 pagesToday’s marketing organizations are broken. Three out of four marketing departments have reorganized in the past two years. Almost 80% of marketers don’t influence a critical customer interaction like customer service, and 85% don’t even own the “four Ps” of marketing anymore. To regain effectiveness, marketers must transition to a Customer-Centric Marketing Organization.

Doing so requires:
1) redesigning P&Ls and metrics;
2) shifting culture away from marketing communications;
3) investing in a customer relationship infrastructure; and
4) rethinking agency relationships.

Technorati Tags: marketing

PardonMyFrench: Why Is Online Advertising Held to a Higher Standard

Sure click fraud is an annoyance, but it can only be measured because it is part of an online advertising campaign where IP addresses are tracked, cookies placed, and every metric you can think of is tracked. It is time for online marketers to stop standing on the sidelines and letting other marketers get away with not having data. Stop moaning about click fraud and cookies being blown away because you are not helping yourself.Embrace the greatest tool you have which is more data than you can possibly analyze in a three second power point slide. We have communities, blogs, social marketing, click rates, CPCs, CPAs, search retargeting, etc all enabled with customer identifiers (non-PII or not). Please, don’t throw the data baby out with the click fraud bath water.

I posted this comment on pardonmyfrench, and want to expand on it here.

1) philosophical: internet _should_ and wants to be held to a higher standard, because it can and should be able to provide a better environment for all consumers. This is the promise of cluetrain, that in a nutshell says, that markets are conversations, and internet can facilitate those conversations. Consumers react well to open markets, and deliberately visit them to source opinions, views, suggestions, and make informed purchases.

The Cluetrain Manifesto, says this:

Online Markets… Networked markets are beginning to self-organize faster than the companies that have traditionally served them. Thanks to the web, markets are becoming better informed, smarter, and more demanding of qualities missing from most business organizations.

The key here is “self organising”. Technology is the great equaliser, and allows consumers to retain freedom from whatever annoys them. Examples :

• Adblock to prevent display of advertisements
• MP3 players plugged into your car to replace the radio and its advertising
• TIVO to eliminate TV ads
• Netflix/Zap to eliminate going to the movies, and movie ads
• kids on MySpace self selecting to avoid ads, and eventually avoiding MySpace when it gets polluted

Consider the Turkish bazaar – a concept that’s been around in the middle east since time immemorial, provides a natural way for people to interact at their choice, chat, become informed, and purchase. Vendors try shouting, but get ignored. Perhaps not the best metaphor, but useful. Vendors must have quality products or they will be ignored. Consumers chat to each other, advising on which vendors are good quality. Their is a certain camradarie that supports a market.

The Cluetrain, goes on to say:

1. The Internet is enabling conversations among human beings that were simply not possible in the era of mass media.
2. Hyperlinks subvert hierarchy.
3. In both internetworked markets and among intranetworked employees, people are speaking to each other in a powerful new way.

In Dafermos extraordinary paper from 2004:

Weblogs, in other words, envisage a hierarchy circumvention mechanism, which empowers knowledgeable employees to indulge in conversations with the market rather than communicating solely by means of marketing pitches and press releases that besides have limited effectiveness in a connected market economy.

These are powerful concepts, that are now beginning to be manifested. Take Dave Winers post, referenced here, about sending people away to have them return. This is societal changing stuff. The old world was run by extroverts who operate along the lines of trad girl above. The new world the introvert is king, and quietly gets things done. Its hard for firms who are used to the old way to keep up with the new way, because they have to immerse themselves in the web, and the tools, to truly appreciate the change thats going on here. As extroverts run many old style companies, this partly explains why it takes longer to figure this stuff out.
Conclusion:
Pay per click, pay per impression .. These may not be sustainable business models as currently articulated. And the issue is not click fraud. I am assuming someone can eliminate or at least manage that with technology.

The issue is consumer value, in a world of consumate customer choice. The real model has to be “pay per purchase”, or something that represents that value. This is the only real value. This represents the meeting point of value seen by the consumer, and value seen by the vendor. There is limited if any room for pure branding plays within online. Customers will opt out.

There is room for working with people to understand their needs, breaking down the purchase cycle, so that everyone helps each other along the way to the final point of purchase.

To finish with another quote from the Cluetrain.

Technorati Tags: marketing, pinkomarketing, business+models