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Archive for the ‘customer service marketing’ Category

There are three words that almost always generate buzz in the business world, yet are almost never spoken because companies are so afraid to utter them.

DON’T BUY NOW.

Consumers rely on companies (like, say, banks and credit unions) for expert advice. I rely on my HVAC guy to tell me how best to manage my home’s heating equipment. I rely on my bank or credit union to give me advice on how best to structure my debt or savings to reach my goals. Etc.

Consumers also expect, from experience, that while they generally trust the company they do business with, that the company is going to make recommendations that are also in the best interest of the company itself. Of course, this often means recommending the consumer buy something from the company. That way, both the company and consumer win…right? Not necessarily.

It can be highly buzzworthy when a bank or credit union recommends something to a consumer that is NOT in the best interest of that bank or credit union. It’s unexpected, and it demonstrates to the consumer that the financial institution is truly being objective, and on acting in the consumer’s best interest. ¬†For banks and credit unions, this may be:

  • Advising a consumer with bad credit to apply for a mortgage at a different institution where their chances of approval are higher
  • Telling a consumer about a higher rate on a deposit product at the credit union down the street
  • Advising a potential investor making a trade in their portfolio–a trade that would earn the company a commission

There are SO MANY banks and credit unions who talk about building a brand of being “a trusted advisor” (a good platform but a tad common). If you are truly a trusted advisor, it would be IMPOSSIBLE to act in the consumer’s best interest without at least occasionally recommending something that your company either doesn’t provide, or doesn’t have the best option for.

And here’s the real kicker: ultimately, it IS in your best interest to say DON’T BUY NOW. Why? Because you’ve now proven you are truly a trusted advisor, which greatly increases loyalty because the consumer knows you’re very objective, and in their corner. You’ve also likely generated referrals and created a good deal of buzz, because the consumer is so surprised you would recommend something not in your best interest.

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A recent article in US Banker put some numbers behind a message that we’ve been pushing for a long time: social media should not be used as a platform for blatant advertising or product pushing – especially not in financial services.

Only four percent of social media users have ever visited a financial institution’s profile on a social networking site, which might suggest that consumers aren’t really interested in having “social” contact with their bank or credit union. Or, maybe it indicates that financial institutions are just using social media the wrong way. I think it’s a combination of both, but probably more of the latter. Honestly, most bank and credit union Facebook pages are not value adding – they tend to list opening hours and general info, have some pictures from events at branches, etc. None of that gives a person any reason to visit.

Research indicates, “the top three types of messages that consumers indicated were appropriate from a financial institution were: customer service (34 percent), community involvement (29 percent) and educational (28 percent).” Seeing as customer service is at the top of the list, maybe banks and credit unions should take a page out of Zappos’ or JetBlue’s book and start using Twitter/Facebook as one of their primary communication tools. I can think of more than one instance where it would have been helpful if I could have asked my bank a question over Facebook (they are in a different time zone). Unfortunately, the closest thing I could do was message them through online banking, to which it took them three business days (that’s right, THREE) to respond. Unacceptable? Absolutely.

In this day and age, consumers expect quick response from companies – especially the ones they trust with their savings. Social media would help banks and credit unions reach the level of responsiveness that consumers are accustomed to. It may take some effort and learning, but sites like Facebook and Twitter are free, so what’s the downside?

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I wanted to share an idea with you I had about a year ago. We at PSST! have not yet had the opportunity to do this with one of our clients, so maybe you can steal it and make it work for you. If you do, be sure to let us know how it goes!

I am sharing this example because it illustrates an incredibly important point about word of mouth marketing for banks and credit unions: if you are able to think creatively, generating buzz doesn’t have to expensive or hard. You just have to be inventive. Here’s my example: Let’s say you are going to run an auto loan promotion at 3.49%…about 0.5% better than your normal rate.

Scenario 1: The Traditional Approach
Your typical plan would be to develop some ads, newsletter articles, web graphics and statement stuffers to let your members and prospective members know. You’d get a few takers (more than normal) who would come into your branch, apply for the loan during the specifial offer, get the promotional rate as promised, and leave feeling satisfied because they got what they expected. Not a bad scenario at all.

Scenario 2: The Buzzworthy Approach
Instead, though, let’s say you tried a slightly different tact: you decided not to advertise the special rate at all–not even with in-branch signage. In other words, it was business as usual. You’d have your normal number of applicants come in, apply for the loan at the standard rates, get approved and leave feeling satisfied that they got what they were expecting.

But here’s the twist: the next day, after the customer/member has their new loan, you call them and say “Hey there, I wanted to let you know that I was reviewing your loan file, and I noticed that we can actually give you a better rate, 3.49%, which is 0.5% better than the rate you got. That will save you $400 over the life of the loan. If you’d be willing to swing by the branch tomorrow for 15 minutes, we can change your paperwork really fast and get you the better rate. Would you like to do that?”

Compare
Look at Scenario 1: what is the customer/member likely to say at the end of their transaction? Absolutely nothing. We fulfilled their request exactly as they expected, without anything particularly positive or negative. There’s nothing to talk about–nothing to tell their friends. Think about it: you’d never tell your friend, over a beer, “hey, dude, guess what? I ordered a turkey sandwich at Subway today, and they gave me a turkey sandwich.” That’s no story. A transaction that meets expectations is invisible–it doesn’t prompt any conversation.

By contrast, what would the customer/member be likely to say after Scenario 2? How about “holy !@#$ I can’t believe my bank/credit union called me up AFTER the loan closed, to save me more money. They didn’t have to do that, I was already satisfied with my loan. That’s *^%$#ing amazing!” The customer/member would be HIGHLY likely to tell their friends and family, because they’d be so darn flabergasted that they experienced something so uncommon….therefore resulting in more applicants hoping to get the same surprise bonus as their referring friend.

See the Difference?
In Scenario 1, you would have gotten more customers/members to apply in the first place, but none of them would have told any friends (unless the rate you offered was ridiculously low, in which case you’re simply buying the market). Plus, you would have had to pay for all that marketing cost. In Scenario 2, your initial number of applicants would have been smaller (your normal volume of applications), but the buzz from those customers/members would have been huge and would have spread exponentially, resulting in a) more applicants, b) positive buzz about your bank/credit union, and c) savings on the initial marketing expense.

/Jeff

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Looks like big players in the financial industry are starting to realize that traditional advertising isn’t where it’s at anymore! Bank of America recently announced that they would reducing their spending on traditional outlets (print, tv, etc) and doubling spending on digital platforms. As their Head of Marketing Claire Huang put it, “But we’re realizing that digital not only allows you to provide information, you can have real, live connections. It’s not just a flat little square box you have two seconds to look at.” Financial companies have been a little bit behind other industries in realizing this – but I’m glad they’re coming around!

I think the important thing about Bank of America’s move is that they are not just switching from advertising in “flat little square boxes” on paper to “flat little square boxes” on computer screens. Rather than focusing their increased spending on web ads, most of the money is going toward increasing internal efforts, like texting, Twitter tools and webcasts. Huang states, “Traditional advertising of digital like search and banner ads has shrunk a little bit.” The bank understands that improving customer service marketing and two-way communication will be more effective (and targeted) than just plastering sites with ads. It would be cool to see a bank really embrace Twitter and other social media sites in the same way that brands like Zappos have in the past. Could Bank of America be heading in that direction?

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Sounds like a public service announcement, right? Well, in a sense it is. Marketers often forget about the prevalence and power of “secondhand buzz”. What is it? It’s the word of mouth generated by a consumer who has a second-hand experience with a brand. In other words, they’ve heard either positive or negative things about a product or service and repeat these sentiments to others. Unfortunately for companies, most secondhand buzz is negative, because people are statistically much more likely to repeat a bad review than a good one. For example, I’ve never been a Bank of America customer, but I occasionally bad mouth them to others because of the awful stories I’ve heard through the grapevine, (like this one). I’m guessing the bank probably didn’t think about that when they raised people’s interest rates to ridiculous levels or charged obscene fees.

The lesson that banks and credit unions need to remember is that a customer experience story is not just going to be repeated by the person directly involved, but also by second, third, and fourth-hand sources. So take care in making each experience a good one! Because whether we like it or not, consumers tend to be more enthusiastic about issuing warnings than recommendations. The thought of people not wanting to repeat stories about good experiences is kind of depressing, but there are ways to increase “positive secondhand buzz”. Make the customer experience not only good, but also surprising. A customer expects all their experiences to be good – that shouldn’t be a talking point, it should be a given. So, to make it worthy of repetition by second, third, and fourth-hand sources you have to do the unexpected. A restaurant, for example, could give away random gift certificates to diners for their happy hour or dessert. What could you do that would catch people off-guard?

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Have you ever left a gym or ended a contract and experienced forceful selling or callousness during your departure? It’s not uncommon – many companies seem to behave like people who aren’t paying customers no longer affect them. This short-sighted approach to customer service probably digs organizations into a hole they aren’t even aware of. An ex-customer’s negative word of mouth can influence whether people decide to become new customers – and it only takes one bad experience at the end of a relationship to create negative WOM.

Andy Sernovitz posted on this recently and I felt it was a relevant topic for banks and credit unions, who see customers/members come and go all the time. Think carefully about how you respond when a customer/member tries to leave your financial institution. Do you:

1. Try to sell them on something?
2. Pressure them to stay?
3. Stop being friendly?
4. Become unhelpful during the leaving process?

These are all things that could make an ex talk negatively about you – even if their overall experience as a customer/member was positive. It’s the last interaction that will stick in their mind, so if you care what the person says about you, make it a positive one. Switching banks is notoriously hard, and a customer/member will be grateful if you help make the leaving process positive and easy. Remember that customers don’t always leave because they aren’t happy with their experience. People move to new cities, their life situations change – it’s not always about you.

If you ever want an ex back as a customer/member, or ever want any of their friends or family to bank with you, give them a great last impression. Assuming that the rest of their experience with you was positive, send them off with a smile and they should be a reliable source of good WOM.

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To continue our series of posts on social media, I’d like to address the issue of value. Where does the real value of social media lie? Financial companies tend to fixate on getting a tangible ROI from all marketing efforts, making this an important question to ask.

The answer might be difficult for many bank marketers to accept. The true value of having an long-term, consistent social media presence is building brand awareness and loyalty. When not connected to a particular campaign or promotion, the results of these networking efforts can be very difficult to establish. Countless blog posts and articles have been written about the struggle to measure results from social media marketing (SMM) efforts, but maybe people need to come to the realization that certain “soft factors” cannot be measured.

If you are using social networking sites like Facebook and Twitter to better communicate with customers and form stronger bonds, the success of this community involvement might be difficult to record in numbers. Some tracking is available, but how to you measure the value of answering a customer’s question? Or the value of customer recommendations and critique? Do you try to measure the ROI of answering the phone at your bank or credit union? How is using Twitter any different?

Ultimately the answer is a mixed bag. Depending on what you are using social networking sites for, you may or may not be able to reliably measure a return. But if your bank or credit union is using social media for general awareness and customer service, (not a specific promotion), then the value may very well lie in hard-to-measure results like perceived community involvement, openness and responsiveness.

/Maija

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