I was painting my deck and fence yesterday with some high school students that my wife recruited (one benefit of having a high school teacher as a spouse is that you are never at a loss for good baby sitters and cheap physical labor). As we were painting, one the girls whipped out her cell phone and started to hold a very public conversation with her friend about borrowing $10 so that she can put a Homecoming dress on layaway (“Borrow” $10?!?! I’m about to pay you much more than that in cash!)
That’s my point. Here is a teenage girl, an hour away from cash income, and she’s already working a “loan” to cover her spending. This is worse than a payday loan – it’s a post-payday loan.
In reality, aren’t these teens a fantastic market for us to target?
- Many have ATM/Debit cards
- Too many have credit cards
- They have nothing but DISPOSABLE income
But while targeting teens for checking and credit cards, I feel we have a responsibility to help them become more fiscally sound banking customers too! A few ideas came to mind as I lay in bed last night pondering this subject:
- Why not offer a special low balance, low interest credit card for teens. Too many companies take advantage of teens with 20%+ interest rates. If a card only has a $500-$1,000 limit, where’s the risk vs. the gain of building great relationships at a young age?
- Why not make students pass a written test about saving and credit before credit or debit cards are approved? If nothing else, it would help them to think about money in a new way and would differentiate our efforts in the minds of the student’s parents (and don’t we want to be hero’s in their eyes?)
- Many of us sponsor school activities, but how many of us really leverage them? Why not negotiate to hold a student focus group at the school. Use it to learn:
. - What percentage of students has a checking account?
. - Did they simply choose their parents bank or credit union?
. - Do they understand how interest works on credit cards
. - What features are they looking for (text updates, online banking, etc.)
I’ll have these students back tonight to finish the painting; maybe I’ll hold my own teen focus group and get back a little more for my investment than a beautiful back yard.
Cheers.
Wednesday, September 12, 2007
Smells Like Teen Spending
Customer Service at its finest!
Just when I thought I was out of things to talk about, I had a WOW experience!
Once a month, I travel to our corporate offices for some face-to-face time with the rest of the MarketMatch team. During my trip, I usually stay at a chain hotel that offers a great rate, a below average free breakfast and rooms that are pretty spartan (and not always very clean). Each time I stay, I usually end up switching rooms at least once because the room they originally gave me either smells like a smoke shop or is dirty enough to refuse to take your shoes off. But it's quiet, I feel safe and the staff is pretty nice. In my mind, that (almost) makes up for the shortcomings.
As I prepare for my October trip, I learn that the new Hampton Inn has opened and is ready for my reservation. I am already a HUGE fan of Hampton properties (well, Hilton in general is great, but I love the Hampton price point!) so it took me all of half a second to look into their rates.
Imagine my disappointment when I realized that their rooms are, on average, $30 per night more expensive than the previously mentioned not-so-clean chain hotel. To me, that $30 would be worth it, but in the interest of being economically responsible, it would be best to stay at the cheaper place. But just in case, I asked to speak to the manager.
I told the Hampton Inn manager (his name is Jason) of my experiences with the other hotel down the street and that while I am already a HiltonHonors Silver VIP member, I will have to continue my relationship with the other hotel because of his price. And that's when it happened. He offered me the AARP rate that split the difference. Now we're talking. A better night sleep, better breakfast, double dip points (that's what Hilton calls it when you earn hotel points AND airline miles in the same stay) and the peace of mind that the hotel is clean...it is brand new!!! No more sticky comforter!
I did however hesitate in that he didn't match the price, he only split the difference. Jason immediately noticed my hesitation and quickly jumped in with, "how about this...you stay here in October at this rate and when you get here we will talk about a permanent negotiated rate for all people who travel to this hotel for your company." DONE!!! I was so happy I could hardly stand it.
So, here's the obvious question...how does this relate to what you do? And the answer is...VERY CLOSELY.
While we all know that, as bankers, we never want to negotiate price, BUT, as bankers, we also know that our best customers can be tempted by the price down the street. And while our customers will still continue to do most of their business with us, when it comes to those customers who are business owners (or in my case, an employee) they will do what they have to in order to do what is best for their business. Even if that means they settle for mediocre service, no frills and fewer choices. In order to be economically responsible they sometimes have to settle for less to save more.
So here's my question to you...is it worth splitting the difference to get the business and fill the room? An occupied room at a lower rate is better than a vacant room. Or in your terms, a big loan at a lower rate is better than no loan at all...apply this to deposits...an account at a higher rate is better than no deposit at all.
I know that this is, essentially, negotiating a rate. However, I would argue that it is more about managing a relationship than negotiating price. And this may not be right for everyone...maybe just your VIP customers. And it really boils down to empowering your employees to do what is right to get the business and enhance the relationship with your best customers.
Your competition wants what you have...YOUR CUSTOMERS...especially your BEST customers. What will you do to keep them?
Not sure where to start? Call me. I'll tell you!
And to all of you ABAMN members, see you in Baltimore!!!
Jenna
Once a month, I travel to our corporate offices for some face-to-face time with the rest of the MarketMatch team. During my trip, I usually stay at a chain hotel that offers a great rate, a below average free breakfast and rooms that are pretty spartan (and not always very clean). Each time I stay, I usually end up switching rooms at least once because the room they originally gave me either smells like a smoke shop or is dirty enough to refuse to take your shoes off. But it's quiet, I feel safe and the staff is pretty nice. In my mind, that (almost) makes up for the shortcomings.
As I prepare for my October trip, I learn that the new Hampton Inn has opened and is ready for my reservation. I am already a HUGE fan of Hampton properties (well, Hilton in general is great, but I love the Hampton price point!) so it took me all of half a second to look into their rates.
Imagine my disappointment when I realized that their rooms are, on average, $30 per night more expensive than the previously mentioned not-so-clean chain hotel. To me, that $30 would be worth it, but in the interest of being economically responsible, it would be best to stay at the cheaper place. But just in case, I asked to speak to the manager.
I told the Hampton Inn manager (his name is Jason) of my experiences with the other hotel down the street and that while I am already a HiltonHonors Silver VIP member, I will have to continue my relationship with the other hotel because of his price. And that's when it happened. He offered me the AARP rate that split the difference. Now we're talking. A better night sleep, better breakfast, double dip points (that's what Hilton calls it when you earn hotel points AND airline miles in the same stay) and the peace of mind that the hotel is clean...it is brand new!!! No more sticky comforter!
I did however hesitate in that he didn't match the price, he only split the difference. Jason immediately noticed my hesitation and quickly jumped in with, "how about this...you stay here in October at this rate and when you get here we will talk about a permanent negotiated rate for all people who travel to this hotel for your company." DONE!!! I was so happy I could hardly stand it.
So, here's the obvious question...how does this relate to what you do? And the answer is...VERY CLOSELY.
While we all know that, as bankers, we never want to negotiate price, BUT, as bankers, we also know that our best customers can be tempted by the price down the street. And while our customers will still continue to do most of their business with us, when it comes to those customers who are business owners (or in my case, an employee) they will do what they have to in order to do what is best for their business. Even if that means they settle for mediocre service, no frills and fewer choices. In order to be economically responsible they sometimes have to settle for less to save more.
So here's my question to you...is it worth splitting the difference to get the business and fill the room? An occupied room at a lower rate is better than a vacant room. Or in your terms, a big loan at a lower rate is better than no loan at all...apply this to deposits...an account at a higher rate is better than no deposit at all.
I know that this is, essentially, negotiating a rate. However, I would argue that it is more about managing a relationship than negotiating price. And this may not be right for everyone...maybe just your VIP customers. And it really boils down to empowering your employees to do what is right to get the business and enhance the relationship with your best customers.
Your competition wants what you have...YOUR CUSTOMERS...especially your BEST customers. What will you do to keep them?
Not sure where to start? Call me. I'll tell you!
And to all of you ABAMN members, see you in Baltimore!!!
Jenna
Sunday, September 9, 2007
The Marketing Silo
First off--apologies for not writing much lately. As you know, I am in the middle of transitioning jobs which put me in a place where I was working two jobs at the same time for a period of three weeks. Needless to say, that didn't give me much free time (or sleep). Now that I am settling in to my new position at Arena Stage, I am happy to say that I would like to concentrate a little more on writing.
Today's topic: the Marketing Silo. I find it interesting the more I work with large organizations, mostly from a consultant stand point, the more I find marketing departments which are functioning almost as a separate entity from the rest of the organization. For some organizations, the marketing department is somewhat of a mystery for people who don't have an external relations function in their job.
For most arts organizations, marketing is a critical function. Due to tight cash flow situations, marketing departments are expected to consistently hit their goals while reducing expenditures. To accomplish this, marketing must be looked upon as a central decision-maker for almost all operational decisions, not just the ones that obviously affect external affairs. For example, a shift in valet parking companies might cause longer waiting times resulting in unhappy customers and subscriber attrition. Although valet parking might not be viewed as a marketing function, it definitely affects the customer. I would encourage marketing directors to become involved in all decisions that affect or touch the customer.
With that said, marketing directors need to become ambassadors, especially at large organizations. Go out of your way to meet everyone, and encourage everyone to give you feedback on the activities of the marketing department. Yes I know, you might get that person who is incredibly nit picky and will visit you every week trying to convince you that if you increase the point size of the text in your ads one point that you will bring in exponentially more income. However, I have been incredibly lucky to work with brilliant people who came up with amazing ideas whose job function has nothing to do with marketing.
Marketing departments are being taxed with becoming more creative as budgets are cut and sales goals increase. If you work at an arts organization, you have a wealth of creative people just outside your door--reach out to them. Share your marketing plans. Invite feedback. Give thanks and recognize all contributions.
In just my very short time at Arena Stage, I have been visited by our Producing Artistic Associate, Master Sound Engineer, Director of Audience Development, and several others who have floated some absolutely fantastic marketing ideas my way. So if you by chance are working in an environment where marketing is consider an island to itself, break down those walls and eliminate the silos, and I guarantee you will be happy with the results.
Today's topic: the Marketing Silo. I find it interesting the more I work with large organizations, mostly from a consultant stand point, the more I find marketing departments which are functioning almost as a separate entity from the rest of the organization. For some organizations, the marketing department is somewhat of a mystery for people who don't have an external relations function in their job.
For most arts organizations, marketing is a critical function. Due to tight cash flow situations, marketing departments are expected to consistently hit their goals while reducing expenditures. To accomplish this, marketing must be looked upon as a central decision-maker for almost all operational decisions, not just the ones that obviously affect external affairs. For example, a shift in valet parking companies might cause longer waiting times resulting in unhappy customers and subscriber attrition. Although valet parking might not be viewed as a marketing function, it definitely affects the customer. I would encourage marketing directors to become involved in all decisions that affect or touch the customer.
With that said, marketing directors need to become ambassadors, especially at large organizations. Go out of your way to meet everyone, and encourage everyone to give you feedback on the activities of the marketing department. Yes I know, you might get that person who is incredibly nit picky and will visit you every week trying to convince you that if you increase the point size of the text in your ads one point that you will bring in exponentially more income. However, I have been incredibly lucky to work with brilliant people who came up with amazing ideas whose job function has nothing to do with marketing.
Marketing departments are being taxed with becoming more creative as budgets are cut and sales goals increase. If you work at an arts organization, you have a wealth of creative people just outside your door--reach out to them. Share your marketing plans. Invite feedback. Give thanks and recognize all contributions.
In just my very short time at Arena Stage, I have been visited by our Producing Artistic Associate, Master Sound Engineer, Director of Audience Development, and several others who have floated some absolutely fantastic marketing ideas my way. So if you by chance are working in an environment where marketing is consider an island to itself, break down those walls and eliminate the silos, and I guarantee you will be happy with the results.
Tuesday, September 4, 2007
CRM - The Forgotten Marketing Tactic
Hi Folks!
After a nice summer break, I'm back with important information on customer relationship management (CRM). Most companies, public, private and entrepreneurial typicaly get so caught up in revenue generation and customer acquisition they forget about retention and managing the relationship with current customers.
Is revenue and new customers important? Heck yeh. But don't forget that an effective CRM plan will also positively impact your bottom line and overall profit margin.
A Harvard Business review study on customer profitability and lifetime value revealed that companies can boost their profits by almost 100% by retaining just 5% more of their customers.
A study by CRMGuru found that company’s that successfully implemented retention plans increased customer satisfaction by 51%.
It's important to understand the complete Customer Relationship Cycle and what you should be striving for. The goal should be post-satisfaction stage and include loyalty, and ultimately, advocacy. This is where many companies, big and small, fall short.
Customer Relationship Cycle
--Awareness. Prospect recognizes need for service
--Knowledge. Gained thru PR or promotional presence
--Consideration. Prospect weights needs vs. solution
--Selection. Prospect seeks solution based on ease of information, opinions of others, how your product meets their individual needs
--Satisfaction. Prospect becomes client (many companies stop efforts here -- after the sale)
--Loyalty. Customer demonstrates commitment to firm by repeat purchases
--Advocacy. Customer becomes advocate of your product and actively promotes it. This is the most personal relationship you can have with your customer!
According to permission marketing guru, Seth Godin, the process to move a prospect thru the sales cycle is:
--Stranger to Friend
--Friend to Customer
--Customer to Multi-buyer
--Multi-buyer to Advocate
You see, the "advocate" is the golden goose. This person not only is loyal to your company with repeat purchases, but is your #1 free marketer – they tell their friends, family and business associates about your company's products and services and they're not even on your payroll!
So make sure you include a CRM Plan as part of your overall Marketing Strategy and benchmark meterics before and after plan is implemented...I'm sure you'll see favorable results.
After a nice summer break, I'm back with important information on customer relationship management (CRM). Most companies, public, private and entrepreneurial typicaly get so caught up in revenue generation and customer acquisition they forget about retention and managing the relationship with current customers.
Is revenue and new customers important? Heck yeh. But don't forget that an effective CRM plan will also positively impact your bottom line and overall profit margin.
A Harvard Business review study on customer profitability and lifetime value revealed that companies can boost their profits by almost 100% by retaining just 5% more of their customers.
A study by CRMGuru found that company’s that successfully implemented retention plans increased customer satisfaction by 51%.
It's important to understand the complete Customer Relationship Cycle and what you should be striving for. The goal should be post-satisfaction stage and include loyalty, and ultimately, advocacy. This is where many companies, big and small, fall short.
Customer Relationship Cycle
--Awareness. Prospect recognizes need for service
--Knowledge. Gained thru PR or promotional presence
--Consideration. Prospect weights needs vs. solution
--Selection. Prospect seeks solution based on ease of information, opinions of others, how your product meets their individual needs
--Satisfaction. Prospect becomes client (many companies stop efforts here -- after the sale)
--Loyalty. Customer demonstrates commitment to firm by repeat purchases
--Advocacy. Customer becomes advocate of your product and actively promotes it. This is the most personal relationship you can have with your customer!
According to permission marketing guru, Seth Godin, the process to move a prospect thru the sales cycle is:
--Stranger to Friend
--Friend to Customer
--Customer to Multi-buyer
--Multi-buyer to Advocate
You see, the "advocate" is the golden goose. This person not only is loyal to your company with repeat purchases, but is your #1 free marketer – they tell their friends, family and business associates about your company's products and services and they're not even on your payroll!
So make sure you include a CRM Plan as part of your overall Marketing Strategy and benchmark meterics before and after plan is implemented...I'm sure you'll see favorable results.
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