Jeff Stephens

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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ABA Banking Journal Publishes My Book Review of “Rework”

// October 13th, 2010 // 1 Comment » // Banking, Books I'm reading, Jeff Stephens, New banking ideas, Non-technical innovation

As you may already know about me, there are a couple things I believe strongly:

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 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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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.

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Create something that can get criticized

// June 21st, 2010 // 2 Comments » // Banking, Books I'm reading, Innovation, Jeff Stephens, Non-technical innovation

I have long argued–to creatives, my clients and bankers and credit union folks at large–that it’s better to create something that some people will LOVE, others will HATE…than to create something that people are indifferent to.  That stands true whether you are creating an ad for the local newspaper, a brand for a new financial institution, or a presentation you will give at a conference.  You need to polarize people–if you leave anyone indifferent, you have wasted your time.

As I was reading Tribes: We Need You to Lead Us by Seth Godin the other day (a book that’s been on my list forever, and I’ve finally gotten to), I realized Seth had given me a new way to phrase my message: create something that can get criticized. Our whole business culture is based on the idea of not getting criticized–the idea that criticism is a bad thing, to be avoided.  The truth is that if you want to change the world (which I’m assuming you do–if not, you might want to unsubscribe from this blog), you WANT to get criticized. Because when you get criticized, it means you’ve created something WORTH reacting to.  Most ideas and work is so boring that nobody reacts, because it’s not worthy of a reaction.

What can you create today that will get criticized…and therefore noticed?

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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!

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Affiliate Marketing in Banking

// November 18th, 2009 // No Comments » // Banking, Innovation, Jeff Stephens, New banking ideas, Non-technical innovation

As I was reading something businessy lately, a question popped up in my mind:  why isn’t there affiliate marketing in banking?

Maybe there is, in a few cases, on a B2B level—you might argue LendingTree is affiliate marketing for lenders.  But that’s not what I mean.  There’s not, to my knowledge, any affiliate marketing program that could leverage the millions of retail customers out there. For instance, how many Bank of America customers have blogs or websites? Probably millions. Why not take a page from Amazon.com’s book (pun intended) and set up a killer affiliate program to drive traffic to the bank and kick back a reward to the referring site for accounts opened online?

I think I know why.

Because that’s not what bankers do.

Because that’s not how banking works.

And because, likely, nobody has ever really thought about it.

If you can’t tell already from my first few posts on this blog, one of my big pet peeves is that bankers don’t tend to look at business concepts (like affiliate marketing) and try to figure out how it might apply in their industry.

In my opinion, the best and most important activity any entrepreneurial banker can do, is this:

Look at other industries, see what’s successful, and then ask, “how can I apply this to banking?”

I’m not here to tell you affiliate marketing should be the future of banking.  I don’t have an opinion at this point, because I haven’t given it much thought.  Maybe I can think it over and write another post about that.  But I do know this:  at least I remembered to ask myself “how can this apply to banking?”  The answer to that question is less important than the fact that it was asked in the first place.  That’s how innovation happens.

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