The Bankwatch

Tonight I was chatting with my wife.  She is Japanese, and we were talking about my post this afternoon.  I had arrived at the revelation that Japanese business is driven by consumer need.  Brilliant.

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.

When I started to read this article I thought I was hearing that a multi channel strategy will bombard the customer into submission!

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.

What are some strategies for Experience Based Differentiation? This from the Forrester Consumer Forum Blog at the Chicago conference Oct 24/25, 2006.  We are always exploring the specific measurements, and tactics to implement customer centric environment.

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

 James lays out a methodology for automated pricing for Banks based on a set of characteristics that are individually specific to each customer.  The premise is that banks lack of price competition is an outcome of the lack of appropriate customer information.

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.

This is a classic post at the now defunct Burningbird (Shelley Powers), now at Planet Shelley Powers. (Thanks Tara for the reference)

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.

What are you doing to change the course of your organization?  With this question, Cymfony nails it.  The blogging world is like the Marines and leaves no-one behind.  Honesty and openness is the only way.  Its impossible to hide, so don’t try.  This is the essence of the new marketing.

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.

 Tara does a nice job of describing the root difference about understanding the new marketing.  I like the point about going past the client, right to the clients’ clients.

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.

The Price of Everything, builds on the concept that we spoke of here, that online banking is satisfying customers to a point, but it is not addressing customers needs to develop a relationship and be known at their Bank.

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!

Thinking about the CMO problem at ANA, when about 5% knew about web 2.0.  This begs the question of what are the implications for Banks.  What specifically should a bank think about, if it wants to join the web 2.0 cool club?

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.