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Lisa Hronek Posts Tagged ‘Banking’
How long have you been with your bank?
I’ve banked with my bank for 14 years. It’s a significant chunk of my life – somewhat less than half but more than a quarter. Together we’ve navigated the excitement and work of four mergers – three acquisitions on their part and one marriage on my part. In that time, my husband and I have also welcomed our first dog (and said goodbye), bought a house, had three children, refinanced our mortgage a couple of times, changed jobs six or seven times, gotten a new credit card (or ten), bought and sold six cars, said good-bye to three grandparents, finally got serious about a 401K plan, established an IRA rollover account to deal with 401Ks from pervious employers, set-up a brokerage account, set-up college savings accounts…
Life goes on, right? Our story isn’t much different than many other peoples’ stories.
And frankly my bank’s story isn’t that much different from other banks’ stories. They’ve merged, expanded their online banking and mobile services, done away with free checking, and struggled with earnings. And no, they haven’t started charging a monthly fee for a debit card, but they’re thinking about it.
So, at the end of the day, we’re just an average customer and an average bank doing business together. But to be honest, I feel like I’ve changed more than they have. My bank pretty much handles my day-to-day banking transactions as it always has. Granted, the ability to deposit a check with my phone is a revolutionary change from my point of view, but I’m not sure that anything else about my bank has gone through a revolution.
Oh, I know all sorts of things have changed on the backend. I know this, because literally one second after I deposited a check with my phone, I got an email that they received the deposit request. And another second after that it popped up in my online banking statement.
But from a customer standpoint, my bank handles my business the same way it did when I first opened my account with them 14 years ago.
I’m writing about this because I’m working on a Webinar about lifecycle marketing. I don’t get many offers from my bank. Of course we get a few. Most recently they asked us to set up automatic mortgage payments made directly from our checking account. Since my husband doesn’t believe in online banking, we won’t be signing up for the service anytime soon. Not even for the $25 they are offering us. The offer promises to “make your life easier.” It won’t really though. Because if I brought it up with my husband he’d say “no.” And then I might be unable to refrain from muttering something about a “technology laggard.” And then he might be tempted to say something along the lines of “you’re not as cool as you think you are.” And then we’d be in a quagmire. Which is really the complete opposite of making my life easier.
But back to the lifecycle of our relationship with our bank…We often get offers encouraging us to open a savings account. Uh…did they not notice that we already have four savings accounts? Throughout our “relationship” I’m sure we’ve gotten numerous offers. And from the banks’ perspective they are probably exactly where they want to be in their relationship with us…two checking accounts, one jumbo mortgage, one credit line, three credit cards, four savings accounts. Much of that growth has happened with little effort on their part. They inherited the mortgage, the line of credit and two credit card accounts through merger activity.
Truth be told, they haven’t done the best job of knowing what’s going on with me. If they truly knew me, they would be trying to sign me up for a 529 Account (3 kids, remember?) Or better yet, offer me a wedding savings account so that I can save for when those same 3 kids eventually decide to tie the knot. Or a car loan. One car has 130K miles on it, the other has 99K miles on it. A new car is in our near future….I wonder if my bank realizes that?
Chase supports the troops
Previously the remit of USAA, Chase has created banking products available only to military personnel. Chase’s new products are more generous than its standard free checking and savings products and include features that are normally available only through premier level products. These products are only available if the service members deposit their base pay (not just allotments) into their Chase accounts, but the products don’t have a minimum balance requirement. Along with the consumer banking products, service members are offered Military Mortgages and special Business Banking products.
How do these compare to the products already offered by USAA?
There isn’t a huge difference between the Chase and USAA consumer banking and mortgage products. Chase and USAA both offer free checking and savings accounts, no out-of-bank ATM fees and pay interest on some checking balances. The mortgage products both have discounts on fees, specialized military-focused consulting and VA loan benefits. Chase added free safety deposit boxes, doesn’t charge additional fees on wire transfers and 1% cashback on mortgage payments (offered on mortgage products to civilians, too). But, Chase is the first mover in offering business products to service members who have their own small business.
The government has spent the last few years repeating that the American people need to support the troops, and that small businesses are the only way out of the recession. Chase is stepping up to the challenge of supporting service members’ complex personal financial needs and found the white space of supporting service members who are both protecting the country and trying to pull us out of the recession.
Why The Customer Isn’t Always Right…
I love the quote from Henry Ford: “If I’d have asked my customers what they wanted, they would have told me ‘a faster horse.’’ I love it so much I’ve used in my past two webinars.
And at the risk of sounding like a broken record, I’m using it again here. Obviously.
But who hasn’t relied on customer surveys and focus groups to guide future decisions? The problem is that customers don’t realize the full realm of possibilities. Certainly customers can provide feedback on the user experience – what they like, what they don’t like, whether a product fits their needs, etc. But it’s incredibly difficult for customers to provide anything beyond “tactical” information.
Some of the most significant product developments have been brought about by applying new technologies to our everyday life. Which customer suggested getting money from a hole in the wall as a way to improve the banking experience? When Netscape first became available, which customer requested online access to bank accounts and as a way to pay bills? When cell phones became mainstream, which customer suggested it would be great if they could get their email on it AND deposit checks with it?
I know it wasn’t me. I suggest things like better account management.
I like – no, love – the Apple approach. Specifically the Seven Principles of Innovation. While I think everyone can find relevance in all the principles, I think three of them are particularly relevant to financial services.
- Principle #4 – Sell Dreams, Not Products: Think differently about your customers
- Principle #6 – Create Insanely Great Experiences: Think differently about your brand experience
- Principle #7 – Master the message: Think differently about your story.
Much has been written about Steve Jobs’ approach – there’s no shortage of blogs, articles and books detailing the approach. The reality is that few – if anyone – will be able to replicate the approach. But I do think it can challenge banks to do better.
Everyone is well served to think differently and of course, every company wants their customer to have insanely great experiences. At least I hope that’s the goal. And finally, there’s no harm in thinking differently about the message customers get about the bank.
My colleague, Susan Menke, has written about the fact that banks need to stop promoting rates, fees, products and services and focus on what the customer really wants. And in my last webinar, I spoke about how banks tend to market based on the number of branches and ATMs available. Mintel research indicates that customers visit a branch 1.76 times a month and an ATM 1.95 times per month. That’s a lot of marketing for something customers do less than 4 times a month.
But in this day and age, who needs an ATM? It seems like as long as you have your phone, you’re set. You can check balances, pay bills, or transfer money, deposit checks, email a friend money, and even pay bills through remote capture.
And if Google has their way –which they often do –your phone will become your wallet. If you’re thinking that the Google wallet is a far-off vision, I’m not so sure. With all the great new tools out there, does The Bank With the Most ATMs really win? Or is it about services, benefits, features and customer service? Because in the end, those are the things that instill customer loyalty.
My intention is to challenge the wisdom of doing things just because that’s the way they’ve always been done.
How do you establish customer loyalty when the main reason people bank with you is simply out of convenience? It’s this type of thing that has commoditized banking and eroded customer loyalty.
Banks talk about relationships. But I have a sneaking suspicion that relationship really means number of accounts. Isn’t a relationship more about a great experience and loyalty? In my book, it is… So what does that mean for bank marketing?