Overall, I must say the discussion was very good (from my perspective), and—to be totally honest—did not ridicule Wag nearly as much as I expected. Rather, I felt Carla and Jimmy truly did grasp a good portion of the idea behind Wag and Tribed.

Note: If you listen to the replay, the portion discussing Wag is between 9:00 To 17:45.

Five Responses

1) Jimmy: “You have to be a dog lover to identify with this group”
That is exactly right…and is in many ways the point. When you truly create a distinct brand experience, it should completely turn off and sound ridiculous to those who it is not designed for. In other words, it should polarize.

2) Carla: “You can get your debit card with the dog on it….and learn how to save money.”
These are both true. But the point I want to emphasize is that these two things just barely scratch the surface of the vision for Wag. A debit card dog photo is by itself just cosmetic and doesn’t really make the experience to dog fanatics more relevant than at another financial institution. Rather, what truly defines the experience is:

• Connecting with other members—and all employees—who are dog fanatics
• Members adding to the community dialog on an ongoing basis about financial issues related to the dog-oriented lifestyle
• Products that are tailored to the dog fanatic’s lifestyle, when possible
• The Bottom Line: an experience that is 1000% relevant to a dog fanatic’s lifestyle…and 0% relevant to a non-dog lover

This brings us to…

3) Jimmy: “It’s not that this is just a bank for dog lovers, but is a community of dog lovers that even has its own bank.”
Bam. Exactly. Couldn’t have said it better myself, and therein lies the core of this business.

4) Carla: A new definition of common bond….
Carla nicely alluded to another key point of Wag and Tribed as a whole: we are redefining what a “common bond” is. Even though we are creating a bank, not a credit union, the principle is same. So much, in fact, that (no offense to credit unions), I expect that Wag customers will feel the “membership” vibe WAY more at Tribed’s banks than at a credit union. And we’ve developed several ways to make sure of it.

5) Jimmy: “Geographical lines are not the only lines we draw, and they’re not the only lines we start to erase.”
Right again. Damn, you guys are really getting this—I’m impressed. (seriously)

Last reminder: as people evaluate Wag, I hope they will actually evaluate Tribed just as much. Keep in mind, Wag is just the first of a large portfolio of banking experiences we are creating. And when evaluating our business model, remember there will be 20-50 Wag counterparts.

Thanks to Carla and Jimmy for their interest in Wag, and for doing a great job discussing several of the salient points.

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It’s similar in banking.Thanks to the Internet, consumers can shop for the best rates, products and services online, and then after making a selection, take action. They can do it all by themselves, without any real help from the individual banks they are considering.

So I got to thinking, “what if….”

(Note: as with all my “what if” ideas, I’m not saying the following is necessarily a good idea–I’m just saying it’s an idea that should at least be pondered for a few minutes if you advocate innovation in financial services)

What if there were a layer of “banking agents”? Would they be able to add any value to the consumer or the bank, and thus earn revenue? Is there money to be made stepping into the middle of what is otherwise a DIY situation? Here are a few quick ideas I had:

• Buyer’s Agent: There is a (small) market for car buying agents–people who have established relationships with car dealers, and can help consumers get the best prices, sourced from a large network of dealers, without price haggling. What if a banking agent could develop special relationships with banks and credit unions, and be able to offer special exclusive deals to consumers who worked with that agent? The consumer would be willing to pay a reasonable fee for that. This model would work if….
• …The agent could guarantee the delivery of a certain volume of business to the banks and credit unions. It would like being an independent sales rep for the bank and credit union, and the financial institution would be willing to pay a commission for those sales.
• Commercial Loan Participations. A banking agent could be a great resource for coordinating the funding of large loans that individual financial institutions couldn’t or wouldn’t want to fund.  It’s likely both the borrower and the lender would pay for this matchmaking and coordination.
• Continuous Evaluation: A banking agent could continuously evaluate his/her client’s banking relationships (for both deposits and loans), and proactively create better deals and arrangements with other banks, and then let the customer know when it was ready. The customer would find value in this and would pay accordingly.

What are your ideas? Let’s add to this list. Or, on the flip side, feel free to disagree!

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But lately, I’ve got to wondering something: Is “engagement banking” enough? To have an engaged customer/member base is certainly an improvement from where most banks and credit unions are today…but does engagement banking go as far as we really need to take it in this industry? Will engagement alone help us break free from being commodity financial providers?

Or do we need a heavier dose than just mere engagement?

I’d like to suggest that what banks and credit union brands really need is “enthrallment banking.” As in, “I’m captivated with this brand because it resonates so strongly with me.” For instance, Apple loyalists aren’t engaged with Apple, they’re captivated by it.

You may be thinking, “one step at a time, Jeff–we have to walk before we can run.” And maybe that’s true. But it doesn’t hurt to ask ourselves today, “what is our real end goal: engagement or enthrallment?”

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I agree with Bryan. But his comment also got me wondering: how many MEMBERS really understand the difference between being a member and a customer?

As you know, I’m all about helping bank and credit union folks think like entrepreneurs. And I believe great entrepreneurs are experts at exploiting marketing opportunity.  There is a a huge, exploitable marketing opportunity in the following:

Making the difference between a customer and a member strikingly, painfully, ridiculously, unmistakably clear.

Note: As you may have heard me argue before, the question is not “how is a being a member BETTER than being a customer?” It’s simply “how is it different?”

Today, I don’t believe this difference is clear at all, nor is the experience of being a member noticeably different from the experience of being a customer. So here are three quick ideas of ways credit unions could make members really feel like members, not customers:

1)  Difference: Members own a part of the CU; customers do not.

Making it Clearer:  Make them act like an owner and be accountable to that responsibility. Don’t give members the option to vote; require them to vote.

2)  Difference: Members are co-owners with other members

Making it Clearer: Connect members with each other. Introduce 5 members to 5 other members tomorrow. Facilitate them getting to know each other. Bond them together.

3)  Difference: A member must qualify to join

Making it Clearer: Emphasize exclusivity:  put more focus on who can NOT join.  Make it clear who is not lucky enough to even qualify, and you will make the value of membership seem higher.

Now it’s your turn: what other differences can we make clearer?

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Perhaps the funniest part is how I came across this particular item: I was talking to an entrepreneurial friend about banking, and without my prompting, he pulled this up on his phone. I think that says something about the financial industry!

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1. Bankers need to think more like entrepreneurs and less like bankers
2. I love to help bankers identify business lessons learned from other non-banking industries, and apply them to banking

To help achieve these two things, I’ve long been planning to create a book club and/or reading group for entrepreneurial bankers. That’s why I’m excited to announce that the American Bankers Association’s ABA Banking Journal online has published a review I wrote of the business book, Rework, by Jason Fried and David Hansson of 37Signals.

Read my review of Rework for bankers here.

To whet your appetite for the review…

Rework is probably not a book that will be read proactively by many bankers…although I’m hoping to change that. Most bankers will say “this book is written for startups and new economy companies–this will never work in the banking world.” And they, of course, would be wrong. There is a lot of great content in Rework that bankers can apply to their businesses.  With its concisely written chapters and simple-yet-profound and seemingly contrarian messages, the book reads very quickly in about three hours.

In the review, I explore three main concepts that emerge from the book:

1. Prioritize your work
2. Say no
3. Be real, and be yourself

Read the review of Rework now. And please email me to let me know if you’d be interested in being a member of my to-be-developed business book club for bankers.

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Differentiation isn’t actually something you do to help your own bank or credit union. Instead, it’s something you do for your customers/members. It’s a gift you give them, that helps them sort through all the options available to them. That means one very important thing:

Differentiation is not a tool of persuasion. It is a tool of clarification.

We tend to think of differentiation as a way of talking people into banking with us. But that’s not the real purpose at all. Instead, the real purpose is to help people understand their options and make an intelligent choice for them.  You see, your bank or credit union’s potential customers/members have tons of alternatives and options in front of them. They’re awash in a confusing sea of choices, almost all of which look extremely similar. It’s daunting for them to sort through all these options, because they have such a hard time telling them apart. They’re trying to make a smart choice for themselves, but it’s tough because they can’t see the differences between their options.

Differentiation is the gift you give them to make this process easier. It’s for them, not for you. But in the end, it comes back around to serve your bank or credit union very, very well. Why? Because it means you get BETTER customers/members–ones who chose you because they felt you were the best fit from them, rather than just having chosen you practically at random from a list of 10-20 options.

This principle, of course, exists in many forms outside the world of banking.  I’m reminded of a keynote presentation I saw at the Oregon Bankers Association conference this summer, from speaker and former NBA player Walter Bond.  Walter talked about how when he was being recruited by college coaches, he had a really hard time deciding where to go, because every coach showed up and it all looked the same.  They said the same things, made the same promises, and had the same approach.  In other words, Walter had no differentiators to help him sort through his options.

The same thing is happening to your customers/members as you are recruiting them. So what can you do to help them sort through those options?

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So how do you define “quality” of your customer base?  I’d like to propose two criteria, both of which are given equal weight:

1) Profitability–your ability to make money from the people you do business with

2) Engagement–the amount that people give a damn about your bank or credit union (and thus, the more they are likely to be loyal, advocate for you, generate WOM, etc.)

In my experience, community banks and credit unions have a great deal of progress to make on both of these criteria. We find ourselves with lots of unprofitable customers because we don’t have the guts, market positioning and focus to say no. We don’t communicate our profitability expectations to customers, and don’t really even enforce the unspoken expectations.

We also find ourselves with very very few–if any at all–engaged customers. We may have a few not-disengaged customers, but have very few people who are truly excited about who we are, what we do, and how we are aligned with them. We have very few customers who have chosen to bank with us because they feel we are the one and only true fit for them. Instead, they have chosen us because we were most convenient, best priced, or passively recommended by a friend.

Do you have what it takes to improve your customer base–or just make it bigger?

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“Don’t try to be smarter than your competitors, because any competent competitor will be working just as hard to be smarter than you.  The trick is to have no competitors”

Warren Buffett

CEO, Berkshire Hathaway

Bankers tend to ask themselves “how can we make our bank better than the competition.” Entrepreneurs, rather, ask “how can we make our bank so different than it has no competition?” That’s a decommoditized company.

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