Jeff Stephens

Introducing Tribed, and Wag: The Bank for Dog Fanatics

// October 17th, 2011 // 1 Comment » // Banking, Banking business models, Banking business strategy, Decommoditization, Engagement banking, Enthrallment banking, Entrepreneurial Lessons, Jeff Stephens, Tribed, Wag: The Bank for Dog Fanatics

Friends: I am very excited to share a new entrepreneurial venture with you that I’ve been working on for quite a while, albeit anonymously: Tribed, and Wag: The Bank for Dog Fanatics. Please take a moment to watch this video to learn more.

Tweet This Post

Is Engagement Banking enough?

// February 4th, 2011 // 4 Comments » // Banking, Banking business strategy, Decommoditization, Engagement banking, Enthrallment banking, Jeff Stephens

First, let me be clear: I’m a big fan of the concept of “Engagement Banking.” I really like the Engagement Banking site from Sapient Nitro, and love what the guys at Geezeo are doing. The only thing I don’t like about the Twitter hashtag #engagementbanking is that I didn’t think of it. And if you’ve paid even a shred of attention to what CBC is all about, it’s got brand engagement written all over it.

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?”

Tweet This Post

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?

Tweet This Post

Growth: Improving the quality of your customer base, not the size of it

// September 3rd, 2010 // 13 Comments » // Banking, Banking business strategy, Decommoditization, Innovation, Jeff Stephens

There’s one thing I’ve been trying to be more clear and upfront about with my clients who I consult with: my number one goal is not so much to grow the size your customer (or member) base, it’s to improve the quality of it. In my mind, when you improve the quality of it, you are growing:  growing stronger as a company and as a brand.

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?

Tweet This Post

Warren Buffett on…Banking?

// August 17th, 2010 // No Comments » // Banking, Banking business strategy, Decommoditization, Entrepreneurial Lessons, Jeff Stephens, Non-technical innovation

Well, I don’t think Mr. Buffett was speaking specifically about banking when he made this comment, but boy oh boy does it ever apply.  Here’s my favorite new quote:

“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.

Tweet This Post

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?

Tweet This Post

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.

Tweet This Post

The Decommoditization Manifesto, Part 1

// June 1st, 2010 // No Comments » // Banking, Brands and Branding, Creative Brand Communications, Decommoditization, Innovation, Non-technical innovation

As I was preparing for my presentation last week to the Marketing Association of Credit Unions called The Art of Decommoditization, I found myself asking, “why do I enjoy this topic so much?” I realized the answer is pretty simple: it’s the perfect convergence of everything I believe in, in banking, branding and marketing. It brings together a strong business strategy that becomes one with brand strategy, word of mouth marketing, experiential brand development and multi-sensory marketing. As such, I admit it’s kind of difficult to articulate at times. But I hope my audience at MAC got the message.

That’s probably why I really enjoyed writing the newest position paper on banking business strategy and branding we created for Creative Brand Communications. We called it “The Decommoditization Manifesto, Part 1” and it’s now available for free download when you register.

I’m happy to say it’s already getting great reviews and feedback. How many “parts” will there be? Not sure yet–we’ll have to see as it comes, but I’m thinking at least three parts if not more.

I hope you’ll download the position paper now, and enjoy!

Tweet This Post