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Archive for March, 2011

word of mouth marketing is consumer-to-consumerI want to see some job postings out there, offering positions at community banks and credit unions–not as a sign of our industry’s stability, but as a sign of a new way of thinking. These job postings will have a new kind of job description: no B2B or B2C experience required. In fact, none wanted.

Why? Because there’s an entirely different type of experience this new position requires: C2C.

C2C is consumer-to-consumer…also known as word of mouth. And it’s a completely different skill set. Instead of asking the traditional B2B/B2C question “how can we persuade the buyer to engage with us,” C2C asks, “how can we get the consumers to engage with each other…and give them something to talk about.”

So get that job posting out there. Put it on craigslist. Put it on industry job boards. Or better yet, take this opportunity to practice what you’re hiring someone to do. Ask yourself, “what would make candidates want to talk to each other about this job?”

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Most banks and credit unions strive to have competitive–if not superior–rates on products and services. The belief is that offering 2.50% APR on an auto loan leads to far more success than offering 3.00% APR. Makes sense…mostly.

Any consumer can (and does) look at 2.50% as better than 3.00% on an auto loan–the numbers are easy to compare, and the smaller one is always better. The credit union or bank offering this superior rate is probably getting more business because of it.

BUT: if tweaked a bit, their superior loan rate could create even more of an impact on consumers–and result in more word of mouth.

Example
On a $15,000, 48-month auto loan, the rate difference between 2.50% and 3.00% only equates to $3.30/month in savings in the payment for the customer/member. That’s nothing. They aren’t even going to notice that $3.30 difference each month at all. So, they’re getting a better rate but without any of the buzzworthy gratification of feeling like they are saving.

But what WOULD feel gratifying to them? Receiving one single lump sum $40 check at the end of each year of the auto loan. A substantial rebate–a pleasant, buzzworthy surprise in the mail. Enough to treat yourself to a dinner out, a new shirt, or a deposit into your vacation fund.

Same Investment, More WOM
To the bank or credit union, the investment is the same ($40/year in rate concessions), but it’s packaged in a different and more interesting way; a way that might cause the customer/member to tell a friend, “woah, I got a $40 rebate in the mail today!” Plus, this approach would result in better member/customer retention because people would need to stick around in order to get their rebate check.

[As you know, we here at the PSST!/CBC family are huge advocates of applying business concepts from other non-financial industries. In fact, the idea we’ve shared is very similar to, though not inspired by, how REI runs their business as a co-op]

The Bottom Line
There are many ways to make the seemingly mundane aspects of financial services more buzzworthy and interesting. You just have to open your eyes to a new, word-of-mouth-oriented way of thinking, and peel away all the assumptions and limitations we’ve self-imposed as an industry (for example, we assume the savings from a lower interest rate must be amortized evenly across a loan’s life).

Or, if you can’t do it yourself, you can always call PSST! and CBC!

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One of the biggest purposes of word of mouth marketing for your bank or credit union is to create a higher level of brand engagement. Simply put, WOM helps give people a reason to care about your company.

That’s why we were excited when the cool folks at the Credit Union Times called our friends at CBC for their thoughts on the important topic of brand engagement. They also then called our partners at Market Insights, and the resulting article, Engagement: One Size Doesn’t Fit All, is chock full of excellent insights from CBC and PSST!’s Jeff Stephens and Market Insights’ Brady Walen.

We think you’ll like the article. Check it out: Engagement: One Size Doesn’t Fit All

Don’t Forget CBC’s Brand Engagement Webinar on March 30, 2011

Also, since you’re into brand engagement, don’t forget to register for the upcoming webinar by our pals at CBC, Brand Engagement: The Holy Grail for Banks and Credit Unions.

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