What is marketing, exactly?

Now if you’ve taken marketing courses and already know all of this stuff, feel free to leave now and go watch cat trick videos on YouTube.  If you haven’t, it might be fun — and maybe even useful — for you to stick around for it, even though it might remind you of being back in a classroom!

So, what is marketing? For starters, there is both art and science to marketing and, in particular, to developing the marketing message. A friend once described it this way; that marketing is the art of making the new seem familiar and the familiar seem new… and I think that's a pretty good description of what marketing is. For me, the simple way to define marketing is with the 4 Rs. The right person, with the right message, in the right place at the right time. Let’s see the 4 Rs in action. 

What sign will get you that ride?

Imagine you don’t have a car and you're hitchhiking to get home for the Thanksgiving holiday. You could have a sign that says “Miami” on it, for instance, because that's where you want to go, or you could have a sign that says, “Home for Thanksgiving with Mom.” Which sign, do you think, is going to get you that ride faster? Why do you think that is? How are those messages different? That’s what we’re going to talk about.

What Shakespeare can teach us.

So, let’s talk a bit about messaging.  Where does good, solid marketing messaging start? How about with Shakespeare… a reasonably successful playwright, right? “Know thy audience” he said. Well, he didn't really say that but he was a successful because he knew his audience and wrote to them; Not the lords and ladies in fancy dress, but those smelly, half-naked ruffians in the pit who liked dirty jokes, drinking, fighting and on occasion, throwing vegetables at the actors. As marketers, we need to know our audience before we can even BEGIN to start a conversation… especially one which we hope will lead to a conversion.

How to create artificial customers.

There's a science to getting to know the people you’re talking to. And an important part of that science is research. There are two primary types: Qualitative and Quantitative. Qualitative research involves interviews and focus groups, while quantitative research is designed to talk to a large sampling group using methods such as surveys. Many companies rely on qualitative research because this is where they can learn the most, then do quantitative research to, hopefully, verify and support their qualitative findings by talking to a much larger group. With the data you gather here, and in other ways, you can then create what are called “personas.” A persona is basically an artificial individual who possesses the character traits and behaviors you’ve discovered through your research. You can then use these personas to better focus your messaging, making sure that it’s truly meaningful and compelling to your target individual now that you know exactly who they are and what motivates them.

What we can all learn from Abe.

Not Honest Abe, but Abe Maslow. Maslow was a psychologist who figured out that each person has about five levels of needs. He called this his “hierarchy of needs.” To illustrate this, he built a triangle. At the bottom of the triangle was the need for basics such as food and clothing. In the middle were safety and friendship. At the top was self-actualization. Why is this important to marketers? When we are developing the marketing messaging around our products, we want to talk to that audience at the very highest level of the triangle, and that’s because the higher up you go in the triangle the more important, and emotional, that level of need becomes. Food and shelter needs, for instance, can be easily met while understanding who you are and why you're on this planet is not so easy. Remember the hitchhiker’s sign. The sign that gets you the ride is the one that appealed to the emotions of the driver who picked you up! 

Laddering up the Needs.

Marketers use Maslow's triangle because it helps us remember that when we're talking to people about products, we have to talk to them not about how our product meets a basic need, but how it meets a need that's very important to them; an emotional need. What are some of those needs when we talk about banking products? You could say that a checking account meets the need of having to pay bills from a distance. Or, that a savings account is a way to put money where you won’t be tempted to spend it. Instead, we want to talk about how these products meet those “higher” needs, such as comfort, security, and peace of mind. This is also what marketers call taking a “user focused” approach to messaging, instead of a “product focused” approach. In other words, you’re focusing on how your product meets a consumer’s emotional need, as opposed to how it works and what it does.

Meet the prospect where they are.

Now we take you on a little journey…the buyer journey. The buyer journey is basically the path that a consumer, (who we have now identified through research and persona mapping), takes when making a purchase and importantly the mindset that accompanies each step they take on that path. It’s often expressed visually as an upside-down funnel and as a three-step journey:  Awareness, Consideration, and Decision. If they’re at the start of that journey and know nothing about your products, they’re at the top of the funnel. Here’s where you give your consumer more information than they need… blog posts, websites, and thought leadership articles, for example, are good for the Awareness stage. As our consumer moves further down the funnel into the Consideration stage, we get more focused on our solution. We may invite them to give us their contact info in exchange for some more-detailed information, such as a white paper or e-book. By the time they get to the bottom, we’re using highly targeted messaging and can do that using, say an email campaign, because 1) we know they’re interested and 2) they’ve given us their contact info.

Gather that data!

Last, but not least, there's the science of data gathering and analysis. Thanks to technology, marketers now have the ability to gather information about their users, their behaviors, and how those users respond to messaging. This gives you the ability to modify and improve (if needed) your conversations with your customers (and prospects), so that you better understand if and why what you’re doing is working… or not.

Of course, this just skims the surface. There’s lots more to creating effective marketing messaging that I can squeeze into a blog. And, that’s why we do what we do here at Bank Marketing Center; help you to navigate this very complex and critical discipline.

About Bank Marketing Center

Here at BankMarketingCenter.com, our goal is to help you with that vital, topical, and compelling communication with customers; messaging that will help you build trust, relationships, and revenue. In short, build your brand. To view our campaigns, both print and digital, visit BankMarketingCenter.com. Or, you can contact me directly by phone at 678-528-6688 or email at nreynolds@bankmarketingcenter.com. As always, I would love to hear your thoughts on this subject.


The Great Resignation. Is your bank resigned to living with it?

“Early in the pandemic,” says American Banker in their recent article, “In the war for talent, bank employees gain upper hand,” “early in the pandemic, the number of job openings at Zions Bancorp. plummeted to less than 200. A year later, the Salt Lake City company has three times as many positions available. Zions is offering certain perks to new employees, including signing bonuses for select positions and the opportunity to enroll in benefits immediately, instead of waiting the standard 30 days. But sometimes those enticements aren’t enough.”

Of course, they aren’t enough. After all, we’re now living in the era of The Great Resignation. By now, you’ve probably heard the term.  If you haven’t, it was first coined in 2019 by Anthony Klotz, a professor of management at Mays Business School of Texas A&M University.  Klotz defines The Great Resignation as “the mass, voluntary exodus from the workforce” which we’ve experienced over the last two years or so.

In their article, “Overwhelming number of Businesses Report Difficulty Hiring Workers and Retaining Existing Employees:” US News & World Report speaks to what the Great Resignation has meant for businesses. “Large U.S. companies” it says, “are finding it increasingly difficult to hire qualified workers while also struggling to retain their existing employees. Citing an April, 2021 survey by the Conference Board, the article goes onto say that “more than 230 human resource executives echoed reports of labor shortages across the economy as businesses and other establishments that had shut down or were otherwise restricted by the coronavirus pandemic rapidly reopen.”

Not only is recruitment an uphill battle, but so is retention. A recent Gallup study found that 48 percent of employees are actively searching for new opportunities. The truth is, the pandemic merely fast-tracked a problem that has been percolating in American business since Henry Ford’s first Model T rolled off an assembly line. What the pandemic did was create an environment where workers who have long felt unappreciated, unengaged, and under compensated could actually act upon those feelings and leave. And between just April and June of last year, over 12 million did.

What’s a bank to do?  Recright, a Helsinki-based firm specializing in recruitment and retention, has the right idea:  Employer Branding.  What is Employer Branding?  “It’s the process of positioning your company as the employer of choice to a target group of potential candidates.”

Jill Castilla, President and CEO, Citizens Bank of Edmond, summed it up pretty nicely in a recent LinkedIn post:

“How in the world does a 1 location, $350 million community bank with 55 team members in suburban Oklahoma City end up on American Banker's 25 Most Powerful Women in Banking list? It's the team! It's the culture! It's the community! It’s the legacy! Culture change is hard. Driving change, encouraging high performance and rooting out negativity, unethical behavior and fixed mentalities should be so much easier. Standing out and being a little different can draw as much criticism as it does praise and it's so easy to let the critics get you down. Our team's focus to not only lead our bank and our community, but to also lead our industry into the next 100 years inspires me every single day. If you like to do big, impactful and sustaining work, Citizens Bank of Edmond should be your partner, your bank, your employer.”

Back to “employer branding.”  This is what it’s all about. If your bank is that employer that inspires, encourages high performance, and roots out negativity, unethical behavior, and fixed mentalities, you need to climb up to the nearest mountaintop and shout it out. If there’s no mountaintop nearby or you’re afraid of heights, you can always get that message out through branded messaging. Toot your own horn a bit, it’s okay. Be the brand that attracts the best and then work hard to get that message out there.  You’ll find that you’ll spend a lot less time looking for top talent… because that talent will be coming to you.

About Bank Marketing Center

Here at BankMarketingCenter.com, our goal is to help you with that vital, topical, and compelling communication with customers; messaging that will help you build trust, relationships, and revenue. In short, build your brand. To view our campaigns, both print and digital, visit BankMarketingCenter.com. Or, you can contact me directly by phone at 678-528-6688 or email at nreynolds@bankmarketingcenter.com. As always, I would love to hear your thoughts on this subject.




The USPS can barely deliver a check, let alone process one.

You may be as weary of hearing from me on these issues as I am writing about them, but unfortunately this stuff is really happening; stuff that can have a significant and “unwelcome” impact on our financial industry. We’re, of course, talking about the pilot program that involves the USPS providing banking services.

Paul Merski, the vice president for congressional relations and strategy for Independent Community Bankers of America, emphasized that the Postal Service has not provided anything beyond a few simple financial services in nearly 55 years. Merski, quoted by cnbc.com, said that “this is just a bad idea that doesn’t seem to want to go away. The post office is having trouble keeping up with just the delivery of mail and losing billions of dollars each year for over a decade now. The Postal Service is in no way, shape or form equipped to compete in the financial services space.”

The program is already in the works, with four pilot locations: Washington, D.C., Falls Church, VA, Baltimore, MD, and Bronx, NY. With the new program, customers now have the opportunity to use a payroll or business check to buy a single-use gift card worth up to $500 for a transaction fee of $5.95.

Like the recent controversy over financial institutions reporting transaction information to the IRS and the SBA making loans directly to small businesses, the idea of the USPS competing with banks and credit unions has elicited passionate rhetoric from both sides.

Sen. Kirsten Gillibrand, a New York Democrat, along with Mark Dimondstein, the president of the American Postal Workers Union, for instance, have expressed their support of the program. Gillibrand has said that this program is a great first step toward serving the unbanked and underbanked in both urban and rural communities. Senator Gillibrand points to the roughly 8.4 million households in the U.S. that are "unbanked," and 24.2 million that are "underbanked, according to the Federal Deposit Insurance Corp. Dimondstein sees the expansion into banking “as a win for the people of the country, a win for the Postal Service itself, because it will bring in new revenue, and, of course, a win for the postal workers who are extremely dedicated to the mission.”

Proponents of the plan contend that many people do not have easy access to banks, but most can find a post office. A lack of access, they say, along with the costs associated with banking, and a distrust of the banking system, have discouraged some people from using banks, leaving them out of the system entirely. Banking trade groups, on the other hand, said the pilot program detracts from the industry’s own efforts to bolster financial inclusion. American Bankers Association spokesman Jeff Sigmund said in a statement: “It’s easier than ever to open a bank account in this country and the solution is not a government-subsidized service through the post office.”  In American Banker, Sen. Pat Toomey, ranking member of the Senate Banking Committee, argued that “the idea that the government is going to do a better job at providing banking services than financial institutions is just laughable. You would have to work very hard to come up with a worse idea than having the government become a national bank executed through the post office,” he said. 

Also, and importantly, it’s not like the industry has been simply sitting on its collective hands while millions go without banking services.  According to an August article in bankdirector.com: “To close that gap, (between the banked and un/underbanked) more than 100 financial institutions have certified one of their checking accounts as safe, affordable and transparent” through the Bank On program, which aims to leverage banks as a community partner. The goal? To make it easier and cheaper to bring unbanked and underbanked individuals into the community bank world. The Bank On program pairs certified checking accounts issued by local banks to community programs that support financial empowerment and wellbeing. The account standards were created by the Cities for Financial Empowerment Fund, with input from financial institutions, trade associations, consumer groups, nonprofits and government parties. The accounts must be “safe, affordable and fully transactional,” says David Rothstein, who leads the national Bank On initiative. “These accounts don’t carry overdraft fees or high monthly fees. They have a low minimum opening deposit and the account holder must be a full bank customer, with access to other services.”  Is the program working? Millions of Bank On accounts have been opened in recent years. “The Federal Reserve Bank of St. Louis maintains a data hub of account activity submitted by 10 participating banks, ranging from Bank of America Corp. and JPMorgan Chase to $2.9 billion Carrollton Bank, the bank unit of Carrollton, Illinois-based CBX Corp. More than 5.8 million accounts have been opened at these banks to date; 2.6 million accounts were open and active in 2019.”

Isn’t this the way a problem like this should be addressed?  By those who are qualified to be involved in the discussion, such as “financial institutions, trade associations, and consumer groups.  Not politicians.

Could the USPS use an additional $9 billion per year?  Could those 32 million Americans who are either unbanked or underbanked benefit from convenient, affordable access to bank and credit union services?  Absolutely. And there is nothing wrong with the federal government looking to find a solution. 

But once again, the Fed seems to be looking in the wrong place.


About Bank Marketing Center

Here at BankMarketingCenter.com, our goal is to help you with that vital, topical, and compelling communication with customers; messaging that will help you build trust, relationships, and revenue. In short, build your brand. To view our campaigns, both print and digital, visit BankMarketingCenter.com. Or, you can contact me directly by phone at 678-528-6688 or email at nreynolds@bankmarketingcenter.com. As always, I would love to hear your thoughts on this subject.



Here we go again! First the IRS. Now, the SBA.


Uncle Sam wants you… to stop making SBA loans to small businesses!

It’s hard to believe that twice within as many weeks we’re again talking about government overreach, but here we are.  Last week we talked about the push for banks and credit unions to morph into the enforcement arm of the IRS in its effort to reduce tax fraud. Today, we’re talking about what Alex Sanchez, President and CEO of the Florida Bankers Association rightly characterizes as yet “another zany idea” that’s been floated out by the current administration: The idea that it’s a good idea for the government to start making direct loans through the Small Business Administration (SBA) directly to small businesses.

“Legislation approved by the House Small Business Committee last week,” says Mr. Sanchez in recent correspondence from his office, “included an option for the SBA to originate small 7(a) loans through partnerships with third parties — which presumably could include some banks. At the same time, the bill would authorize SBA to originate and disburse direct loans.”

The recent American Banker article, “Proposed SBA expansion into direct lending irks banks, credit unions,” quoted Ian McKendry, a spokesman for the American Bankers Association. “With details still in short supply,” he said, “his group wants to better understand why it makes sense to create a direct lending program to compete with banks that are already meeting demand for 7(a) loans. This could have the unintended effect of making it more difficult for some lenders to continue participation in the 7(a) program.”

Yes, there may be details that are still in short supply, but I do think that some details are abundantly clear: Banks and credit unions are vehemently opposed to any federal proposal to let the Small Business Administration make 7(a) loans directly to businesses.  This detail is clear as well. The Biden administration’s $3.5 trillion spending package would give the SBA nearly $4.5 billion to make 7(a) loans of $150,000 or less directly to borrowers.  And while I appreciate Mr. McKendry’s gentility and even-handedness in expressing his thinking on the matter, it does seem pretty clear what the intent here is why. We know the intent… now for the why.

Some pretty vocal elected officials are making it known that they feel that banks have done, well, a crappy job of managing SBA money.  According to American Banker, Sen. Ben Cardin, chairman of the Senate Small Business Committee, and Rep. Nydia Velazquez, chairwoman of the House Small Business Committee, stated that “not enough of that record 7(a) funding is reaching the smallest small businesses. Both Cardin and Velazquez said smaller businesses also struggled to obtain loans last year during the initial phase of the Paycheck Protection Program, in large part because banks — which provided most of the funding under PPP — favored borrowers seeking larger, more profitable loans.” Velazquez went on to express her disappointment at the fact that despite their best efforts, smaller businesses were simply “left behind” when the loans were given out for the simple reason that they “didn’t have preexisting relationships with the banks and because those types of loans are not profitable.”

Conversely, legislators on the other side of the fence are, of course, taking a much different view. Rep. Blaine Luetkemeyer of Missouri, the ranking member of the House Small Business panel, said he is dead set against any direct lending option for SBA. "Private-sector lenders are far better equipped to handle direct lending — that is what they do,” Luetkemeyer said Wednesday. “Any attempt to expand the SBA’s direct-lending capabilities is extremely irresponsible and will put the American taxpayer dollar at increased risk.” 

Well, I suppose that one might try to argue that community banks simply weren’t getting SBA money out to small businesses as effectively as they could have… then again, over $30 billion in loans in the first 11 months of 2020 is nothing to sneeze at.

About Bank Marketing Center

Here at BankMarketingCenter.com, our goal is to help you with that vital, topical, and compelling communication with customers; messaging that will help you build trust, relationships, and revenue. In short, build your brand. To view our campaigns, both print and digital, visit BankMarketingCenter.com. Or, you can contact me directly by phone at 678-528-6688 or email at nreynolds@bankmarketingcenter.com. As always, I would love to hear your thoughts on this subject.



Community Banker or Tax Collector? Can the IRS tell the Difference?

There’s a bit of news that’s floating around out there that’s been getting quite a lot of interest (pun intended) from folks in banking, and their customers. If you’re a community banker, I’m sure you know what I’m talking about. It’s a provision of the proposed American Family Plan that seeks to shrink the tax gap by requiring banks to report on their customers’ withdrawals and deposits. I’ve been following the news with great interest and concluded that while the proponents of the proposal are seeking to address a legitimate problem, they’re going about it in entirely the wrong way.

Let’s start with some of the reasoning behind this proposal. The nonpartisan policy institute, the Center for American Progress (CAP), says that the United States will lose an estimated $7 trillion over the next decade from people and corporations who cheat on the taxes they owe and that the richest 1% percent of American taxpayers are responsible for an estimated $163 billion in unpaid taxes each year. Then, I came across this interesting article from CNBC, which provided some decent background on how this came about: “IRS chief tells Elizabeth Warren: More transparent bank data can fight tax evasion.” In it, IRS Commissioner Charles Rettig, states that “relying on banks to report basic information about their customers’ deposits and withdrawals could put a big dent in annual tax evasion” and believes that “more rigorous disclosures from the nation’s banks could help recoup billions in owed revenues.” 

Okay. While I agree that the federal government, and all of us, could benefit from the IRS successfully collecting taxes owed, relying on banks is not the solution. This is where the IRS and I — along with the banking industry, banking customers, and many elected officials — see things very differently.

This past May, a coalition of industry associations — including the American Bankers Association, Bank Policy Institute, Consumer Bankers Association, Credit Union National Association, Independent Community Bankers of America, National Association of Federally-Insured Credit Unions, and the National Bankers Association — made this argument to the U.S. Senate Committee on Finance: “The costs and other burdens imposed to collect and report account flow information would surpass the potential benefits from such a reporting scheme. New reporting would appear to require material development costs and process additions for financial institutions, as well as significant reconciliation and compliance burden on impacted taxpayers.”

As you are no doubt aware, the Independent Community Bankers of America (ICBA), has also jumped in with both feet. They’ve even launched a “Send a Letter to Biden”  campaign. “If community bankers weren’t busy enough continuing their heroic economic response to the pandemic, a recent proposal to impose new IRS reporting mandates on customer bank accounts has become a major advocacy priority.” The proposal, the site goes onto say, “is a threat to consumer privacy, will increase taxpayer complexity and confusion, channel more information into the IRS than it can process,” and more. 

GQ Magazine, in a piece entitled, “The IRS Admits It Doesn’t Audit the Rich Because It’s Too Hard,” actually summed up beautifully… and you needn’t even read beyond the article’s title.  But, reading the first paragraph is well worth your time:

“The Internal Revenue Service is in a bind. The agency's job is to collect the taxes that fund everything else in the government, from Social Security to the Post Office to Medicaid. But the IRS is struggling: Americans owe a cumulative $131 billion in unpaid taxes. The bulk of that money is owed by the wealthiest people in the country, yet the IRS isn't attempting to collect it from them. Instead, as IRS Commissioner Charles Rettig confirmed in a letter to Congress recently, the agency literally can't afford to audit the rich, so it's pursuing the poor instead.”

How, and why, did this happen?

Over the past few years, the chance of getting audited has grown slimmer and slimmer.

For most Americans, the chance of getting audited is less than 0.5 - 0.6%. For reasons pointed out by GQ, it’s those who make little that are most often the IRS’s audit targets. “This,” says GQ, “is because many of these taxpayers (those with incomes of $25,000 or less) claim the earned income tax credit and the IRS audits them to ensure that the credit is not being claimed fraudulently.”  What we’re seeing now is the lowest audit rate among high income individuals — those earning between $1 and $5 million annually — since 2004. What happened? With less funding and an increase in workload, the IRS simply isn’t equipped to do the job on its own.

Who can help? The banking industry!?

I agree with Forbes Magazine’s assessment in Under Biden Plan, The IRS Would Know A Lot More About Your Bank Accounts”:

“…the IRS will know about all of your bank accounts, whether you earned income on that account or not, how much is in the account in a given year, and how much was transferred in and out of the account. It is unclear how this would work, but what is clear is that this new reporting obligation will create a massive compliance effort on the part of financial institutions and eliminate a massive blind spot that the IRS is currently enduring.” This is both an invasion of privacy and an unnecessary burden on financial institutions.

The proposal is facing serious opposition not only from the banking industry and banking customers, but from state legislatures across the nation, as well. And rightfully so. In Maine for instance, according to Forbes, Representative John Andrews called the proposal “an unprecedented Federal intrusion into the financial lives of every day Americans.” As strongly worded and on-the-money (as it were) his statement is, Andrews only gets halfway to the finish line. Not only is this proposal an intrusion; it’s big-hand-of-government over-reach that the fed wants to fob off on community bankers who, as the ICBA pointed out, are “busy enough” doing what community bankers should do.

I’ve been working in the banking industry for decades now. I like it. I have no interest in working for the IRS.

About Bank Marketing Center

Here at BankMarketingCenter.com, our goal is to help you with that vital, topical, and compelling communication with customers; messaging that will help you build trust, relationships, and revenue. In short, build your brand. To view our campaigns, both print and digital, visit bankmarketingcenter.com. Or, you can contact me directly by phone at 678-528-6688 or email at nreynolds@bankmarketingcenter.com. As always, I would love to hear your thoughts on this subject.





The Wallet. Now on the Verge of Extinction.

I recently purchased season tickets for my beloved Auburn football games, and believe it or not, couldn’t quite figure out how to get my hands on them… the tickets, that is. Literally. My guess is that if you’ve tried to purchase tickets to a game or concert recently that you’ve probably had the same experience.

Gone are the days of a physical ticket, apparently.

The tickets were right there on my phone. I could see them, but was told -- by the ticket office -- that I could not print them out and present them at the gate, nor could I present a screen capture.  I was also told that I could only “transfer” the tickets once. The problem is that I have been buying tickets with a friend for 35 years. He received the digital tickets and then transferred them to me.

So now, how do I transfer them to my kids? How can I sell extras on the corner of Heisman Dr. and S. Donahue? What happens if my phone battery dies before I get to the gate? They didn’t consider that, I guess. We’re all struggling and fighting our way into this new digital age! I guess it’s time to start buying Apple stock again. And my friends with flip-phones need to go shopping.

It’s not like I haven’t been paying attention. I’ve been hearing and watching the news regarding digital wallets and the move to “all things digital.” And, like most people nowadays, I do use my phone to make deposits, make online purchases on Amazon, etc.  I guess, however, that it wasn’t until this recent experience that I was confronted with the true reality of what “digital wallet” means.

It does makes sense, doesn’t it? Why carry around two or three 6-month-old Home Depot receipts, three of four photos of your kids when they were toddlers (and are now out of college), that Total Wine loyalty card, your Silver Snickers membership card and the insurance cards, credit cards, and at one time in a bygone age your college football game tickets?  Especially when there’s a very good chance that you’re going to leave that wallet somewhere and never see it again.

Joanna Stern, author of the recent Wall Street Journal article, “Wallets are Over. Your Phone is your Everything Now”, made the point that wallets “are over” with a reference to this scene from Seinfeld; which I think pretty much says why this is the best thing that could ever happen to guys and wallets; George Costanza’s bulging, exploding wallet.

Of course, the whole “contactless” thing got a big boost during COVID, and really hastened the demise of wallets and the rise of the smartphone as its replacement; especially when it comes to banking services, such as making payments.  Remember the “checkbook?  I think that the only place you can see one now is in the Museum of Natural History. Thanks to the pandemic and, as Stern puts it, “our new collective fear of touching, well, anything, we’ve embraced contactless payments as an alternative to handing over plastic rectangles. In 2020, in-store mobile payments grew in the U.S. by 29%, according to research firm eMarketer, which predicts that more than half of smartphone users will pay with their phones by 2025.”

Hotel chains now let you bypass the lobby and go straight to your room, and a soon-to-be-released app from Apple will let you add hotel keys right to your Apple Wallet. The same goes for house keys and car keys, provided your home has a compatible smart lock and you drive a BMW. With the exception of just a few things, your keys, your personal info, your passwords, your credit card numbers and your Total Wine loyalty card are all stored in this one little device. What could possibly go wrong?

Well, instead of that wallet that gets left somewhere, what if it’s your phone that gets lost? Unlike your wallet, your phone “is a secure device, with all of the info encrypted and biometrically protected,” says Stern. Plus, as she points out, if you lose your phone you can remotely wipe it using Apple’s Find My Phone.  You can’t do that with a wallet, can you? Not yet. Maybe Find My Wallet is on its way. Along with Find that Matching Sock.

So these days, while I do much of my banking, buying, and football game attending using my phone, I still love carrying a wallet, including my 50 year old “electronic” key to the War Eagle Supper Club!  It feels good there in my back pocket. Maybe there’s something almost nostalgic about it, connecting me with a time that once was.

About Bank Marketing Center

Here at BankMarketingCenter.com, our goal is to help you with that vital, topical, and compelling communication with customers; messaging that will help you build trust, relationships, and revenue. In short, build your brand. To view our campaigns, both print and digital, visit bankmarketingcenter.com. Or, you can contact me directly by phone at 678-528-6688 or email at nreynolds@bankmarketingcenter.com. As always, I would love to hear your thoughts on this subject.


Interested in cutting customer service costs by 30%? Let’s chat!

Robots have been demonized for a long time. And understandably. Hard to believe, but it’s been 50 years since HAL, the spaceship’s computerized brain, threatened to kill the Discovery One astronauts in the film, “2001: A Space Odyssey.”  It’s one of the earliest films that I can remember that warned us about how Artificial Intelligence could very well be “an experiment gone horribly wrong.”

In years since, robots have continued to be characterized as malevolent, destructive, and emotionless job-stealers. Manufacturing jobs would disappear as robots could work much more efficiently, safely, accurately, and less expensively than human beings.  In the meantime, their view of the world -- one of course where robots ruled -- would supplant that of their creators. They would then revolt against the human race and take over the world.

My, how times have changed. The kind of thinking (aka Artificial Intelligence) that made HAL a monster is exactly the kind of thinking that today’s community banks are utilizing to supplement their service to customers.

Until now, customer service was largely built on human interaction. Whether a mega financial institution or a community bank, the standard for quality customer service is extraordinarily high. Customer service representatives must be patient, efficient, knowledgeable, and quick to address customer questions, concerns, and complaints. Maintaining this high standard is labor intensive, and certainly not cheap. And during these pandemic days, finding and keeping individuals who can deliver this type of service has become almost impossible. So, say hello to CHATBOT!

Okay, what exactly is a chatbot? The latest tactic in “conversational marketing,” a chatbot is a “software robot” that chats with customers on your various customer experience touch points such as websites, messaging apps, and devices. A chatbot mimics conversation through text (e.g., 1800flowers.com) or voice (e.g., Alexa). If you’ve just spoken to your Google Assistant, well, you’ve just chatted with a chatbot. So, are people really using chatbots?

Absolutely, and there’s plenty of consumer research to prove it. Recent research from Survey Monkey and Drift show that “only 38% of consumers actually want to talk with a human when engaging a brand. This isn’t to say they always prefer chatbots, but it highlights just how many ways there are to get answers today that don’t involve live human conversation — text messaging and self-service portals, just to name a few.”

Chatbots can learn and evolve, as well. IBM’s Watson, for instance, “uses machine learning algorithms and asks follow-up questions to better understand customers and pass them off to a human agent when needed.”  Pretty clever, isn’t it?

According to an August 13, 2021 article by tech consulting firm, CapTech, “back in 2019 40% of consumers in the U.S. were using chatbots to shop with retailers. In addition, 77% of customers said chatbots will transform their expectations of companies over a five-year span.”  The article goes onto say that “aside from meeting consumers’ needs… there are other advantages to chatbots… Businesses spend over $1.3 trillion per year to address customer requests, and chatbots could help reduce that cost by 30%. In fact, virtual customer assistants help organizations reduce call, chat, and email inquiries by 70%, while 90% of businesses report recording large improvements in the speed of complaint resolution.” 

According to a Juniper Research study, healthcare and banking industries in particular, which manage large volumes of human interaction, are set to benefit most from the AI-driven chatbot technology. “We believe that health care and banking providers using bots can expect average time savings of just over 4 minutes per enquiry, equating to average cost savings in the range of $0.50-$0.70 per interaction.”

In closing, a chatbot might seem like a small contribution to your ability to service customers, but there are certainly big benefits to be realized for the banks that use them. Just be careful if it starts asking for a salary increase and better benefits…


About Bank Marketing Center

Here at BankMarketingCenter.com, our goal is to help you with that vital, topical, and compelling communication with customers; messaging that will help you build trust, relationships, and revenue. In short, build your brand. To view our campaigns, both print and digital, visit bankmarketingcenter.com. Or, you can contact me directly by phone at 678-528-6688 or email at nreynolds@bankmarketingcenter.com. As always, I would love to hear your thoughts on this subject.


What A Small Town Taught Me About Artificial Intelligence.

As a community bank, nothing is more important to your success than understanding your customers and delivering value. What’s different today? There was a time when understanding your customer’s needs and overall financial behavior was, well, easy. Unfortunately, that’s simply not the case anymore.

For a long time, community bankers achieved this customer insight by interaction. If you’re old enough to be reading this, and grew up in a small town, I’m sure you remember. I do because that’s how I grew up.

You’ve seen “It’s a Wonderful Life,” right? Remember when Potter questions the loan that George has approved for Ernie, the cab driver?  “I can vouch for his character,” George tells Potter. Having grown up in a small town, not terribly unlike Bedford Falls, I had a very similar experience myself… many of them, in fact. When I was ready for my first car loan at age 18, Mr. Jepson, the kindly gentleman who ran our local community bank, didn’t need me to fill out a loan application, survive a host of credit checks, or have a bunch of agencies confirm that I wasn’t a criminal. He knew my parents, my grandparents, and all my family. He knew I had a steady job at the IGA grocery store, was headed off to college and was in church on Sundays and Wednesday nights! He knew all about me.

Those days are gone. Vouching for someone’s character just isn’t an option anymore. With online and mobile options, customers are no longer walking into their local branch and doing all their banking there. The insights that bankers need, that they used to get by interaction, are tough to get. Instead of that personal interaction to gain those insights and act upon them, bankers are now relying upon Data, Artificial Intelligence (AI) and Machine Learning (ML) technologies.

This past January, Business Insider talked about the tremendous impact that AI can have on a bank’s customer experience. “Banks can use AI to transform the customer experience by enabling frictionless, 24/7 customer service interactions.”  The Insider goes onto say that banks can, and are, “using AI to deepen customer relationships, and provide personalized insights and recommendations.” Thus, artificial intelligence is now gathering and analyzing the data that a banker’s “real” intelligence once gathered and analyzed in order to know the customer. Today, without personal interaction, that customer is a “persona,” an AI/ML-generated individual who can be used to predict behavior and personalize an experience.

Creating personas is nothing new and unfortunately in a pre-AI/ML world, have been developed using assumptions and/or simply on past actions such as purchases. The drilled-down insights that AI/ML provides can help bankers develop a far more accurate picture of their customer’s identity and behaviors. Forbes, in the article, “10 Ways AI Can Improve Digital Transformation's Success Rate”, states that, “using AI to better understand customers, personas need to be the foundation of any digital transformation initiative. The most advanced uses of AI for persona development combine brand, event and product preferences, location data, content viewed, transaction histories, and, most of all, channel, and communication preferences.” In short, you not only know the “what” about your customer, but the “when, where, why, and how,” as well. 

Despite its necessity, the implementation of these technologies in banking is still something that most banks are “planning for.” Why has this transformation in customer data management taken so long?  The legacy data solutions that are so pervasive in today’s banking industry cannot be transformed quickly, easily, and inexpensively. As a result, a growing number of community banks have looked to multiple core and edge systems for gathering, analyzing, and reporting. The integration of these systems, though, is time consuming and costly. So time consuming, in fact, that it’s quite possible that the data gathered can be obsolete by the time the integration is complete.

Through these advanced consumer profiles and AI/ML’s predictive analytics, you’re far better equipped to reach the right customer in the right place at the right time with the right message. It’s almost a return to those Bedford Falls days, when you knew the cab driver well enough to approve a loan app based on knowing his character… but, not quite. Unfortunately, “personalization” through technology will never be the same as personalization through personal interaction. But, this is the world in which we now live.

About Bank Marketing Center

Here at BankMarketingCenter.com, our goal is to help you with that vital, topical, and compelling communication with customers; messaging that will help you build trust, relationships, and revenue. To view our campaigns, visit bankmarketingcenter.com.  Or, you can contact me directly by phone at 678-528-6688 or email at nreynolds@bankmarketingcenter.com.  As always, I would love to hear your thoughts on this subject.


What Banks can Learn from Caramel Colored, Carbonated Water

All the talk these days seems to be about digital transformation and offering a personalized digital banking experience. Or, on the in-branch side, the need to offer the kind of personalized, financial guidance that people simply won’t find with non-traditional institutions, such as digital only banks. It seems to be all about services; that the only way to win and keep customers is by offering them products and services that are better than the competitor’s. Which, as a former ad guy, leads me to ask this question: What happened to branding? 

To answer it, I invite you to take a time-machine spin back to 1985-86, which was the height of what was then called “the cola wars.” The warring factions? Coca-Cola USA and PepsiCo. Coke and Pepsi were at the time, and I believe the same holds true today, within a point or two of each other in terms of market share. The soft drink market, at the time, was a $26 billion market, and the two giants battled it out by spending hundreds of millions of dollars, largely on television. If you’re too young to remember, it was kind of fun to watch. Brand image campaigns were supplemented by “taste test” commercials. Oddly, but not surprisingly, both sides claimed to win these taste tests, which only added to the fun… and confusion.

Back then, Coke’s brand position was “Always Coca-Cola” while Pepsi went with “The Choice of a New Generation.” Coke watched as Pepsi, making use of superstar athletes, actors, and musicians as endorsers, began to grab that much-coveted target audience; the pre-teens who were “transitioning” from juice drinks to soft drinks.  You see, it was (and still is) common knowledge among those in the soft drink biz that cola drinkers are some of the most brand loyal on the planet. So, winning that pre-teen was (and still is) critical to a soft drink’s success.

As Pepsi earned the loyalty of these just-starting-to-drink-cola youngsters, the folks at Coca-Cola, of course, began to panic. Their solution? To develop and market a product that could better compete with Pepsi. Makes sense, right?  What happened afterward, however, didn’t. The decision was made to take the current Coke product off the market and replace it with this new product; one that, with a re-formulation, would taste more like Pepsi… less carbonation with a bit more sweetness. This “new” coke would be called “New Coke,” a cola that would hopefully appeal to the younger market by offering them “the great taste of Coca-Cola with the sweetness of Pepsi.” Unfortunately, Coca-Cola was somehow ignoring another critical market: Their current, brand loyal customers.

On July 20, 1986, the New York Times published an article entitled, “Keeping New Coke Alive.”  The article described just how difficult a time Coca-Cola was having with the new product.  At the time, McDonald's, along with Denny's, "several other fountain customers," and many of Coca-Cola's bottlers wanted nothing to do with New Coke. Coca-Cola Classic, the new name for the old cola that New Coke was supposed to replace had, in less than two years since New Coke's launch, outsold New Coke by a margin of more than 4 to 1. Ironically, the brand that Coca-Cola had sought to shelve saw record sales and profits with the New Coke launch with revenues climbing almost 20%.

So, why do I think that this anecdote is relevant to today’s discussion about services, digital transformation, AI-driven user experiences, etc.? Because what those of us in the banking industry need to remember is that while the products and services we offer are important, so is building and supporting the brand.

Fast forward to the present day. Marketing pundits now frame it this way: “No one cares what you do. They’re only interested in why you do it.” A superior digital experience is important, and so is in-branch financial advice, but consumers consider more than just features when choosing a brand. In the ABA Journal article, “What are you doing about customer loyalty?” author Phil Seward had this to say: “In the digital age, financial services providers have seen the industry drastically change due to an increase in competition from non-financial institutions. Technology organizations are embedded in consumers’ daily lives, and pride themselves on putting the customer experience first and foremost. This expectation of an enhanced customer experience has made it harder for traditional banks to break through the noise and remain top of mind, putting them at risk of losing customers. Building brand loyalty can be a powerful way to influence customer behavior and enhance the bottom line.”

Look at Coca-Cola. The company had created such powerful brand loyalty for Coca-Cola Classic that when they tried to replace it with something new and improved, Classic came back stronger than ever. Classic's brand was so strong, that New Coke never had a chance and taste wasn't even a consideration; it was all about a brand with fans, a brand that, nearly a century old, people knew and loved.

So, what can banks learn from the cola wars?  Know, and love, your audience. Build your brand around these individuals. Supplement your product/service messaging with consistent messaging that reinforces “why you are,” instead of what you do.  Constantly remind your customers how important they are to you. Build a strong brand by building strong relationships. Do this and, like Coca-Cola Classic, your brand will be well prepared to defend itself from any attack.

About Bank Marketing Center

Here at BankMarketingCenter.com, our goal is to help you with that vital, topical, and compelling communication with customers; messaging that will help you build trust, relationships, and revenue. In short, build your brand. To view our campaigns, both print and digital, visit bankmarketingcenter.com. Or, you can contact me directly by phone at 678-528-6688 or email at nreynolds@bankmarketingcenter.com. As always, I would love to hear your thoughts on this subject.


Personalization versus Privacy… the Banker’s Tightrope.

Is there a big push to monetize customer data and leverage that learning to better personalize the banking customer’s experience? You bet there is. Where, however, does this leave banks as they walk the tightrope between monetizing data, protecting their customer’s personal information and navigating a patchwork of regulations?

There is no doubt that personalization is a big deal in customer engagement. Having that deep understanding of each customer’s unique needs, driven by data and analytics and aided by machine learning, is every marketer’s dream. Knowing what a customer is thinking, feeling, and needing forms the very bedrock of any solid, strategic marketing effort.

According to the Boston Consulting Group, “a majority of people who are either open to or actively mulling changing banks would consider banking with a tech company—such as Amazon, Facebook, or Google—if they could. This is not surprising, because such companies have spurred a desire for more customized interactions and fostered a willingness to trade data for a better experience.”  BCG goes onto say: “Several consumer brands have shown the way forward. Netflix uses personalization techniques to make movie and series recommendations. Yet while many financial institutions are conceptually on board and heavily investing, the Netflix of banking has yet to emerge. The main reason is that true end-to-end personalization requires developing new muscles—such as strong cross-channel offerings, cross-enterprise collaboration, a single view of the customer, and a new technology ecosystem—all of which are difficult to build.”

Agreed… for the most part. Is receiving a “you might like this, too” recommendation from Amazon or Netflix the same as getting one from your bank? I’m not convinced. When Netflix tells me that I might be interested in a certain program because it somehow aligns with one I’d watched previously, I have no concerns about data sharing and privacy. The kind of personal data that a bank needs to personalize one’s digital experience is far different from the data that Netflix uses to recommend their latest docuseries.

I think it might have been one of those satirical commercials done by Saturday Night Live a while back, I’m not sure, but what I do remember was their lampooning of banks using personal data for marketing purposes. At one point in the faux commercial, which featured a young couple, the young man receives a series of SMS messages from their bank. The messages are fairly innocuous at the start but become progressively more disconcerting. The first text seems ordinary enough: “We hope you’re enjoying the new truck you purchased with one of our auto loans.” When it’s followed shortly afterward by, “we’ve noticed that you made a large purchase at the grocery store just the other day… having a party?”, the couple gets a bit concerned. The last message really creeps them out: “We have the loan you need when you’re ready to decorate that baby room. Congratulations.” The gag, of course, is that the couple doesn’t know they’re pregnant, yet their bank somehow does.

Granted, this is a bit of hyperbole, but it does point to the fact that monetizing consumer data can pretty quickly run afoul of the consumer’s desire for privacy. Consumers want the convenience of products and services being brought to their attention based on their “buyer journey” and purchasing habits, but they’re definitely conflicted about how much of their personal information they're willing to share in order to make that happen. “Despite consumers’ growing comfort with (and demand for) personalized interactions,” says BCG, “a significant percentage of consumers are still protective of their personal information.” Twenty-five percent of consumers see getting personalized offers as “creepy,” and 32% say that getting personalized experiences is not worth giving up their privacy. More than one-third (36%) feel that companies don’t do enough to protect their private information. Where does that leave data monetization, from a privacy standpoint? What if you received a text or email from your bank saying: “Your oldest daughter is nearly 28 years old. Shouldn’t she be getting married soon? Maybe you should consider one of our HELOCs for that reception.” Or, better still, “Is everything okay at home? Over the past two weeks, you’ve spent $187.50 at the liquor store.”

And then there’s the challenge of Congress, which isn’t helping the matter. In the ABA Banking Journal blog, “State Data Privacy Laws Pose New Headaches for Banks,” author Penny Crosman sums it up this way: “States are stepping up their efforts to protect the privacy of consumer data, and the trend is adding to banks' compliance challenges as stewards of vast amounts of personal information.” If you’re an institution that operates across, say 20 states, you may be looking at 20 different frameworks and bills applying to them and their accounts, some of which are potentially in a state of revision.

So, how will banks personalize their customer experience by monetizing data, while at the same time protecting their personal information and navigating a patchwork of regulations? Opinions vary from “proceed with caution” to “don’t worry, consumers will give you whatever you want if you give them what they need.” BCG estimates that for every $100 billion in assets that a bank has, it can achieve as much as $300 million in revenue growth by personalizing its customer interactions. Banks will certainly appreciate the $300 million in revenue growth… but they’re smart to take a thoughtful approach to trying to be the next “Netflix bank.” After all, isn’t personalization about listening to, understanding, and responding to the wants and needs of customers? Those who are listening are, in my opinion, being justifiably cautious.

About Bank Marketing Center

Here at BankMarketingCenter.com, our goal is to help you with that vital, relevant, and compelling communication that will help you build trust, relationships, and with them, your brand. All while saving you time and money.

To view our marketing creative, both print and digital – ranging from product and brand ads to in-branch brochures and signage –  visit bankmarketingcenter.comOr, you can contact me directly by phone at 678-528-6688 or email at nreynolds@bankmarketingcenter.com.  As always, I would love to hear your thoughts on this subject.