Banking's New Version of Russian Roulette

Considering the current economic crisis, it is doubly troubling when you come across an article such as the one that appeared recently in the Business section of the New York Times.  The article was titled, Drawing a Bead on Debtors, and it focused on how some banks and credit card companies are mining databases to pitch new loans to troubled borrowers.

The articles profiled the travails of Brenda Jerez, who in 2005 became ill with cancer and ran up $50,000 on her credit cards after she was forced to leave her accounting job.  She filed for bankruptcy protection last year.

For months after she emerged from insolvency last fall, 6 to 10 new credit card and auto loan offers arrived every week that specifically mentioned her bankruptcy and, despite her poor credit history, dangled a range of seemingly too-good-to-be-true financing options.

Russian Roulette, as you well know, is like the art of suicide with a little Las Vegas odds thrown in.  You load a bullet into one of the six chambers, spin the cylinder, hold the gun to your temple, pull the trigger and hope for the best.  Only, in this banking version, all the cylinders have bullets.  

The business practices outlined in the New York Times article is akin to giving a recovering drug addict a sample of cocaine or a recovering alcoholic a six-pack of beer.  It's all about the next product sale--regardless of whether it has the underpinnings of the next tsunami in the economic crisis. 

Singling out even struggling American consumers like Ms. Jerez is one of the overlooked causes of the debt boom and the resulting crisis, which threatens to choke the global economy.

Today, companies comb through an array of sources, including bank and court records, to create detailed profiles of the financial lives of more than 100 million Americans.  They then sell that information as marketing leads to banks, credit card issuers and mortgage brokers, who fiercely compete to find untapped customers--even those who would normally have trouble qualifying for the credit they were being pitched.

Sound like the next financial minefield?  Except in this case we are planting the minefield and throwing away the map.

I used to feel very proud to say I was part of the financial industry--first as a banker and now as a consultant.  But today it is hard to put the words bank and trust in the same sentence without it sounding like an oxymoron.  Unfortunately, for the majority of banks that operate with the utmost integrity, morality, and social consciousness, we all suffer from a little guilt by association.

That's why today, more than ever, the number one job for all banks is to reestablish that one-to-one trust with our customers, so they will then view us again as true partners that are looking out for their well being.  

Trust me on this one.

Cheers,

Nick Vaglio 

Arena Stage's NEW DEAL

As the anemic economy lingers, I have gotten more and more questions, from press, board members and colleagues, about what I believe the impact will be of the worsening economic crisis. As I wrote in an earlier post, the honest answer is -- I don't know. Truth be told, the first several shows of Arena's season have performed on par with previous seasons, and Wishful Drinking was one of our best performing productions in the past decade.

That being said, I am not so optimistic about the future. Money is getting tight, and some of the most talented forecasters in the retail industry are calling for an incredibly rough holiday season.

As a preemptive strike, Arena Stage announced its New Deal program today. At its core is a huge one day only sale. For one day, Friday, November 14 from 12:00am until 11:59pm, Arena Stage will place 25,000 tickets on sale for $25 each, which represents 60% off regular ticket prices. I believe we owe it to our community to make ticket prices more reasonable during these times, and this is the program we have developed.

I also believe that we have to give customers a reason to buy, and buy now. To a lot of people, a great product is no longer enough -- they need a deal that they feel they can't pass up in order to purchase. In turn, I need them to purchase their tickets now far in advance for shows months away. I refer to this as my security blanket in case the economy gets worse--almost like a subscription in a way.

Round 1 begins...

What are you doing...

to prepare your organization for the economic downturn? More from my experience and Arena Stage later this week, but check out the following headlines:

St. Louis Arts Museum delays $125 million expansion:
http://www.stltoday.com/stltoday/entertainment/stories.nsf/entertainment/visualarts/story/4efc5e0a4a78af6a862574f90069fed1?OpenDocument

Oregon Shakespeare Festival runs into Money Crunch:http://www.statesmanjournal.com/apps/pbcs.dll/article?AID=/20081102/COLUMN0801/811020304/1083/COLUMN

NY City Ballet Cuts Season: http://www.saratogian.com/site/news.cfm?newsid=20186738&BRD=1169&PAG=461&dept_id=602469&rfi=6

A Rough Road Ahead for Broadway:
http://www.nytimes.com/2008/11/05/theater/05bway.html?_r=1&ref=arts&oref=slogin

Opera Pacific Closes Down:
http://www.ocregister.com/articles/opera-company-jones-2217667-pacific-county

Milwaukee Shakespeare Dies:
http://www.jsonline.com/entertainment/arts/33613864.html

CTG announces Entertainment Stimulus Package:
http://www.theatermania.com/content/news.cfm/story/15957

Arts Groups Dig in to Weather Economy:
http://www.courier-journal.com/article/20081102/SCENE05/811020317/1011/SCENE

Museums Hit Hard by Economy:
http://online.wsj.com/article/SB122533230729582915.html?mod=googlenews_wsj

DC Fundraisers Show Signs of Trouble:
http://voices.washingtonpost.com/reliable-source/2008/10/rs-harman29.html

The Five Myths of Training

What will separate the banking winners from the losers over the next 10 years? A leading management consultant says there are three factors: number one, training; number two, training; and number three, training.

You would think that all organizations and managers recognize the importance of training. But, they don’t. Why? I’ve found that managers and organizations fall prey to the five management myths.

Myth 1
“Our people are experienced. They don’t need to be trained.”

This myth begins with the organization or manager who says, “Our people don’t need to be trained. They are all old ‘pros’ who have years of experience.” But there is a tremendous difference between experience and competence.

Think about it. Imagine a professional football coach saying, “Our people are all experienced, so we’re going to skip training camp this year. We don’t need it.” How do you think that team would stand up against the competition? How long do you think the coach would keep his job?

Ask yourself this question. Do you think that business is the same today as it was 20 years ago? Of course not. Business is changing. Management is changing. Successful organizations don’t do business the same today as they did five years ago, or 10 years ago, let alone 20 years ago.

Myth 2
"We tried it and it didn’t work.”

I’ve heard executives say, “When Harley Hotshot came to town, we put half of our people through his training and they haven’t sold any more than the rest of the team.” There are two very important things to remember about training. Number one: training is not an event, it is a process. And number two: in order to be effective, training must be ongoing.

Training is a little like calisthenics. If you haven’t worked out for years, and you jump right into a heavy exercise program, you’re going to be uncomfortable. So whether you’re talking about training or calisthenics, if you do it occasionally you grow sore; if you do it regularly you grow strong

Myth 3
“Our organization (or department, or division) is too small.”

It’s important to understand that training is equally important for organizations of all sizes. Consider this. If an organization has one hundred people, and if one person is not operating at maximum capacity, that’s one percent of the entire organization. On the other hand, if an organization has just two people, it may be easy to rationalize “We can’t justify training” … but, if one of those two people is not operating at maximum effectiveness, that’s 50 percent of the entire organization. So, training is equally important to organizations of all sizes.

Myth 4
“We can’t afford it.”

This is a cop-out. If you think the cost of training is expensive, compare it with the cost of incompetence! In today’s service-oriented environment poorly trained staff will drive your customer’s right into the camp of your competition.

Myth 5
“We don’t have time.

This is an absolute exercise in self-deception. If you are like most executives, I’m sure you sometimes ask yourself, “Why is it we never have time to do it right, but always make time to do it over?”

The manager who says, “We’re so busy we don’t have time for training” makes about as much sense as the woodcutter who says, “I’m so busy cutting down trees, I don’t have time to sharpen my ax.”

Abraham Lincoln once said, “If I have three hours to cut down a tree, I’d spend the first two hours sharpening my ax.”

Now, let’s address a final point. How long should you continue training your staff? The answer is how long do you want your people to keep improving?”

Cheers!

Nick Vaglio

Brilliant marketing

I know that I just posted a few minutes ago, but you MUST watch this. Starbucks marketing at its finest! Here's the link: YouTube Starbucks Video

The Real Financial Crisis

Some people have a knack for making profound statements with little effort. Nick Vaglio, the newest member of the MarketMatch team is one of those people. While stating the obvious, Nick said that the real financial crisis isn't the credit crunch or the housing bubble, it's the lost trust in their financial institutions.

He makes a good point. Think about it. Consumers are increasingly skeptical of the financial services industry and it is up to us to help ease their mind. Business Development Officers will need to reconsider their methods and become more like relationship managers than hunters and gatherers.

I know many of you have been communicating your safety and soundness to your communities, and that's GREAT! But we need to do more. When small businesses need help with their cash management they are going to their CPA's for guidance. Are those CPA's sending the referral to you or your competition? Building those networks will take a little time and finesse but will reap great rewards.

Just remember that we do not have the same fear our customers do because we understand. Plumbers don't worry about leaks and mechanics laugh at a bad starter. Remember that your customers are not bankers. Nurture the relationships and the rewards will be yours for the taking!

Remember to be extraordinary!!
Jenna

A Launch Strategy That Works

If you're about to launch a new product, book, website, or whatever and don't know where to begin – then you MUST read this...

After launching multiple products over my career, there's a proven formula that works every time no matter what the actual "thing" is you’re launching. In a nutshell, it’s coordination and synchronization of multi-channel marketing efforts.

These efforts include:
--Staggered emails. These will go to you list and other synergistic lists and aim to build anticipation and a "hot list" of names before your launch. These names will then have potential to be your top buyers.

--Social media. Putting posts on blogs, bulleting boards, forums. Recording a video of yourself and posting it on YouTube. Ultimately, creating messages that have the potential to go viral.

--Pay per click. Bidding on your relevant keywords and having a mechanism and offer to collect names and build your hot list.

--Online PR. Getting your message out quickly and cost effectively. The release will get picked up by blogs, media websites, industry websites, and online news aggregators (such as Yahoo and Google) and not only increase awareness, but also give you backlinks (SEO!) as well as have the potential to go viral.

--Editorial and Article Syndication. Write articles for print and online media about the topic that ties into your launch.

All of these efforts build up slowly and culminate the day of your launch. You’re basically building momentum, that will pay off with traffic and buzz about your product.

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Editor's Note:
I've been getting many emails from readers asking me about social media and how they can measure their activity. Having an Internet marketing, direct response and PR background, I find the following helpful when assessing my efforts:

Look at the "3 O's"—Outputs, Outcomes and Objectives.

Outputs measures effectiveness and efficiency, such as new subscriber sign-ups and spikes in Web site traffic during your campaign. And it measures analytics, such as referring Web site sources, visits, unique visits and visit percentages.

Outcomes measures behavioral changes such as internal customer/subscriber feedback (calls, e-mails, forum postings) on your Web site, as well as external reputation monitoring or visiting targeted chat rooms during your campaign looking to see the "buzz."

Objectives compare direct product sales during the time of the campaign to other sales that occurred before the campaign. So it establishes a baseline, giving room for sales assumptions tied to your effort.

I also use the following tools:

Google Analytics
-Check the “referring sources page” to see how much traffic was generated by LinkedIn.
-Look at overall traffic to website during same time period of your effort.
-If you have a sign up/email form, look for lead spikes during time period of your effort.

Google Alerts
-Set alert for your name, your company name, and keywords in your content. You’ll get notified via Alert if content/your messagegets picked up and goes viral.

Backlink Checkers
-Google Webmaster Tools - Check back links going to site during same time period of your effort.
-Link Popularity Check - Link popularity analysis is one of the best ways to quantifiably and independently measure your website's online awareness.

Sample free tools:
http://seopro.com.au/free-seo-tools/link-checker/ http://www.iwebtool.com/backlink_checker
http://www.backlinkwatch.com/index.php