The Chips are Down --- Time to Cash Out or Go All In?

Greetings:

Okay, here is a challenge for you experienced marketers. I think you might be able to relate to this one.

I have a company that specializes in a niche industry. This target industry in turn is facing some of the most difficult challenges it has seen in decades. Competition is fierce, failures are everywhere, regulators and the news media are shining a spotlight on everyone and meanwhile, my clients are struggling with the day to day challenges of operating in a highly unfavorable environment.

So, with my target market at risk, what do I as a leader need to do to ensure my own company’s survival?

Well, I have a few options, I guess:

1. Hunker down and try to just hang on until it blows over
2. Get out while I can and expand into a different customer base that is not my specialty
3. Go all in and commit to do everything possible to help my clients succeed and save myself at the same time.
   

Option 3 -- that’s where I am.

After twenty years in the bank marketing business, I stand firmly with you in this mess and believe we can pull through it together and come out stronger.

So, instead of hunkering down, MarketMatch has made a move to strengthen its offerings and bring our clients the resources to succeed in these trying times. We took advantage of the disruption in the marketplace and invested in growing our business and positioning ourselves for the future by acquiring a regional competitor. The acquisition brings MarketMatch new products and adds key executives to our team with significant experience. For more details, read the announcement. (link to release)

Now, here is the parallel for your business. Your markets are disrupted. You and your competitors are struggling to operate in an unfavorable environment. Who will come through the challenges better off – those that hunker down and wait for things to blow over? Or, will those who take proactive action to better position themselves and their clients for the future come out ahead in the end? Obviously, I advocate the proactive approach.

I challenge you to ask “Are we doing everything we can to take advantage of the disruption in our market? “

Clients are concerned and many are moving or considering moving their money. The trust in bank/customer relationships is being eroded every day by the news media’s sensationalist headlines. Are you taking proactive steps to a) secure your current relationships and b) capitalize on your competitors’ weaknesses?

Comment and tell me what you are doing to proactively move your organization forward in this marketplace. Or, let me know if you need help identifying actions you can take to better position your bank for success.

Cheers,

Bruce Clapp

Brand YOU Day

As marketers, we all understand the importance of branding, but how do you craft YOUR brand as your bank or credit union’s marketing department?

A solid internal brand can transform marketing from the “arts and crafts” department to the strategic thought leaders … from the “ad guys” to an indispensible planning resource … from an expense to a valuable INVESTMENT.

As with any brand, your department’s brand needs to be differentiating, relevant and speak to a need.

Be Differentiating: The Marketing Department should be the ONLY one-stop resource for all information within your market.  Among other things, you should be the expert on:

• How your current customers perceive and use the bank
  
• How potential customers perceive your bank and use their bank
  
• What a potential customer looks like and where they live
  
• What the competition is doing (or not doing)
  
• What the financial trends are in the market
  

Each planning session, it should be your department that leads the conversation with the management team and the Board on market conditions and a basic SWAT analysis to establish a mind-set and get everyone on the same page.

Be Relevant: Banks are more in the forefront of American’s minds that they’ve been in generations.  And people are crafting their opinion of you and your peers by what they see on CNN and the local news.

The bottom line is that YOU are the sculptor and guardian of your institution’s image.  No one else in the bank, not even the CEO, is as concerned about the perception of your bank as you are.  From the front-line interaction to the sales collateral to the external communication - you are responsible for the customer experience at every touch point.  What could be more relevant?

Speak to a Need: Remember who your internal target audience is … the CEO, CFO and Board.  Of these, most have a finance background and focus.  So, speaking about creative awards will not necessarily address what is important to them.

You need to speak in your target’s language … cold hard numbers!  A solid understanding and sharing of your marketing ROI will go a long way to adding value to your department’s brand.  Consider this … if your CEO has only $1 to invest in the institution, where will they get the best return?  An investment at today’s rates?  More technology, branches or personnel?  Or a sound marketing program that can generate 120% plus ROI?

We just need to take our own medicine and put the same emphasis on our internal brand as we put on our bank’s brand.  Imagine what it could do for your involvement in key decisions, job security and your overall marketing budget.  

As always, please share your thoughts as a comment below.  Or if you think I'm full of it ... please share that too!!!

Take care,

Eric

Tweet Tweet

Huh? Right. Vocabulary words.

I volunteer for Junior Achievement. This morning I taught second graders the principles of paying taxes, why we have to do it and where the money goes. They learned the words "government," "services" and "taxes."

Then one of the students raised his hand so politely and asked if they could teach me new vocabulary words. "Absolutely," I answered!

My first word was "Tweet." And being the social media nerd I am my mind went to Twitter immediately. But these are second graders after all...so my answer, "Tweet is what a bird says." The class erupted with laughter. I was promptly corrected that "Tweet is what you do when you change your Twitter."

Second graders. I can't make this stuff up!!

So, what's the lesson is all of this? If second graders know what Twitter, MySpace and Facebook are, you should too. I am hoping they are not using these outlets yet, but if they are, you are already behind the 8-ball!

How do you get started? What is right for your institution? How does it work? Is it safe? All legitimate questions. And important questions too!

The Brown Bag Lunch series will address all of these questions on February 20. But in the meantime, if you need a little help, give me a buzz or drop me a note! I would love to help you sort everything out!!

Here's to being extraordinary!
Jenna

How A Marketer's Life Imitates The High Hurdles

If there's one thing I've learned as an elite high hurdler in USA Track & Field's Masters Division, it's that the fastest or most agile opponent doesn't necessarily win the race.  To be truly successful the hurdler must master the five fundamental skills: speed, agility, flexibility, focus and endurance.  And in a race that is sometimes decided in hundreths of a second, failure in one of the five elements will leave you off the medal stand.

As a marketer, I always try to look at both myself and the company through these five filters in everything I do.  Because a subpar performance in any of these five areas can quickly derail even the best laid plans.

Speed:

In today's world, information flows at the speed of light.  Technology has changed our world forever.  Does the corporate culture and management structure at you institution allow for fast innovation as market or competitive situations arise?  Or is it the corporate equivalent of turning an oil tanker?  It used to be that the big ate the small.  Now the fast eat the slow.  As a marketer, it is incumbent upon you to look for ways to streamline processes that will allow for your institution to quickly react to market conditions whether it be to communicate with customers, introduce new products or to promote your standing in the marketplace.  Transform your institution from being innovative to one whose being is innovative!

Agility:

Changes in the financial marketplace are a daily occurrence--whether its interest rates, TARP news, deteriorating trust in banks, etc.  How agile are you and your institution to these changes?  As a marketer, do you wait for direction from your ALCO committee or are you part of the process?  Are you ready to go to market quickly when faced with a declining or rising interest rate environment?  Are you proactive or reactive?  Are you ready to deal with these hurdles before they happen?  If you assume and prepare for the worst-case scenarios you will be ahead of the curve--and the competition.  And as the old saying goes: "unless you're the lead dog on the dogsled team then the scenery never changes."

Flexibility:

For financial institutions, new deposit generation is king in terms of liquidity and funding loans.  And like in today's real estate market, deposits are a buyer's market.  Now, more than ever, you need to retain and grow your best customer relationships to ensure future profitability and institutional viability.  Do you have the flexibility to offer your best customers better value for their business loyalty in the form of discounted or relationship pricing based on their account balances and number of products?  Do you coddle and nurture your best customers to make them feel special?  Do your marketing plans have the flexibility to adapt to rapid market changes?  Are you creating those barriers to exit for customers so they won't abandon you for 25 bp?  Not being flexible in today's business climate is the equivalent to showing the customer the exit door.

Focus:

Keep your eyes on the prize!  With all the chaos in the financial marketplace, focus on the two most important elements to success: giving your customers a compelling reason to stay and your prospects a compelling reason why your institution is their best choice.  And that involves three critical factors: innovative products and services, outstanding customer service and instilling a high level of trust as a financial advisor in customers and prospects.  In short, treat people as you expect to be treated--with respect and trust, and reward them for their loyalty!

Endurance:

Today's financial battlefield will be a protracted event that requires the utmost endurance in order to survive and prosper.  There are no magic wands, silver bullets or quick fixes.  Even if you mastered the other four disciplines, the lack of endurance will cause you to stumble over the final hurdle.  Long-range strategic plans and yearly marketing plans will need to endure through all kinds of financial events--both known and unknown.  Nothing can be set in stone. As you eye the finish line, never lose sight of what lies between the starting blocks and your ultimate goal.  And with that, I'll leave you with this quote from the Chinese Taoist Philosopher, Lao Tzu, "If you do not change direction, you may end up where you are heading."

Cheers,

Nick Vaglio, CFMP

Want a bailout of the arts? Don't make the ask in an Armani suit

When the big three automotive CEOs flew separate private jets to Washington, DC to plead for public funds, I remember thinking to myself that I was thankful that I was a publicist and marketing director for a non-profit arts organization. The type of arrogance it takes to fly corporate jets to ask for billions of dollars in public aid surely could only be found in the private sector.

However, recently there has been a dust up about executive compensation in the non-profit arts sector, particularly because as the economy tightens, more and more arts organizations are pleading their case with stakeholders, some going as far as Mr. Kaiser in asking for a government bailout of the arts. Although I have tremendous respect for Mr. Kaiser, I am convinced that perhaps he isn't the best emissary for the non-profit arts--how does it look for a non-profit arts administrator who makes more than $1 million a year in salary to be the champion of the suffering arts scene?

Two separate stories have broken in the last month questioning the salaries of non-profit arts administrators. The most recent reported that Joe Dowling, Director of the Guthrie Theater in Minneapolis, made $682,229 last year, which represents 2.6% of the organization's $27 million budget. When compared with similar sized and larger organizations, Mr. Dowling's compensation seems high. Todd Haimes, who leads New York City's Roundabout Theatre which is twice the size of the Guthrie, makes $487,439 per year (and the dollar doesn't stretch in New York like it does in Minnesota). Similarly, Andre Bishop, the Artistic Director of Lincoln Center Theater which is 25 percent larger than the Guthrie, makes $428,183. So why is Mr. Dowling's compensation not in scale with his peers, or even peers at larger organizations? The second recent story takes a look at proposed legislation in San Francisco which is trying to limit non-profit executive compensation to a maximum of six times the salary of the lowest paid employee.

Executive compensation isn't a new concern. In the past couple of years, we have had several large controversies over this issue, including the infamous Lawrence Small, previous Secretary of the Smithsonian, and Josiah Spalding, Jr., CEO of the Citi Performing Arts Center. Mr. Small left the Smithsonian under a lot of pressure and controversy surrounding his lavish spending habits, which included a $15,000 receipt for the replacement of French doors at his home and spent $48,000 for two chairs, a conference table and upholstery for his office suite. In Mr. Spalding's case, he was awarded a $1.265 million bonus in 2006 even though he presided over five straight years of budget deficits, cuts to programming, and a dramatic drop in performances at the Wang and Shubert theaters, which the Citi Center operates.

Over the past year, I have read numerous articles about the woeful state of symphony orchestras, which are trying to remain competitive with downloads of classical music and are struggling to develop sustainable business models. Just in the past couple of months, the Santa Clairta Symphony, Pasadena Symphony, Kansas City Symphony, Las Vegas Philharmonic, the Virginia Symphony, the Detroit Symphony, and the Cleveland Orchestra have reported major financial problems. But when you look at the top 10 salaries for Music Directors in the United States, one would conclude that symphonies are flush with cash. The conductor of the cash strapped Cleveland Orchestra is seventh on the list of the top 10 and makes $1.2 million a year. The lowest on the top 10 list is Osmo Vanska of the Minnesota Orchestra who makes $713,518 and the highest on the top 10 list is Lorin Maazel of the New York Philharmonic who makes $2.189 million.

On the flip side of the argument, there are CEOs in the private sector who are so linked to the success of their company that even rumors of their illness cause stock devaluation. Over the past several months, it has been rumored that Steve Jobs, the CEO of Apple, has a terminal illness, and these reports have caused Apple's stock to fall. The tie between Steve Jobs and the success of Apple is so strong that it lead to Mr. Jobs holding a press conference where he released an update on his health, stating that "reports of his death are greatly exaggerated." After this announcement, share prices for Apple jumped four percent. When the success of the organization is tied so directly to the CEO, it might be entirely appropriate to compensate them at such a high level.

Either way, this argument over executive compensation reminds me of something a professor said to me when in graduate school--"when making an ask for money or pitching a sponsorship, never arrive at a meeting with the prospect dressed in an Armani suit or a Walmart suit--either way you are screwed." I have to think that in some cases the arts are arriving at these meetings in an Armani suit.

Working with the Artistic Staff to create exciting Marketing Opportunities

In the past couple months, Arena Stage has planned and executed several exciting marketing opportunities as a result of the great working relationship between the artistic development staff and the communications staff. This relationship has existed for as long as I have been with Arena Stage, and most likely well before that. However, too many times the artistic department and communications department view each other as adversaries in other companies, and sometimes are in direct conflict with each other. For example, it might serve the communications staff better if a reporter sits in on rehearsal, but the artistic staff might be concerned about the reporter interrupting the rehearsal process. The current economic crisis has opened new opportunities for dialogue between artistic and marketing personnel because it is becoming more and more obvious that companies which successfully navigate this crisis will be those that pull together and find new inventive ways of doing business.

The Finding Yolanda Casting Search was the most recent collaboration between the artistic development and communications departments at Arena Stage. We are producing our fourth production of Crowns this spring. Most regional theaters in the United States have a production or two that they bring back on a yearly basis, most commonly A Christmas Carol. However, after several years, it can become difficult to procure media coverage for these types of productions. With this in mind, we were looking for a new angle to garner attention from the local press. At the same time, our casting department was feverishly looking for a young, talented African-American woman to fill the role of Yolanda. Our casting director, Daniel Pruksarnukul, came up with an idea that accomplished both goals--an American Idol like contest to find Yolanda. The communications staff and artistic development staff pulled together to create an all day open call. It was sponsored by ABC7 and News Channel 8, each of which aired free 15 second promos for several weeks leading up to the auditions. The Finding Yolanda Casting Search also received coverage in the Washington Post, ABC7, News Channel 8, Back Stage Magazine, WTOP, WAMU (local NPR), DCTheatreScene.com, TheaterMania.com and BroadwayWorld.com. We invited our audiences to come and watch the open call as well, giving our audiences an inside look at what happens at auditions. The winner was announced on the ABC7 evening news.

This was a win-win for both departments. Casting found an extremely talented young lady to fill the role, and communications had an angle to pitch to the press.

Check out video of the winner. Congratulations Zurin Villanueva! Looking forward to working with you.

Reflecting on Reflections

I had a personal epiphany over the weekend and then turned it into a professional one.

There's no greater reflection of ourselves than observing the actions of those we lead.

It all started when I wished my 5-year-old son would stop yelling first and asking questions later. 

Then I realized that he was a “mini-me.”  A 3-foot tall version of my impatient, hotheaded self.  He wasn’t born with a short fuse, he learned it through watching me.

The same is true for our institutions.  As managers or those responsible for the service delivery of our banks or credit unions, if you are unsatisfied with the actions of your staff – first look at the culture that created the behaviors.

Walt Disney understood this:

“People look at you and me to see what they are supposed to be.  And, if we don't disappoint them, maybe, just maybe, they won't disappoint us."

- Walt Disney

I don’t believe that Orlando, Florida is the hotbed of outstanding, service-oriented people.  If that were true, your experiences outside of Disney would be the same as those inside the park.  What Disney has, however, is a clear definition of service excellence and a consistent and unwavering expectation from the CEO to the janitor that this definition is to be lived everyday – with absolutely no exceptions.

Rather than punish my son for his actions, I will make a conscience effort to not disappoint him in MY actions ... then maybe, just maybe, I won't be disappointed in his.

How will you and your management team effect the service culture of your institution?

Take Care,                                                                                                                  

Eric

OTHER MEANINGFUL WALT DISNEY QUOTES:

“You can design and create, and build the most wonderful place in the world. But it takes people to make the dream a reality.”

“Of all the things I've done, the most vital is coordinating those who work with me and aiming their efforts at a certain goal.”