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Experience Brands and Banking

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My presentaiton for the Retail Financial Lending Summit 2010 - a summit that aims to provide innovative ideas that deliver impact. ...

My presentaiton for the Retail Financial Lending Summit 2010 - a summit that aims to provide innovative ideas that deliver impact.
The new realities of marketing and what it all
means for banking and retail lending- Insights
from one of the world's leading brand experience
agencies:
•The move from promotion-based brands to reality based brands and the rise of experience brands
• The difference between customer service and
customer experience...and how to measure it...through satisfaction, or something more?
• The new demands on the human face of banking and financial services and how experience innovation can be a killer app.
• The role of every customer experience touch point... online and offline, temporary and permanent, human and technological

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  • Source: Chief Meaning Officer Shanghai April 2010 on Slideshare
  • Source: Chief Meaning Officer Shanghai April 2010 on Slideshare
  • Source: Chief Meaning Officer Shanghai April 2010 on Slideshare
  • Source: Chief Meaning Officer Shanghai April 2010 on Slideshare
  • If everyone from supermarkets and search engines to phone companies and airlines offer banking services where does this leave the banks? The answer could be as back office low margin sub-contractors or maybe banks will re-frame themselves as ‘wealthcare’ businesses.
  • Reliant Bank has blended a smoothie shop into one of its branches. The bank has put a Maui Wowi franchise inside its Lennox branch, where you can now get tropical fruit smoothies, exotic Kona coffee, muffins and “Go for the Gold” protein bars.
  • The visualization uses data from “The Way We Pay“, a report published by Payments Council of the UK depicting the decline in the use of cash over the past decade. The number of cash transactions in the last ten years tell their own story. According to the Payments Council statistics, in 1999 three-quarters of all transactions were carried out using cash (73 percent), compared to 59 percent in 2009. The Council suggests that by 2018 less than half of all transactions will be paid by cash.Why the sudden shift? The habitual use of the credit card to pay for their purchases, makes people feel safer carrying smaller amounts of money as well as the added benefit of accumulating points for free flights, accommodation and other perks. Those who prefer cash as a mode of payment, avoid high interest rates, and have the opportunity to barter in ways that waving a credit card doesn’t allow.
  • Facebook has applied for a trademark for Facebook credits, its virtual currency platform. The logo (in the image above) which has been included in the application submitted to the US Patent Office is in the form of a gold coin, depicting a globe in the middle with two arrows flying out in opposite directions. The familiar Facebook icon of a blue square with a small “f” placed at the bottom of the coin completes the logo. Below is the description of this logo, provided by the US Patent Office via Trademarkia :Financial exchange services, namely, providing a virtual currency for use by members of an online community via computer and communication networks; facilitating the exchange and sale of services and products of third parties via computer and communication networks; incentive award programs; telecommunications services, namely electronic transmission of data, messages and information; entertainment services, namely facilitating interactive and multiplayer and single player game services for games played via computer or communication networks.It is interesting to note from its description that Facebook may connect its virtual currency to a wide variety of third party consumer products and services in the future. Currently, Facebook Credits can be used to pay for Facebook Gifts and virtual goods in Facebook Games.Techcrunch: “Trademark Application For Facebook Credits Reveals Globe Coin Logo And Other Details”
  • Australia’s big banks are failing to make the grade according to consumer ratings released by Mozo.com.au, which named Bendigo Bank as Australia’s favourite bank. Mozo.com.au is the first service to combine financial product comparison tools with customer ratings, allowing Australians to compare banking products and providers on everything from interest rates to customer service.The site’s launch ratings, collated from over three thousand people, reveal that regional and community banks are outperforming the bigger banks in every way. “For the first time, Australians have passed collective judgement on their banks and the Big Four were found lacking,” said Rohan Gamble, founder of Mozo.com.au.“We launched Mozo to show Australian banking customers that competition is still alive and well. Our service lets people search the market and compare products from small and large providers to get the best possible deal, then see how the provider is rated by other customers on important issues like trust and service.” Customers rated the banks and their products in five categories: trust, customer service, convenience, product features, and rates and fees. Australia’s favourite banks are: Bendigo BankMembers EquityBank of QueenslandSuncorpBankWestThe regional banks dominated the Most Trusted Banks category despite the current global financial crisis and speculation over the ability of smaller banks to weather the turmoil. The major banks rated extremely poorly on trust and customer service, and were noticeably absent from the Best Rates & Fees category. The results show that the big banks, some of the biggest advertising spenders in Australia, can no longer hide behind their expensive advertising campaigns. Mr Gamble added, "Not only did the regional banks top the customer ratings, the smaller providers also have some of the most competitive lending and deposit products in the market when it comes to interest rates and fees."“Our advice to Australian banking customers is to look beyond the marketing campaigns, and evaluate financial providers on the strength of their product and service offerings.”Mozo’s comparison tools help consumers assess the best value financial products for their situation and make informed financial decisions.Mozo.com.au has also developed a free financial ‘health check’ service that shows consumers whether they would benefit from switching their home loan, credit card or personal loan, and which products would save them the most.Consumers enter their existing product details and Mozo compares hundreds of products to generate a personalised report showing the Top 5 products that would save them the most money and help pay off their loan or credit card debt faster.“In the current economic climate it’s more important than ever to find the loan, credit card, savings product or bank account that will save, or make, you the most money. Unfortunately, too many Australians put up with bad deals from their banks because it’s too difficult to do anything about it. We hope to change all that by giving people everything they need to research and compare financial products in the one money zone.” About the Mozo ratingsIn an Australian first, Mozo partnered with Roy Morgan to ask over 3,000 Australians to rate and review their financial providers on trust, customer service, convenience, product features, and rates and fees. Mozo.com.au aggregates these reviews to give consumers the inside story on everything from the bank with the best service to the highest rated providers of credit cards, home and personal loans, savings products and bank accounts.
  • USAA, a privately held bank and insurance company, plans to update its iPhone application this week to introduce the check deposit feature, which requires a customer to photograph both sides of the check with the phone’s camera. “We’re essentially taking an image of the check, and once you hit the send button, that image is going into our deposit-taking system as any other check would,” said Wayne Peacock, a USAA executive vice president.Customers will not have to mail the check to the bank later; the deposit will be handled entirely electronically, and the bank suggests voiding the check and filing or discarding it. But to reduce the potential for fraud, only customers who are eligible for credit and have some type of insurance through USAA will be permitted to use the deposit feature. Mr. Peacock said that about 60 percent of the bank’s customers qualify. USAA may seem like an unlikely innovator in mobile banking. It ranks in size just below the top 20 banks in the United States, and serves mostly military personnel, though many of its products are available to anyone.But with just one branch, in San Antonio, and customers deployed all over the world, the company has been aggressively developing an anytime, anywhere banking strategy. Three years ago, it introduced the option of depositing a check from home using a scanner. That laid the groundwork for the phone deposit feature, which USAA plans to offer on other phones this year.
  • While British retailer Tesco has been offering financial products for several years now, the Financial Times believes that the grocer is about to become a serious threat to UK banks. With 6m bank accounts and £4.5bn in deposit accounts the paper believes that they can easily leverage the public’s distrust of established financial institutions and launch into checking accounts and home loans:Tesco declared its ambitions to become the “people’s bank” yesterday, capitalising on public disillusionment with traditional lenders to launch an aggressive expansion into financial services.…Tesco is planning to open 30 bank branches in its stores this year and to broaden its range of financial products. It aims to start offering current accounts to customers within 18 months and may also move into the mortgage market in the longer term.Sir Terry said that the crisis engulfing Britain’s financial services industry had played into Tesco’s hands.He added that Tesco’s retailing services division – which is made up of Tesco.com, Tesco Telecoms and Tesco Personal Finance – could be making £1bn of profits within a decade, against its current profits of just under £400m.
  • building a customer-centric company requires a clear vision, backed by strong leadership and a clearly defined goal to grow shareholder value; an operating model that breaks down functional boundaries, allowing information to move freely and decisions to be made quickly in response to customer feedback; and significant changes to what we call “business enablers”—the people, processes, and technology that keep the business running from day to day.The difference in the winning programs we studied was they all shared a concrete vision about the goal of their relationship with customers and a clear articulation of how this relationship will deliver superior shareholder returns.
  • Founded in 1999Zappos is powered by serviceProviding the best service and online shopping experience possible.Free shipping both ways. 365-day return policy.Fast fulfillment. Expedited delivery. Fast, friendly & expert customer service.Best selectionOver 1100 brands.Over 150,000 styles.Over 800,000 unique UPCs.3 million pairs of shoes.Photographed in multiple angles.100% of products inventoried (no drop ship).Zappos is a service company that happens to sell shoes, clothing, handbags, eyewear, watches (and eventually a bunch of other stuff).
  • It starts with the hiring process. At Zappos, we actually do two different sets of interviews. The hiring manager and his/her team will do the standard set of interviews looking for relevant experience, technical ability, fit within the team, etc. But then our HR department does a separate set of interviews, looking purely for culture fit. Candidates have to pass both sets of interviews in order to be hired.We've actually said no to a lot of very talented people that we know can make an immediate impact on our top or bottom line. But because we felt they weren't culture fits, we were willing to sacrifice the short term benefits in order to protect our culture (and therefore our brand) for the long term.After hiring, the next step to building the culture is training. Everyone that is hired into our headquarters goes through the same training that our Customer Loyalty Team (call center) reps go through, regardless of department or title. You might be an accountant, or a lawyer, or a software developer -- you go through the exact same training program.It's a 4-week training program, in which we go over company history, the importance of customer service, the long term vision of the company, our philosophy about company culture -- and then you're actually on the phone for 2 weeks, taking calls from customers. Again, this goes back to our belief that customer service shouldn't just be a department, it should be the entire company.At the end of the first week of training, we make an offer to the entire class. We offer everyone $2000 to quit (in addition to paying them for the time they've already worked), and it's a standing offer until the end of the fourth week of training. We want to make sure that employees are here for more than just a paycheck. We want employees that believe in our long term vision and want to be a part of our culture. As it turns out, on average, less than 1% of people end up taking the offer.
  • TED Talks Barry Schwartz makes a passionate call for "practical wisdom"
  • Best Buy’s Geek Squad turns the ordinary business of technology troubleshooting into a customer adventure.Some companies have found that a service offering, in and of itself, can be an important differentiator and provide an opportunity to create an emotional bond with customers. Best Buy’s Geek Squad is a customer service differentiator that offers a unique customer experience. The concept is simple: Turn the ordinary business of technology trouble-shooting into a customer adventure. The retailer uses Geek Squaders—dressed in Men in Black outfits, addressing one another with military titles, and driving specially marked Volkswagen Beetles—as a unique way to provide customer service to residential and commercial clients. More than 17,000 Geek “agents” are at work in the U.S., and the program is expanding to Canada, the U.K., and Spain.
  • What does all the data say? That customers want to be served face-to-face. If banks are to move beyond acquisition - to retention and to wallet penetration - then they must reinvent the branch from a glorified transaction centre to a product sales and advisory service center.Up to 90% of customer relationships are formed - and lost - in branches. Banks will not succeed at maintaining and growing customer relationships unless they provide customers with quality sales and service in branches. Banks must reinvent the Forgotten Branch.
  • The conundrum of customer centricity, however, is that most customers don’t see banks as providers of advice-based services—that holy grail of wallet penetration.This is not surprising given the extent to which branches have been deskilled over the last decade.The perception map shows that banks deliver only on broad knowledge and bright smiles—not what is needed to deepen client relationships.
  • There has been a lot of excitement recently around the “Gap-ification” of branches—making them look more like retail stores than like stodgy old branches. But a mere face-lift is not enough. The reinvented branch…
  • The Umpqua Bank retail design strategy translated the culture of a small community bank into an integrated brand experience and helped Umpqua grow from $120M to $8B. While most banks focus on convenience and speed, Umpqua connects with localists, people who value community prosperity as much as their own. Part café and part community resource center, Umpqua’s new retail experience exemplifies the concept of "slow banking". Sponsored events include book signings, investment clubs and lectures. Umpqua Rewards is a loyalty program that pays points for doing business with other members.With 151 branches, Umpqua has in recent years unveiled a new generation of branches that sport touchscreen video walls providing product information, Internet cafés, and conference rooms that any business, charity, or community group can reserve at will. Umpqua branches also sell CDs and other goods by local musicians and artists, a gesture the bank hopes will further position its branches as community hubs. "It's all contrary to what you might find in a bank," says Lani Hayward, executive vice-president for creative strategies at Umpqua. But deposits at the branches Umpqua has converted are up an average of 30% since the changeovers, and the average number of products sold to each household is double that at the traditional branches, she notes. "We decided we couldn't beat the bigger banks on rates, so we had to make personal finance more personal. And this was a way for us to do just that."
  • ING Direct has a string of cafés across the country. Each one has several internet terminals which allow their account-holders to check on the status on their ING Direct accounts and surf the internet free of charge. The cafés often feature seminars on financial topics such as money management, handling one's retirement, mortgages, and credit management – and each barista is a trained financial advisor. And the best part: there’s nothing on the menu for more than $3!ING Direct credit seminars | Yes, the four loungyING DIRECT Cafes in NY, LA, Philadelphia and Wilmington have been around for a while now, in fact ING was amongst the first financial services firms to take the BEING SPACES trend and run with it. But they don't just serve free coffee; mortgage seminars are also on the menu. In their own words: “Our free seminars at ING DirectCafés will help make the home buying process a little less complicated. So, if you are one of the millions of Americans who wishes there was a Mortgage 101 class, then this is the seminar for you! We’ll provide light refreshments and snacks. All you need to bring are the questions.”NG Direct is an online bank, but management realized the bank needed some physical presence to reassure the public the bank was more than a billboard. So execs devised the ING café, which look like Starbucks; people can go have coffee, smoothies, use a free-wireless connection, and learn about ING if they choose. But the eight “branches” have no transactional ability whatsoever; people still must sign up and do transactions online. For example, the ING café in Chicago had “Bike to Work Week Specials” in mid-June. “Every bicyclist that rides to the ING DIRECT Café during Bike to Work Week will be treated to a free bike valet, beverage and tune up. While you’re there, ask a Café Associate about other simple ways to save your money.”
  • Greeters armed with Samsung Q1 Ultra tablet PCs can do simple tasks such as change your address. If you need more in-depth assistance, they will zap your details to a personal banker's pager, so you can be whisked off to a private area without having to explain your needs all over againThis is the new organic-style queuing system, which will be rolled out to other branches. Look at those tourists: can't you just tell they're having warm and fuzzy feelings about being in such a fluid queue?Once you reach the counter, you'll notice there are no screens. The money is secured and only dispenses the right amount of cash for each customer, so there's no danger of someone vaulting the counter and cleaning out the cash drawers.
  • WaMu rolled out its retail BRANCH DESIGN with great fanfare in 2000, and used the new model as they moved into new markets such as Las Vegas and Atlanta. Later they remodeled existing branches to incorporate the new retail features. Before WaMu collapsed last September, they had spent roughly $1 billion on a branch-building binge.Now, with the collapse of WaMu and a chastened industry eager to earn back the public’s respect, some argue that WaMu’s unconventional branch design represented the kind of flamboyant experimentation that got banking into such trouble. “Customers want knowledgeable friendly bankers in an environment that’s convenient and reassuring,” says Tom Kelly, a Chase spokesman. “Customers aren’t interested in lingering; they want to do their business and go.” So, in the end, is Chase’s traditional branch design more appropriate for the serious-business of banking?Getting the answer right to this question is important for the industry as it emerges from the current crisis. Branches are expensive to operate, and Bob Meara, a senior analyst at Celent says they’re getting less profitable all the time as branch traffic ebbs and more transactions move to the Web and other channels. At most banks, says Ron Shevlin, a senior analyst at Aite, people go to branches to resolve problems they can’t resolve elsewhere, or because they have privacy concerns using the Internet, or just out of habit-and this is not a profitable business model. “For most bank transactions, what’s convenient for the customer, and cheap for the bank, is not the branch.” To turn this around, he says, banks must find a way to make the bank branch the channel of choice for certain customer interactions, not just the default choice for problem resolution and Luddites.In fact, some bankers are thinking along these lines, and they repeat a similar mantra: innovative branch design and technology must encourage engagement with employees, not to discourage human interaction. Executives at Barclays, Umpqua, Key Bank and TD Bank, to name a few, view the branch as the channel of choice to build customer relationships. “The biggest thing in banking is the relationship, and you can’t do that online,” says Lani Hayward, evp of creative strategies at Umpqua Bank. “You can make mistake after mistake after mistake, and the customer will stay with you if they believe you’ll take care of them.”Key Questions: Why would Chase want to spend millions undoing everything WaMu had taken $1 billion and 8 years to accomplish, despite a company-wide push to cut costs? Why would Chase basically drag the WaMu branches back to the past?Actually, from Chase’s perspective, the argument to overhaul WaMu’s branches makes sense. For starters, it’s obvious why Chase would want to sanitize branches of all evidence linked to the largest bank failure in history. It’s also clear why Chase would want to standardize operations and create a consistent brand experience with one, basic branch delivery model.But the real reason Chase needs to remodel WaMu’s branches is that the two banks had totally different business strategies.It boils down to these two fundamental differences: (1) Chase offers small business, and (2) Chase offers private-banking services. WaMu never did.Operationally, these two components of Chase’s business model necessitates branches with certain elements. WaMu branches branches were never designed to accommodate merchant services, nor did WaMu’s branches provide the degree of privacy required for a highly-consultative private banking audience. That’s because WaMu was a retail bank. Chase may offer retail financial services, but it’s a commercial bank at heart.WaMu, as retail bank, was quite successful…at least from a branding perspective. The thrift did everything it could to distance itself from other competitors in the crowded retail financial space. It ran ads touting how WaMu was different as they made fun of bankers. They changed their name from Washington Mutual to WaMu.WaMu new who it was and knew how to build its brand. That meant coming up with their own BRANCH DESIGN and breaking away from traditional branch offices donning stark decors and staff tucked safely away behind bullet proof glass.
  • Ultimately, Oppenheimer and Hayward agree that branch design and technology can only contribute so much to a customer experience. Relationship building requires old-fashioned, face-to-face customer service. “Our greatest asset is the culture, that’s the crux of our success,” Hayward says. “What sets us apart is how we operate and how associates get trained.” Not only are employees educated across products so they can cross sell, she says, they are trained by the Ritz Carlton in service.In the opinion of Aite’s Shevlin, the need to train employees in relationship building is not a message most banks have absorbed. “The problem most banks have in terms of building relationships will not be solved by branch design

Experience Brands and Banking Experience Brands and Banking Presentation Transcript

  • THE RISE OF THE EXPERIENCE BRAND
    What does it mean for Banking?
  • Peter Drucker
    BECAUSE THE PURPOSE OF BUSINESSIS TO CREATE A CUSTOMER,BUSINESS HAS TWO FUNCTIONS: MARKETING AND INNOVATION
  • The most powerful brand experiences today are experienced by a few (locally) but witnessed by many (globally). Brand experiences shape experience brands. Experience brands (brands that recognize that they can and should differentiate themselves through the experiences they create, not just through the products and services they sell) rule the world.
  • IS THIS A BANK?
  • one year share certificate with at least $25 deposited
    11,000 people opening account and saving $8.6 million last year.
  • DOES MAKING CUSTOMER CENTRICITY PAY?
  • Building a customer-centric company requires
    A concrete vision about the goal of their relationship with customers and a clear articulation of how this relationship will deliver superior shareholder returns
  • Power of Repeat Customers & Word of Mouth
    19
  • Zappos Core Values
    Deliver WOW Through Service
    Embrace and Drive Change
    Create Fun and a Little Weirdness
    Be Adventurous, Creative, and Open-Minded
    Pursue Growth and Learning
    Build Open and Honest Relationships With Communication
    Build a Positive Team and Family Spirit
    Do More with Less
    Be Passionate and Determined
    Be Humble
    20
  • July 2009
    SOLD TO AMAZON FOR $928 MILLION
  • SERVICE?
    What’s preventing great
  • Barry Schwartz and "practical wisdom"
  • THE BRANCH
  • THE REINVENTED BANK
  • Umpqua Bank
  • The golden bullet is not technology, or design
    IT’S PEOPLE
  • Alignment
  • You can understand where you’re NOT delivering
    Love the brand
    2
    On-going Branch & Call Centre Experience
    5
    Online research
    Neutral about the brand
    Consultative Experience
    11
    4
    7
    In Branch Experience
    Follow-Up & Wait Time
    10
    3
    Complaint Resolution
    1
    Call Centre Experience
    Advocacy & Consideration0
    Hate the brand
  • In order to work out where you can make improvements
    Love the brand
    D
    Consultative Experience
    C
    On-Going Branch & Call Centre Experience
    5
    A
    Advocacy & Consideration
    B
    11
    1
    In Branch Experience
    Follow up & Wait Time
    Complaint Resolution
    7
    Call Centre Experience
    2
    4
    10
    3
    Online research
    Neutral about the brand
    Hate the brand
  • But you need to inspire your team’s BEHAVIOUR
    President Kennedy once visited a NASA site and met a janitor.
    Kennedy asked the janitor “And what’s your job?”
    The reply was, “Mr President, I’m helping to put a man on the moon.”
  • Critics
    (off brandbut active)
    Drivers
    (on brandand active)
    Cynics
    (off brandand inactive)
    Residents
    (on brandbut inactive)
    And understand that your team is made of different types of people
    Are vocal, passionate with a vision of a better way but don’t feel part of the brand
    Are true believersand advocates
    how outspoken and influential they are
    Believe in the brand but don’t put themselves out tochampion it
    Are passive and keen not to rock the boat
    the degree to which employees are acting on behalf of the brand
  • Who have different engagement needs
    Highly engaging
    Engaging
    Least engaging
  • Warmth and Wisdom