Jeff Stephens

5 Responses to CU Watercooler’s Discussion of Wag, The Bank for Dog Fanatics

// October 24th, 2011 // No Comments » // Banking, Banking business models, Credit Unions, Engagement banking, Tribed, Wag: The Bank for Dog Fanatics

On Monday, the CU Water Cooler Liquid Lunch show featured a conversation between host Carla Day and special guest Jimmy Marks. On the agenda was a discussion about initial thoughts on Wag, The Bank for Dog Fanatics. I was busy during the live show and was not able to dial into the call, but I listened to the replay of the show and wanted to provide a few comments and responses.

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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Creating a “people helping people” KPI for credit unions

// April 14th, 2011 // No Comments » // Credit Union, Credit Unions, Credit union business strategy, Innovation, Non-technical innovation

The credit unions I’ve worked with have all been very sincerely committed to the credit union principles that their industry is based on. The foundation of these, of course, is the idea of “people helping people.” The industry believes, in theory, that as long as they are delivering on this “people helping people” mission (and obviously as long as they are able to run a sustainably functioning business), that’s all that matters.

So, why aren’t more credit unions creating a custom Key Performance Indicator (KPI) calculation to measure their delivery of this “people helping people” philosophy? Or, why hasn’t the industry created one common KPI calculation for all credit unions to use and measure their effectiveness with? It seems to me that this KPI would be the most important number on any credit union’s management dashboard.

What factors would the formula be calculated upon? I would see it taking into consideration several criteria that would together represent a picture of what the credit union’s “total impact from people helping people” is. Here are a few inputs that would make sense for the formula:

• Number of first homes purchased by members with CU funding
• Revenue growth of businesses as a result of CU funding
• Jobs created by business member clients
• Jobs created by the credit union itself as an employer, or through the credit union’s growth (construction workers on a new branch, etc.)
• Cumulative interest expenses saved by members who refinanced with the CU
• Number of new members who were previously unbanked
• Cumulative credit score enhancement of members

This is just a starter list of the many things that could be included in this calculation to give a comprehensive view of the total impact of a credit union’s commitment to “people helping people.” Not only would this be key for management, it could also spur some great PR and word of mouth.

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Credit unions: how different is a member from a customer?

// October 29th, 2010 // 3 Comments » // Banking, Credit Union, Credit Unions, Credit union business strategy, Entrepreneurial Lessons, Jeff Stephens

I write this post from the CU Watercooler Symposium.  As I sit here listening to the speakers, I am reminded of a recent tweet from Geezeo’s Bryan Clagett, in which he said:  ”If you do not know the difference between a “member” and a “customer”, then you should not be selling to credit unions.”

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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Differentiation is not a tool of persuasion

// September 20th, 2010 // 4 Comments » // Banking, Banking business strategy, Credit Unions, Decommoditization, Jeff Stephens, Non-technical innovation

Nearly every marketer and CEO talks of differentiation. They ask, “how can we set ourselves apart from the competition [so that we can be more successful]?” It’s an important question. But it’s also a misunderstood question, and one that needs to be understood if we are ever to decommoditize our banks and credit unions.

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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Customer Expectations in Banking

// August 14th, 2010 // 2 Comments » // Banking, Banking business strategy, Banks, Credit Unions, Decommoditization, Jeff Stephens

Every bank and credit union’s customers/members have expectations–expectations for service, quality and other criteria you must meet.

The question is: who set the customer’s expectations for YOUR bank or credit union?

Did you set those expectations? Or did the industry do it for you?

The industry did. Tradition helped out. And convention sealed the deal. You had nothing to do with it.  Welcome to yet another massive downside of being a commodity financial services provider.

See, when you’re a commodity, you’re selling the same stuff as everyone else, and doing it in just about the same way. So, your customers/members have a point of reference; they have something to compare you to, because there are so many other banks or credit unions doing the same thing, and years of conditioning and experience with your competitors have created those expectations for them.

When you break out of being a commodity, you have no competition–nobody else does what you do. As a result, it’s much harder for customers/members to have expectations, because they’ve never experienced anything like you before: what you provide, or how you do it. They have no point of reference, nothing to compare you to.

When you’re no longer a commodity, you get to set the customer expectations yourself. Wouldn’t that be nice?

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#MoveYourMoney: Not As Good for Banks and Credit Unions As They Think It Is

// July 23rd, 2010 // 14 Comments » // Banking, Banking business strategy, Banks, Brands and Branding, Credit Unions

I suspect this might be a pretty unpopular perspective. I’m not trying to be a downer, rather a realist, entrepreneur and business strategist.

Over the last several months, the “move your money movement” has gotten a lot of attention, thanks to websites like http://moveyourmoney.info. On Twitter you’ll frequently see hashtags like #moveyourmoney and #banklocal.  More and more, I see links posted to articles all over the web talking about how credit unions and community banks are a great alternative to big banks.  Many seem to be hailing this as one of the best things to happen to community banks and credit unions.  Although I’m not studying market share numbers, it does seem rather undeniably true: consumers are moving their money from big banks to smaller, local banks and credit unions.

There’s just one problem. And it’s a big one, rendering this “movement” only mildly useful for any individual bank or credit union.

When a consumer opens an account at your bank or credit union because of #moveyourmoney, they are doing so because they DON’T want an account at a big bank. Furthermore, they’re opening an account at your bank or credit union simply because you are a smaller, local alternative…NOT a big bank.

Do you see the problem? They are not choosing you for who you are…they are choosing you for what you are NOT. And unfortunately, you are just one of thousands of banks and credit unions who are NOT big banks.  (Metaphor/Translation: “Honey, I’m not marrying you because I actually love YOU, you silly goose; I’m marrying you because you are NOT someone I hate…and you are available. Duh.”)

So what does this mean? It means that these new customers and members you’ve just acquired are not necessarily a good fit for you at all (just because they’re a bad fit for Chase doesn’t mean they’re a good fit for Acme Credit Union).  It means they will be just as fickle and transient as your other customers/members; just as price-sensitive and ready to “move their money” again when a better deal comes along.

You see, there’s one simple fact, and there’s unfortunately no way to get around it (not even with a grassroots effort like #moveyourmoney):

Long-term prosperity at your bank or credit union only happens when consumers proactively choose to bank with YOU for who YOU are:  because they feel you are the one and only fit for them, and they refuse to live without you.

The Bottom Line: If you are growing because of the “move your money” effect, you are the random and lucky recipient of a cultural shift outside your control…and you will become keenly aware of just how outside your control it truly is, once the effect starts wearing off. Instead, focus on attracting people who love YOU.

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What is your maximum potential market share?

// July 9th, 2010 // No Comments » // Banking, Banks, Credit Unions, Decommoditization

What is your bank or credit union’s maximum potential market share?  When you allow yourself to operate in a commoditized banking environment, the answer is pretty simple:

Size of market divided by # of competitors = your maximum market share

Unless you break the cycle of commoditization, your financial institution’s market share potential will never stray greatly from this simple calculation.  Download the free Decommoditization Manifesto, Part 1 to begin learning how you can break free from the commodity dynamic and earn yourself a disproportionate market share.

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