KQ Article

Goodbye crisis, hello boom… It’s probably a little early to sing Happy Days lyrics, but my vote is that we treat the global financial crisis like a deep dental cleaning and move on.

It was really more like a root canal, but nonetheless, it’s hard to deny that we all have cleaner, leaner and more resilient organizations as a result.

And what better time to shift our strategy a bit and try some new things? Our staff and customers are in desperate need of inspiration. It’s the perfect opportunity to both energize your employees and engage the cross-generational customer bases that your financial institution either has or needs to have.

The staple suite of financial products offered across generations will remain basically the same. There will be checking accounts, savings products, and credit/debit cards. But instead of assuming that everything must be done online (it actually doesn’t), I suggest we dig a little deeper, and look for potential changes at the level of identity and affinity with your brand itself.

The power of the sub-brand
During its transformative years, IBM was fond of saying, “This is not your father’s IBM.” If you want to attract Baby Boomers’ kids, you can’t be your father’s financial institution, either. That’s why some forward-thinking banks and credit unions are launching sub-brands with edgier and more irreverent values, as a strategy for connecting with Millennial customers. Some examples:

• ProjectFlipside.com
• TheAddisonCafe.com
• FrostMomentum.com

My favorite of these examples is Addison Café, created by the Addison Avenue Credit Union. This sub-brand gives people a fresh forum to talk and learn about money, and to access the credit union’s products and services. It’s a far more appealing — and contemporary — approach for Millennials than traditional credit union brands.

The beauty of this sub-branding strategy is that it retains existing Boomer customers by continuing the brand they know and trust, while providing an additional medium through which you can try some new things. If all fails, you can always kill the sub-brand with minimal disruption to your existing customer base.

The global financial crisis has left a vacuum for new brands and new brand associations. Trust in established brands has eroded considerably, and many consumers are now quite willing to try something new in hopes of restoring their sense of security. It is an ideal time to enhance an existing brand or even launch an entirely new one. Not to mention that ad space and airtime are still heavily discounted.

Update the crib
This may surprise you, but one of the early key findings from the 2009 Deluxe Collaborative suggests that Millennials are just as demanding of the bricks-and-mortar experience as they are of online banking. While construction remains slow nationwide, there has never been a cheaper time to invest in piloting a new branch layout. You should strive to make your experience:

• Aspirational. Bring the brand promise alive in your physical environment in a way that will make you successful five years from now, not five years ago.
• Destination-based. Make your branch “visit-worthy”— perhaps through a partnership with Starbucks for an in-house coffee shop? And is it really necessary for people to stand in line? Wouldn’t it be nicer to have a ticket system with some comfortable sofas instead?

CRMagic
In my opinion, customer relationship management (CRM) is the lifeblood of authentic customer engagement — period. When you have as many customers per staff member as we typically do in banking, a rigorous CRM system is a must. What follows is an incredible example of what is now possible through this technology.

Over the last few years, the Prada store in New York has been experimenting with radio-frequency identification (RFID) technology and customer databases. The store captures as much information about customers as possible, including, of course, what they purchase. The next time a big-spending customer enters the store, the RFID tag in the customers’ membership card alerts the database to bring up the information on that shopper’s buying preferences, which if they were to equip their clerks the way Apple does, could eventually get sent right to their mobile PDAs.

And here’s the really amazing part: the imagery on the flat-screen TVs throughout the store also changes based on this customer’s buying habits. So not only are the staff better equipped to create a great experience for Prada’s best customers, the store itself changes to align with their desired experience. These flat-screen TVs can also change their display based on what garments are being moved around the store. For example, if a customer grabs a pair of black shoes, the screens will switch to display Prada couture shows featuring merchandise matching those very shoes! Imagine what something along these lines might do for your branch.

This story aligns with research from this year’s Deluxe Collaborative, which clearly reveals that customers and members are tired of being treated like a number. Specifically, they have little tolerance for those stock, pre-authored “we value your business” statements. In fact, statements like these may have the opposite effect of what their messaging intends to convey. It’s businesses like Prada that demonstrate how individually consumers must now be treated. It is efficient and cost-effective personalization.

These are just some of the ideas that have come up through the Deluxe Collaborative process, and there will obviously be many more. But one of the main takeaways thus far seems to be that innovation cannot stop in difficult times. Today’s leading banks and credit unions seem to be those that were willing to try new things during the recession, and are now committed to continuing to surprise and delight consumers in new ways as times improve.

Your desire to cut costs must not compromise the most important asset for sustaining a competitive edge: your relationship with your customers and members. And now more than ever, continuous innovation is a key ingredient to keeping consumers satisfied and loyal.