The topic of innovation seems to be heating up in banking circles recently. Normally, I would be excited about this. Instead, I have mixed feelings.
My biggest concern is that the enthusiasm over innovation is simply a reaction to recent regulatory actions that have constricted profitable revenue streams. If so, the “innovations” will be nothing more than workarounds designed to return profitability to these same streams.
My fondest hope is that there are real innovations on the horizon. New ways of connecting customers and banks. Technology and processes to make banking more convenient and useful for the customer. And creating competition around customer benefits that customers really want.
The true future of banking lies not in optimizing customers, but in optimizing customers’ lives.
“A hero is someone who has given his or her life to something bigger than oneself.” — Joseph Campbell
I mentioned the hero’s journey in my last post, without any explanation or context. I’ll remedy that here.
The context is mythology. Specifically, brand mythology.
Bank marketers typically keep their distance from this end of the branding spectrum, because mythology seems too ethereal. It’s anything but. Many of the most successful brands in the world are built on carefully cultivated mythologies. Harley Davidson (outsider), Apple (creator), and Campbell’s Soup (mother) come to mind.
Joseph Campbell, quoted above and no relation to Campbell’s Soup, was a scholar who spent his life identifying common structures in mythologies from around the world. Primary among these structures is the monomyth, also known as the hero’s journey.
Here’s the basic monomyth structure:
Ordinary World – Business as usual
Call to Adventure – Something upsets business as usual
Refusal of the Call – Hero is reluctant to leave what he knows
Deciding Factor – Someone or something cause him to reconsider
Crossing the Threshold – The hero begins his journey/adventure
The Road of Trials – The hero perseveres through a series of challenges
The Supreme Ordeal – The hero meets the ultimate challenge, overcomes it, and captures the object of his quest
The Escape - The hero endures more trials before re-entering the world of business-as-usual
Return with Elixir – He returns with what he has learned or won for the benefit of his fellows
If this sounds familiar, it should. The monomyth is the basis for a significant percentage of Hollywood movies—Star Wars, The Wizard of Oz, The Lion King, The Matrix, Gladiator, Groundhog Day, Casablanca, Titanic, Ben Hur, and When Harry Met Sally, to name a few. A current example is Crazy Heart, the Jeff Bridges vehicle.
Ordinary World – Domino’s as it has been for, let’s say, the past decade
Call to Adventure – Complaints about product quality in focus groups
Refusal of the Call – Domino’s continues to focus on reliable delivery and affordability
Deciding Factor – YouTube video depicting employees doing disgusting things to Domino’s food puts the company’s reputation at risk
Crossing the Threshold – Domino’s decides to redirect consumer attention from cleanliness to taste
The Road of Trials – Company engages in trial and error process to improve the taste of Domino’s pizza until the new, improved pizza is finalized
The Supreme Ordeal – Domino’s needs to let the past go, and face the public with new pizza—it does so with a risky, new advertising campaign admitting to quality problems and showing the company dealing with this reality
The Escape - The company endures criticism from pundits for abandoning existing fans.
Return with Elixir – Formerly critical consumers loves the new pizza
Any bank could employ the monomyth structure that Domino’s used so adroitly. Which is not to say that a bank would need to expose its shortcomings. A bank could tell the story of fulfilling a mission, overcoming a challenge, or self-transformation. The main point is to dramatize a change process—a heroic journey—that benefits the customer.
In recent years, the definition of a brand as a promise has dominated all others. I can understand why. It’s easy to understand, it sounds manageable, and it terminates any further need for exploration.
In other words, it’s convenient. Which is a long way from saying it works.
Bank of America, for example, can make all the promises they like, but few people are going to believe them. You might say it’s because they’re not delivering on their promises. Fair enough. But is that all there is to it?
I believe it’s because their brand carries meaning that overrides their promises.
One obvious current meaning is that, to much of the general public, the BofA brand represents unbridled greed. The myth goes something like this: “They caused the recession. Regardless, we bailed them out. Then they put the money in their own pockets instead of using it to help the economy.”
It doesn’t matter if the myth is true or not. It constricts the power of any promise BofA can make. This is a big, big problem, and it’s going to require a lot more than “reputation management.” It’s going to require the creation of a whole new brand meaning—a whole new mythology.
Not quite as convenient as making promises, is it?
To demonstrate the kind of work that needs to be done, let’s look outside the banking industry at the new Domino’s Pizza campaign. Over the years, the Domino’s brand had come to represent poor quality, and—by extension—doing the bare minimum, and simply not caring. Here’s what Domino’s did about it:
The campaign shows that Domino’s is not only willing to face reality, but to be transparent about it. Not only willing to rise to the challenge, but to be excited about it. Finally—and this is the genius part—to be openly proud of what they’ve accomplished.
Talk about a change in meaning—this is a near-perfect execution of the hero’s myth:
This new meaning is what makes the product improvements—the promise—credible. Without meaning, the promise would just be another “new and improved’ claim. With it, the promise has real power.
And the moral of the story? Don’t let convenience limit your brand. Meaning is where the action is.
I’ll have more to say on brand meaning in a future post.
One of the effects of social media has been the grassroots movement-on-steroids phenomenon. For example, it’s been less than a month since the birth of Arianna Huffington’sMove Your Money initiative, and it’s already building big momentum. Here are a few quotes from followers:
“I applaud the efforts of the people of this nation. This effort is a ‘human’ one…not a left, right, religious or non-religious. Real Change starts when the American people rise up and say…Enough is Enough. Move Your Money from these GREEDY banks Today!”
“I can’t remember the last time something has come along that truly and equally succeeds in motivating people to drop their red and blue team colors…in favor of pitchforks, torches and a hill.”
“I am so encouraged by this idea! I finally feel like we can do something that will impact our nation for good.”
“I very much appreciate this encouragement to say, “no!” to a wrong-headed worldview that bails out rich bankers and sends the bill to citizens. You can count on my money being moved to our local First Commercial Bank! Peace, and keep up the good work!”
“This is a fabulous idea, and the video is wonderfully compelling. I will share the link and move my money.”
Move your Money has given an angry America more than a voice. It’s providing the public with a weapon that could do considerable damage.
This, of course, is not great news for the big banks, but I doubt they consider it a game-changer. They are, after all, too big to fail.
For credit unions and community banks, however, it’s an unbelievable growth opportunity.
If ever there was a time to pull out all the stops, marketing-wise, this is it.
Jump into social media with both feet. Take advantage of PR opportunities. And, if you’ve got rates or some other advantage worth talking about, advertise.
If you’ve been in marketing for awhile, it’s a good bet you’re familiar with the hierarchy of effects. Or maybe you know its upside-down cousin, the purchase funnel.
The hierarchy is typically represented by the acronym AIDA (Awareness, Interest, Desire, Action). The AIDA model was meant to map the effects of traditional advertising.
In the era of social media, however, I think we need a new hierarchy. I propose Attraction, Engagement, Experience, Diffusion. Granted, the resulting acronym isn’t the hottest, but I think it better reflects the way social media works.
Attraction This, of course, refers to pull (as opposed to push) marketing. Instead of pushing messages out, be interesting or valuable enough to pull people toward you.
Engagement This could refer to a range of engagements from reading a blog post to sampling to purchase and use.
Experience Once the engagement has been initiated, the experience will decide if you go in the positive column, the negative column, or somewhere in between.
Diffusion People with positive experiences will ideally spread the word, extending the reach of your attraction.
Technically, this isn’t a real hierarchy. For one thing, there’s no drop-off between engagement and experience. You can’t really have one without the other.
Maybe engagement and experience could be combined. Or maybe it’s a cycle (or something else) instead of a hierarchy.
“The problem is the misconception that innovation in banks is something that can be turned on, like a switch. The truth of the matter, though, innovation is a corporate capability that takes time to develop like any other.”
What banks need, he says, “is a business process which can predictably and reliably respond to all this change, and which doesn’t abandon the fundamental tenet of prudence upon which banks must rely.”
The solution he proposes is futureproofing, “the process of planning what the future might bring and doing something about it.”
The introduction lays out three characteristics of a futureproof bank::
Systematically focuses on tomorrow
Seeks out solution for the problems of tomorrow
Explores many things at once
There is ample evidence that futureproofing works. A recent study, for example, linked senior leaders’ focus on the future with their banks’ success in innovation.
Without futureproofing, says Gardner, banks will not be able to respond to change quickly enough to stay competitive.
The author knows from whence he speaks. Until recently, he served as Head of Innovation and Investment & CIO Technology, at Lloyds TSB. He was also part of the Financial Services Industry Group at Microsoft.
Regular reader of Gardner’s blog, BankerVision, know that he almost always has something thought-provoking to say.
Innovation and the Future Proof Bank will likely provoke a swarm of thoughts.
The public outrage over bank bonuses has returned with a vengeance. Right or wrong, it’s a threat to your bank’s brand.
The only question is, what are you going to do about it?
The public is in no mood to be educated about variable compensation. And, as far as consumers are concerned, banks are all guilty by association. Battening down the hatches and hoping to ride it out isn’t going to help either.
Here are three strategies you can use to protect—and even improve—your brand:
Be Perfect
Customer experience is a major contributor to your brand. Make sure all customer touchpoints—frontline, website, call centers, etc.—are functioning at their absolute best. Start by assuming they’re not, then look for shortcomings and fix them.
Mirror Your Customers
Talk their talk. Share their values, aspirations, and concerns. Turn up the empathy. If they see themselves in you—if your story is their story—you’ve got brand. People are drawn to doing business with people like themselves. So be like them.
Get Real Local Amp up your community participation. Think micro as well as macro. Gestures like sponsoring a little league team (and showing up for games) are powerful bonding agents. Seize every opportunity and seek out more. Actions, not words, are key.
Obviously, the object here is to focus on empirical evidence that your bank is different.
The more local you get, the less national issues will reflect on your brand. The more that customers identify with you, the less likely they’ll be to lump you in with other banks. And the easier you are to work with, the more they’ll be inspired to spread the word.
The amazing thing is, as you put these three strategies into practice, you’ll realize—along with your customers—that you actually are different.
Lanier is famous in tech circles for being the father of virtual reality. His knowledge of all things digital is ocean-deep and equally broad, so it behooves us to pay attention to what he has to say.
What I want to focus on in this post is Lanier’s take on the process of lock-in.
Digital designs get frozen into place when, “many software programs are designed to work with an existing one.” When too many programs are dependent on the original, it becomes virtually impossible to change. That’s lock-in.
“Because computers are growing more powerful at an exponential rate,” cautions Lanier,” the designers and programmers of technology must be extremely careful when they make design decisions.”
“The process is of lock-in is like a wave gradually washing over the rulebook of life, culling the ambiguities of flexible thoughts as more and more thought structures are solidified into effectively permanent reality.”
In other words, “Lock-in turns thoughts into facts.” They become, “Defining, unchangeable rules of our lives.”
Lanier’s admonition is one that brand managers should take to heart. I’ve seen a lot branding practices get locked in before the inherent limitations are explored and implications are adequately understood.
The result is often a brand identity that’s already chafing before it’s buttoned up. By then, the investment is so high that rethinking is no longer an option.
It’s human nature to want to get out of the uncomfortable thinking stage and into action—to turn the first decent thought into a Gantt Chart.
Exercise restraint.
Or before you know it, you’ll be locked in and living with the consequences.
Due to family health problems and a workload ramp-up, I’ve let this blog languish for the past month or so—a situation I plan to correct, starting now.
Over the next couple of weeks I’ll be addressing brands, advertising, social media, and general bank marketing, along with a few new topics that have caught my fancy.
Lately, it seems that ads featuring J.D. Power trophies are proliferating. I’ve seen such ads for cars, health plans, mobile phone services, real estate companies, insurance companies, and (drumroll) banks.
All I can say about these ads is, “What were these companies thinking?”
Due the strict advertising standards J.D. Power imposes on these award winners, the ads all end up looking like J.D. Power ads instead of ads for banks, cars, etc. This is great for J.D. Powers. Not so much for the advertisers:
A colleague of mine calls these ads “identity killers” because they make all the advertisers from all the industries look alike.
So much for differentiation.
What’s more, the advertisers pay J.D. Power a tidy sum for the privilege of running these ads.
The big question is, do these awards mean anything to consumers? I haven’t been able to find any research indicating that they do.
I did come across an article that said consumers don’t put much stock in them. Instead they assume the awards are an advertising gimmick, most likely bought instead of earned.
If your bank should receive one of these shiny objects, resist the urge to tell the world about it, especially with advertising dollars.
Save your money for connecting with consumers in a way that really matters.
Welcome to Outside-In Banking, a blog for bank marketers and anyone else involved in financial services. I believe that many banks are way too internally focused for their own good, so I try to provide an outside-in perspective. Expect a lot of opinions, raves, rants, and unsolicited advice. I hope to get the same from you.
Posted by tombrzezina 
Welcome to Outside-In Banking, a blog for bank marketers and anyone else involved in financial services. I believe that many banks are way too internally focused for their own good, so I try to provide an outside-in perspective. Expect a lot of opinions, raves, rants, and unsolicited advice. I hope to get the same from you. 
