Bringing Retail to Financial

I’m just brain stormin’ here.

Last week, I saw an ad from Kmart advertising a forgotten concept … layaway!

Immediately, 3 things jumped to mind:
1. “Wow, they really have their finger on the pulse of the economy.”
2. “What in the world is so expensive at Kmart that you’d need layaway?”
3. “How can we bring this idea into the financial world?”

Layaway, a purchasing agreement by which a retailer agrees to hold merchandise secured by a deposit until the product price is paid in full by the customer, is an idea whose time may have returned.

Let’s face it, job loss may be up, foreclosures may be soaring, the stock market is a roller coaster ride with more downhills than up, and a recession may be imminent – if not already here – but we’re still Americans darn it! We still want more than we can afford. We still believe in buy it now and pay for it later.

Layaway is the perfect answer. Heck, you can even use layaway for online purchases now … just check out http://www.elayaway.com/.

OK, so how do we take advantage of this in our institutions?

LAYAWAY CDs

What if we offered a “Layaway CD” with a term of 3, 6 or 9 months (maybe a year if you feel lucky) where the customer can make regular deposits throughout the term but has a penalty for early withdrawal?

The CD is kinda like a layaway with interest. It has an end date goal … the customer can’t touch the money … and a CD offers what no layaway can – a fixed INTEREST RATE!

If a customer wants a big screen TV, for instance, but can’t afford it now and doesn’t want to add to their credit, they simply open a Layway CD and start putting money aside with the understanding that they can take that TV home in a few months.

Maybe this will help spark an idea to help you differentiate your shop and provide a product that your customers don't even know they need yet.

Take care,
Eric

From the trenches: It's Ok to Say You Don't Know

First off, an apology for not writing much lately. However, since I am a practitioner and not an academic, my days have been filled with trying to address the worsening economic reality, rather than writing about it. These are the days that make me wish sometimes I was in academia, because studying this phenomenon would be really interesting.

If you are like me, and like many of my colleagues, you have been hearing one question a lot lately, probably from board members and executive staff: how is the economy going to affect our sales for the rest of the season, and how do we adjust to anticipate for the impact?

I am proud of the Arena Stage board and senior staff for taking significant steps to prepare for the impact of the market crash, but if you are in a position where you are ultimately responsible for providing accurate sales projections and models like I am, it is one hell of a task. When asked earlier this week by several members of the executive committee of our board how bad it is going to get, I responded with only three words -- I don't know. They were the only three words that I thought I could deliver with integrity and honesty.

I have been running models everyday for the past four weeks. I have extensively studied the impact of the 1987 market crash and the crash post 9/11 to find some sort of path to guide me. But I ultimately decided that there is no precedent that I could find in Arena Stage's 58 year history that could accurately guide me. Which leaves me in a place where I have to "go with my gut." I hate that. I am a math and science guy in an artistic world (I have minors in mathematics and physics). I have been trained over and over again to go with scientific models because one's gut is unreliable. And here I am with nothing in our history to guide me.

So I felt that the executive staff of the company and the board needs to know that I will work day and night to get us to a place where we have what I feel to be the most reliable model that reflects the impact of the market crash, but it will be my best guess. Even though this makes me uncomfortable, I am reassured by knowing that as this is my area of expertise, I believe my projections will be the most accurate.

That being said, at the end of the day, when asked what is the impact of what Alan Greenspan calls the "worst economic crisis he has seen" (and the man is 82 years old), I feel that the only honest answer any of us can say is -- I don't know. If you believe that this is a once in a lifetime economic failure as I do, then no one has seen the impact of a market failure of this size since my grandparents generation during the Great Depression.

Morale of post: in reporting to executive staff and board, do your due diligence, prepare conservative sales models and projections, and don't be afraid to admit what you don't know.

PostScript:
From Michael Kaiser's ArtsManager Blog: "None of us running arts organizations in the United States has experienced this level of economic meltdown. The experiences we had in more recent financial downturns do not prepare us adequately for what is happening now. And the full impact of the financial crisis has yet to be felt in many cities. I know I need to make changes to the operations of the Kennedy Center, I simply do not know how much to change and over what time frame. "

Trick or Treat....Your call!

Greetings....and Happy Halloween!

Well, we are 28 hours from the start of trick or treat and my kids are excited...well, they may be feeding off my excitement! I love trick or treat. The neighborhood is alive with activity, electricity is in the air with the excitement and you see parents and kids having a great time together. Oh, and the big benefit...CANDY!

For off of us bank and credit union marketers, it is coming closer to Trick or treat time, too. It might better be known as the Budget! It is entirely up to you to build a budget preparation process that turns a potential "nightmare" into a Treat for 2009.

It is undeniably a tough time in the banking industry...however, it is also a time to capture market share, show your strength and build a point of difference for your institution. Here are 5 Key Budget tips to get you going...

1. Prepare competitive research on your marketplace (budgets and SWOT)
2. Match your budget to the organization's strategy objectives
3. Align your strategies with each business lines objectives and tactics
4. Prepare your budget as a "better" and "best" -- one a visionary stretch
5. Build an ROI for every major component of your budget

A bonus Key Tip is to talk with your CFO and understand the key areas of pressure that he/she predicts for 2009...margin pressure, lending pressure, stock pressure, etc...and build a set of strategies that directly attack those pressure areas!

Your 2009 budget does not have to be a nightmare of cuts, restrictions, and extreme uphill challenges. It's up to you to make it a "Treat" by being prepared, anticipate questions, build strategies to address organizational issues, and be prepared to demonstrate the positive monetary impact and exceptional use of capital that we all know marketing delivers!

Happy Halloween and here's to a TREAT for you in budgeting!

Cheers!

Bruce

Doing more with less

I am guessing that a few of you (or more) have been asked to cut your budgets for 2009. So what are you going to give up? Do you have to give up anything? Can you maybe just take the slack out of the line and do more with less? ABSOLUTELY!

Let's make this blog short today...Here are some areas for you to review before you panic too much!

1. Take a look at your media buys. Do you invest in television spots? Are you getting enough airtime to really get noticed? Do you get premium spots or mid-day on TBS? If you aren't getting the airtime to make a difference, think about cutting here, or applying it to a media that will garner more exposure.

2. Donations. You all make them. But how many times a year do you donate to the United Way? Do your branches have a discretionary budget for market-specific donations? Are they all giving to one organization but at a lesser amount that will generate less publicity? What if you tighten those reigns a little and make one substantial donation (which may be less in total!).

3. Chotchkis. One of the greatest potential threat to your budget. You know those pens, pads, suckers, dog biscuits, mending kits and water bottles you buy to give to people (sometimes for no good reason)? I understand the concept of price breaks, don't get me wrong. But in TOTAL, you may pay less per pen, but have a bazillion more pens than you need and a higher bill to pay. Your staff does not need a scratch pad with the bank logo on it, and the dogs and kids will never miss the suckers (and neither will the owners/parents!). Take a good hard look at your inventory...think about a "just in time" inventory system rather than having things on hand. And you don't have a to have a new t-shirt for every parade your employees walk in!

4. Have everyone brush up on their people skills right now. You will be amazed at how far a smile will take you during tough times!

And remember to be extraordinary today!
Jenna

ALCO is not dog food (and other great survey responses!)

Q: What is an ESOP?
Survey Answer: A Greek who wrote a series of fables.

(Real asnwer: An Employee Stock Ownership Plan)

I am not trying to be either facetious or pretentious here. But these are some actual survey answers given by employees at my former bank when we did some internal testing of bank acronyms and product names to see if we ourselves knew what we were communicating to employees and customers.

The companion survey for customers resulted in an even more dismal response. It became apparent that the chosen few inside the bank had become so comfortable in our banking nomenclature that no one was clear what we were communicating. Even the new, exotic names we had given to some standard products were failing to connect to the customers because they lacked an educational component that was paramount to relating relevance to customer need.

Remember this. The Wall Street Journal is written for an 11th grade education. The New York Times for a 9th grade education. These newspapers never assume that the reader is up on all the acronyms that are used in everyday business and life. Or that the average reader knows what is meant things such as credit default swaps which has garnered much ink during the current financial crisis. They painstakingly educate the reader so that the articles have relevance to the lives of average Americans (who also happen to be your customers).

Others, such as Jim Cramer, host of Mad Money, use analogies to make their point. Last week, Cramer described a credit default swap this way: “It’s like taking out an insurance policy on someone that you are going to kill. And it’s all legal.”

We need to take a lesson from these newspapers and insure that all of our communications—direct mail letters, product literature, etc.—contains a modicum of education so that our customers can make an intelligent decision about the relevance of a particular product or service to a specific need.

This is an interesting time and one where Community Banks can gain incredible ground...if we use communications focused on stability, use words that create understanding and messages that create connections.

Cheers!

Nick Vaglio

Don't Lose Focus

Insurance \in-ˈshu r-ən(t)s\ n: coverage whereby one party undertakes to indemnify or guarantee another against loss by a specified contingency or peril

We are definitely facing specific "contingency and peril" lately. Help guarantee you won’t lose market share.

Adding to an already crazy bank marketing existence, the recent “bail out” plan increased the FDIC and NCUA insurance maximum from $100,000 to $250,000 for deposits. It’s understandable that we need to communicate this important message to our customers, but should it be our main message?

The key to marketing is still differentiation, and when I look around, nearly everyone is either FDIC or NCUA insured.

When you talk stability and security, focus on what differentiates your institution:

• Have you been in the market longer than the competition?
• How does your institution DEMONSTRATE that you’re a pillar of the community? Do you help build local business? Do you donate a newsworthy amount to local charity? Have you helped keep neighbors in their homes? Have you helped finance a life-saving surgery?
• Are you the market share leader? If so, you can make a case that you’re the “most trusted.” If you’re not the market share leader, what do you do better than the leader?
• Find an evangelist – you know, that customer or member who loves everything you do – and create a testimonial. You’ll strengthen your relationship with the customer and have a more compelling story to tell.

Be creative, talk to your front-line staff – they have stories. But in the end, don’t lose focus on what really differentiates your institution.

Take care,
Eric

Short-term Memory....loss? Or gain!!!!

Greetings...

Today is Columbus Day and most of you are hopefully spending time with your kids, doing some early shopping for Christmas, or just enjoying the bank being closed!

I am taking today off...and enjoying every moment of it, too!

However, this past weekend was a little rough. You see my son is a 9th grader and starts on offense and defense for his High School freshman football team. On Thursday night, they had the biggest game of the year...the annual battle with our rival Centerville! He was so excited for the game...he could hardly stand it. And now he hardly remembers it...

On the 1st defensive series, he got hit in the head with a knee...and he saw stars! He didn't tell anyone and stayed in the game. Later in the 1st quarter, he hit helmet to helmet with a running back (great tackle) but rung his bell again! Watching him in the stands, I could tell he looked a little woozy, but I thought the trainers are right there...they will say something is he is too bad!

Well...after the game (we lost 48-30) he walked off the field and I met him at the gate...he walked with a tilt and had glassy eyes! No one ever said anything...and he was obviously not thinking clearly! He played the whole game with a severe concussion!

He is on the track to clearing the cobwebs and is in on "brain rest"....(sounds like what I need!) and will be OK. It just will take some time to get back to his baseline, which we know because the school tested all athletes before the season...just in case of such a situation. He will be fine and is looking forward to baseball season now...he will miss his last 2 football games, but in the long run...that is a very small price to pay to make sure he is OK. He took a biology chapter test today...much to my amazement that he could think clearly enough...and got a 100%! He's going to be fine!

Now the dramatic connection to banking....

We ALL feel a little woozy, walking with a tilt, and seeing a little fuzzy right now with the battering the industry has been taking over the last several weeks....actually last several months! However, now is the time to remember that we will ALL be OK. Its time to stay aggressive...stay in the game, and know that it will all be worth the effort. We need to all go back to our "baseline" results and share them with our staff. We are still strong. We are still capable of getting a 100% on tests...those tests are just different now.

Our tests now come with comforting our customers, informing our staff's, working with the local media, and ensuring stockholders that we are, indeed, a strong industry. Just like Casey stepping up and getting a 100% on his biology test when I did not think he could, you, TOO, can step up and hit a home run for your organization.

Now is the time for marketers to be front stage and leading the bank forward. We need to be visible, communicative, and leading the charge to ensure we EXCEED the customer experience that our customer's expect. Now is the time to step up and excel...when no one thinks we can. Now is the time to make the points of difference in your market. Now is the time to runs ads and educating staff and customers alike. Now is the time to go for it...

You can be a difference maker and the extra focus and effort now will pay double dividends once the economy and market realities turn around...

Now...let's get out there and play hard!!!

Cheers!

Bruce

Why are we loyal?

My office is located about 2 miles closer to the FedEx Store than to the UPS Store. I also don't have to contend with stoplights and traffic when I go to the FedEx store. It's made me faithful to them for no reason other than a couple selfish conveniences.

Recently, I was trying to ship two amazing Eric Wahl paintings that were created live at the ABA Marketing Conference in Denver. The canvases were HUGE!!! I went to the FedEx Store and asked to buy a box. Their box was custom made to fit the dimensions of my artwork (wish I could actually take credit for them!) and a fragile stamp would be put on the exterior of the boxes. It all sounded great...customized boxes...handled with care...just what I wanted! Then the hammer fell. It would be $20 per sheet and each painting would take anywhere from 3-5 sheets. That's $100 a box! YIKES. I asked about alternatives, here's the response I got:

"There's an art and framing store over off of 120th called Aaron's Framing something-or-other. I send my clients there because you can get boxes for a lot cheaper than you can get them here. I will hold on to your shipping labels for you so that when you bring them back in the boxes from Aaron's, you won't have to fill everything out again."

Imagine my excitement! That was exceptional customer service. Until I showed up at Aaron's Framing place and was told by the store manager that not only do they not have boxes, they don't even keep the boxes frames were shipped to them in. Oh, and they also send all of their clients to the UPS store. UGH!

So, I went to the UPS store holding out little hope of finding a box. And then it happened. The nice woman said that not only do they have the box for me, but they have boxes specifically made for artwork and they will wrap the paintings in plastic (in case it rains where they are delivered) and make sure they arrive in one piece.

It was amazing. And the icing on the cake came when the clerk (Mary) said, "here, take my card, next time you have a shipping challenge like this, just give me a buzz and I can help you out before you drive all over town looking for shipping materials."

From now on, I will drive 2 extra miles through stoplights and traffic to get assistance from Mary. Mary is my shipping expert.

I don't need to spell out how this relates. But to keep you thinking in this marketplace, how many of the big-banks are in your marketplace? Do you think their customer service reps are happy? Do you think they hand out business cards and tell customer to call them next time they have a problem? NO WAY! They can't even guarantee their doors will be opened tomorrow.

This is your opportunity to capitalize on a tremendous opportunity. A guarantee to your customers that you are the expert and you will be there next time they need help. And all you need is a business card and a smile. It doesn't get any better than that!

Be extraordinary today!
Jenna

Assumptions... the greatest form of evil??

Okay, there are instances where things are rather obvious. If you see someone in your office walking down the hall with a newspaper tucked under their arm you have a fairly good idea where they just came from. And you probably want to avoid shaking their hand. But not all assumptions are as obvious.

There are these two young fish swimming along, and they happen to meet an older fish swimming the other way, who nods at them and says, “Morning, boys, how’s the water?” And the two young fish swim on for a bit, and then eventually one of them looks over at the other and goes, “What the hell is water?”

(If at this moment, you’re worried that I plan to present myself here as the wise old fish, please don’t be. I am not the wise old fish...just a guy with good eyesight and marketing vision!)

The immediate point of the fish story is that the most obvious, ubiquitous, important realities are often the ones that are overlooked in everyday life and business.

Sometimes, as employees that serve the public, we fail to remember that we are exactly like our customers before we come through the office door. You have high demands and expectations, too! The coffee we pick up on the way to the office had better be perfect. The dry cleaning must be perfectly pressed. And your financial planner had better be devising a long-term plan that is in your best interest.

And then, in the case of some bankers, something happens when we take our positions behind the teller desk or on the other end of the phone. Too often, we make assumptions about what is on our customers’ minds and what it is that might provide the most relevant solution to their most pressing problems. Too often, the conversation at the point of sale is dominated by what is in the best interest of the bank.

Sometimes the solution is simply to put yourself in the customers’ shoes, ask the right questions and exceed those same expectations that you demanded before you walked through the office door. By asking, “how’s the water?”, you might be surprised by the amount of information that your customer or prospect is willing to tell you.

For me, its about alinging marketing with sales, our actions with our customers and our banks with our marketplace...

I am pleased to be joining MarketMatch and you can look forward to many more thoughts and anecdotes through our Blog in the coming weeks and months.

Cheers!

Nick Vaglio

Carpe Diem

Carpe diem. Seize the day.

Today is an historic day. Not just in American history but in the world of banking. With all of the buyouts, mergers, acquisitions and failures making the news today, your customers are scared. They are scared because they don't understand.

Again, carpe diem! You have the opportunity to help your customers not only understand that you aren't going anywhere but that you can help them get ahead of the curve.

Many of you are reading this blog from small-town America. A place where when your neighbors say they are going to "the bank," everyone knows they mean you. Sure you have competition, but you also have loyal customers. Customers who don't say it out loud, but are secretly worried that their bank will be gobbled up "just like the rest of them have." What they aren't understanding is that you are here to stay. You didn't dabble with sub-prime lending. You haven't over extended credit. You are safe and sound.

Now is your chance to put your customers' minds at ease. Don't do it in a letter or a statement stuffer. Talk to them. Write an article for your local newspaper. Do something charitable that will say to everyone "We are here to stay. You are our family and we love you and we aren't going anywhere."

You have a tremendous opportunity in front of you. Not only for maximizing existing relationships but for capturing new customers. Those customers of the bank down the road who haven't been told that the doors will still be opened tomorrow and they will not be selling out in the foreseeable future.

When you communicate your safety and soundness, your community will listen...and respond.

Carpe diem,

Jenna