Build your audience, not brand recall

Revenue is the driver of business, and most businesses for the longest time have been accustomed to building a pipeline of business, targeting specific demographics or segments of customers, or raising brand awareness so as to generate interest in products or services. Recently, however, a subtle shift to consumer engagement has made itself evident, one that may very well fundamentally change the way we view marketing and the business of customer acquisition in the future. 

The failings of broadcast brand recall

Slowly but surely since the late 90s when the Internet appeared, traditional marketing media, namely broadcast advertising mediums, have been failing. Part of this has simply been reducing effectiveness of the broadcast mechanisms themselves like Newspapers, which in 2012 suffered their lowest year of advertising revenue (inflation adjusted) since 1950, or direct mail advertising, which peaked in 2005. In the case of channels like Television, the abundance of DVR (Digital Video Recording) technology and streaming media services like Netflix and Hulu have produced a dramatic change in the effectiveness of TV commercials, as more and more consumers opt to watch their favorite shows sans advertising. Something more insidious, however, has slowly been at work undermining basic marketing precepts.

TV Ad spend (inflation adjusted) has declined by 30% in last 15 years

In the 1940s and 50s various key pieces of research and marketing theories emerged which have dominated customer engagements over the last 60-70 years. At the core of these concepts were two basic precepts. The first was greater understand of human motivations in respect to purchase behavior and aspiration, probably best characterized through the work of A. H. Maslow and his “Theory of Human Motivation” and his well known “Hierarchy of Needs”. The seconds was extensive research into the ability to influence consumer buying behavior, and the concept that a consumer could be stimulated to choose a product or a brand based on latent stimulus recall – the process of reinforcing a brand and it’s core values over time through messaging and advertising. These two basic marketing and behavioral principles have underpinned the workings of advertisers and marketers for almost a century.

Based on this, marketers and advertisers have worked tirelessly to improve their understanding of market segments, consumer behavior and psychology with the objective being to match very specific messages that stimulate either brand recall at a future date, or an near-term response to an aspirational desire or a perceived need. There were those at times that attempted to reduce the effectiveness of these activities down to some simply formula that could be applied to a target audience or segment – applying market research, sample focus groups responses, impression and conversion metrics. There were others that believed the real masters of these arts were the most creatively and intuitively gifted artisans, those constantly seeking the next campaign, advertisement or message that resonated so perfectly with its intended audience that it would result in a windfall gain for its sponsor, and a cascade of awards from the industry at large in recognition of the inherit brilliance exhibited.

The truth was often somewhere in the middle.

Today, however, we are seeing long held traditional broadcast mediums failing in their effectiveness combined with a deluge of messaging platforms anew, which muddy the waters from which latent stimulus recall is meant to emerge. This combination of noise and reduced effectiveness is making traditional broadcast campaigns increasingly uneconomical, and thus we’ve seen a dramatic repurposing of advertising budgets to mobile, social and online in recent times, attempt to find new mediums that can replace the failing ones.

Newspaper Ad Revenue has declined below 1950 levels in last 10 years


Mobile Ad Spend Explosion!


Internet advertising is projected to grow by 15 percent each year between 2012 and 2015 and will account for 66 percent of global ad spend growth
Zenith Optimedia Report (June 2013)

But the problem is not just that broadcast mechanisms are failing (or losing effectiveness), the problem is that getting brand recall in an ocean of messages is getting harder and harder.

Building advocacy not recall

The aim in the past has been to build brand awareness, and stimulate brand recall with increasing effectiveness over time. In addition, campaign marketing and database marketing are designed to target specific audience segments with a product offer that might fit the audience, giving a higher percentage of conversion that a general broadcast approach. These all rely on the effectiveness of traditional broadcast mediums.

As social media has emerged we’ve seen tribes and crowds collectively demonstrating behavior or responses to certain messages. In some cases it is as simple as a viral video of a cat doing the harlem shake, and in others it is powerful crowd-based movements or advocacy – such as the Occupy Movement that emerged out of the global financial crisis.

In the past brand awareness was also, to some extent, powered by or enhanced by word of mouth. Today, however, brands can literally come from nowhere to being the power behind a billion dollar start-up, all based on pure advocacy. Brands like Twitter, Instagram even Facebook were all built in the space of just months with zero advertising dollars spent, and yet they became some of the biggest and most recognized brands on the planet.

In these instances, there’s no strategic advertising approach that is going to create viral advocacy with the likes of Instagram. Advocacy is also a little more temperamental that traditional well built brand awareness, although advocacy in itself by its nature builds awareness. Take Facebook. Recent research shows teens abandoning Facebook in droves, largely because it has become uncool – as soon as your Dad or your Grandma is on FB, it doesn’t quite have the same dynamic.

Facebook saw a 9% decline in popularity amongst Teens this year

Advocacy can be generated very quickly, but the crowd is fickle and they can turn just as quickly. The acquisition of Tumblr by Yahoo a couple of months ago quickly created a backlash against the cool, new social brand. Here are some great moments of dialog from the Tumblr crowd that illustrate:

The advantages on the advocacy side, however, far outweigh the negatives. Advocacy, when done right, adds massive credibility to the brand and creates broad affinity at very little costs. It also scales much better than traditional awareness approaches. The trick with advocacy is that it is not generally generated through messaging strategies. It’s more likely to be generated through dialog with the crowd, or a general engagement philosophy of the brand, but one thing is certain – the more the crowd is empowered by the brand, the more engaged they are, and the more advocacy is allowed to happen.

“More than 4,500 survey responses were collected from each brands social media pages over a two month period and supplemented by 800 interviews to inform the findings. This showed that four out of five consumers would be more inclined to buy a brand more after being exposed to their social media, with 83 per cent happy to trial the product in such circumstances…”
IAB Study Finds 90% of Consumers Back Brands After Social Media Interactions – via The Drum 

I recently had the opportunity to discuss social engagement with the head of Social for Citibank and for ASB Bank in New Zealand. The resulting discussion was very insightful and showed that even during times of crisis, social media is becoming an anchor for consumers to connect with your brand.

See BREAKING BANK$ – How the crowd is changing brand advocacy in Banking

So if you’re in a business today where you are trying to create spin, engineer virality, amplify the brand or architect the dialog, maybe step back from that approach and try something simpler.

  • Dialog – Demonstrate an openness to engagement
  • Crowdsource – Find out what the crowd likes and dislikes
  • Analyse Sentiment – Align your approach, language and product strategy, giving to the crowd (as opposed to selling or messaging)
  • Incentivize Influencers – Encourage and incentivize influencers in the crowd to advocate

There’s one central shift in philosophy for brand mechanics here though. Advocacy and brand affinity occurs far easier when there is real value and when the crowd creates the sentiment. The objective should be to align the organization with the crowd, not to manipulate the crowd. Another word of warning – rewards or loyalty program approaches are far less effective than the unbridled passion of a crowd who loves what you are doing.

Whatever your strategy for engaging customers, brand awareness and brand building can no longer be done independent of building an audience. It’s not about pipeline or demographics, it’s about advocacy.

PTP FTW! The beginnings of something much greater…

I had a call with an industry colleague earlier today talking the recent news on GMail Google Wallet integration, Dwolla’s funding round and the “Square Cash” announcement. At large I’m seeing two broad industry responses to these moves.

The first, is to see this all as a distraction from mainstream banking and that essentially all these new players are just competing between themselves for marginal business, here’s a few notable examples:

Alternately, you have Google, Square and Paypal taking aim not at each other, but at an industry mired in friction, process, and rules and regulations that appear to make a very simple task like sending money from Person A to Person or Business B, a lot harder than it would appear to be. This very friction, is for many in the industry, the reason why they think new P2P processors won’t ever compete with the industry at large – quite simply, the barrier to entry and the workload and overhead from a regulatory/reporting/risk perspective means new players will always have to defer to the existing rails, particularly when you have to cash-in and cash-out.

I’ll give you a hint… Square is not competing with PayPal

Here is an interesting dialog on Y-Combinator’s Hacker News which refers to this conundrum –

Dwolla’s take on their service is very different to this – Dwolla are positioning themselves as a true alternative not only to ACH, but also to the merchant rails provided by Visa and Mastercard. In my recent interview with Ben Milne from Dwolla on Breaking Bank$, he made the following insightful comment on their role in the payments ecosystem:

“…because the internet is always available you should be able to access your money and exchange it with anyone else, and because all that money is essentially tracked as data, it shouldn’t really be that expensive to exchange. What we ended up realizing was, that in order to do that we had to create an end-to-end solution. As the company started scaling up on the volume side we started to realize some of the limitations to ACH and things like that. So, one – our early kind of philosophy was ‘we just want to solve this simple problem’ and I don’t think I realized exactly how big it actually was. To solve the problem we had to come up with an end-to-end solution that not only allowed us to communicate with financial institutions, but directly with consumers, developers and merchants… what we were left with is a solution that communicates directly with the financial institution core, right down to the end consumer.”
– Ben Milne, Founder of Dwolla, Breaking Bank$ Radio Show, May 9th, 2013

The issue perhaps is one of philosophy. Banks are trying to reinforce the existing rails for two very simple reasons:

  1. They perceive existing rails as “less risky”, and
  2. They make money off the existing rails and the surrounding friction/complexity, and don’t want new entrants displacing that very large, but still essentially closed-loop mechanism (i.e. you need a banking license to be a part of the ‘club’)

So you have two competing goals here. One is simplification of the mechanism of sending money, and in doing so it is creating new closed-loop systems, but systems that are far more user friendly, offer lower or equivalent costs (both on fee and time) for consumers, and also are technically far more open and capable from a platform perspective. When was the last time your bank let you GMail your employees their salary? Ok, we’re not there yet, but the day is coming.

While the bank SWIFT and ACH networks, and Visa/Mastercard/Amex/Discover rails are certainly massively dominant, by far the fastest growing payments modalities right now are the likes of PayPal, Square, Google and Dwolla. These players aren’t competing against each other, they are solving the friction problem in moving money from one person to another. But here’s the kicker…

Once enough people join the closed loop system of a PayPal, Google, Square or Dwolla, then the only remaining issue is getting cash in and out of that system. This is where proponents of the current system breath a huge collective sigh of relief. They’ll point to the news around BitCoin’s and Mt. Gox recent run in with the Fed around unregulated movements of cash, as Governments clearly want to monitor and regulate cash going in and out of the system due to concerns on money laundering, and the banks are the only players in town that have the license to do that right? Well, technical money transmitter licenses also allow non-bank players in this space.

The challenge is this – once enough people are using alternative P2P payment networks or mechanisms, then the utility of that system goes through the roof. Metcalfe’s law is one of those nice little laws that govern the growth of closed loop systems that turn into these highly scalable networks, but probably Reed’s law governing social network growth is more applicable. The beauty of a independent payments network can easily be shown by the success of PayPal and more recently iTunes and even Starbucks…

With 128 million active accounts in 193 markets and 25 currencies around the world, PayPal enables global commerce, processing more than 7.6 million payments every day. Because PayPal helps people transact anytime, anywhere and in any way, the company is a driving force behind the growth of mobile commerce and expects to process $20 billion in mobile payments in 2013
PayPal Media 

While the banking industry might like to categorize these P2P initiatives as hemmed in by regulations, or limited in impact, the implications are far more reaching. Since the arrival of the internet we have seen an explosion of alternative payment schemes. While initially on top of the existing rails, these closed loop systems are now creating behavior that is far more efficient than the incumbent systems they’ve replaced, and are connecting payers and payees in whole new ways. Inject context, rich overlay, merchant deals and offers, interchange fee pushback, mobile modality, social context of payments (e.g. splitting a bill at a restaurant), etc then the current ACH network and card network rails just aren’t robust enough to adapt.

P2P is the start of a whole slew of alternative payment modalities and use cases. Payment modalities that are being created by users on the move, and by networks that are much lower friction than the incumbent networks. The only thing stopping this from cutting out the back-end players, is volume and the cash-in/cash-out problem. Once you have enough utility in the network, however, as we have seen with the likes of M-PESA in Kenya, then the incumbents have to play by new rules or else they are simply circumvented.

Utility will trump the old rules. P2P is just the beginning and I’ll let you in on a little secret … they’re not competing with each other.

Social Media (SoMe) – What comes next is even more disruptive

Last year Facebook hit 1 Billion users. It is reported that the average Facebook user spends 75 minutes per day using Facebook. Mobile use has also increased significantly over the last two years. Globally smartphone growth year-on-year was at 42% in 2012, with 17% global penetration, but more significantly with most developed economies expecting 70-80% smartphone penetration within a couple of years. iPhone growth towered over the previous iPod, and iPad over the iPhone, but today Android phones like the Samsung Galaxy III are being adopted at 600% the rate of the iPhone (Source: Gartner/Morgan Stanley).

This has led to massive increases in social media use over mobile. WeiXin, a new Social Mobile Network powered by TenCent in China, took 14 months to reach 100 million users, and just 6 more months to reach 200 million. Snapchat, based in the US is sending 60 million mobile-initiated photos per day, or 5 billion snaps in little over a year. Facebook’s own mobile efforts have borne real fruit with a 40% increase in revenue largely attributed to mobile advertising improvements.

Google Plus is enjoying significant growth, overtaking Twitter for the coveted title of the #2 social network on the plant. Don’t count Twitter out just yet though. This year Twitter has broken some of it’s own records as well including the highest number of retweets (3.5m in 24 hours, across 200 countries) for @BarackObama’s “Four More Years” tweet

Four More Tweets? The biggest tweet of 2012


As social media continues to embed itself in modern society, we have many traditional businesses and brands still scratching their heads trying to make sense of it all. Where’s the ROI, what’s the business case for investing in Social Media? Apart from the likes of Facebook, is anyone actually going to be able to make money out of this? Isn’t it ironic that it wasn’t that long ago that we were asking the same things about the Internet.

Recently when Facebook faltered post-IPO, there were no doubt some whom felt justified in their skepticism. But Facebook is still here, as are LinkedIn, Twitter, Google Plus and others. It sounds awfully similar to the post-dotcom boom period, when many who had held off investing in web or had failed to understand the permanent nature and fundamental impact of the Internet, perhaps felt justified in claiming that some sensibility had returned from the overzealous market reception of this new technology. In the end, though, the biggest growth companies of the last decade, even after the so-called dotcom collapse, were all companies married to the Internet.

We’re seeing some very familiar patterns with Social Media here, and it leads me to speculate that it’s only just the very beginning of a fundamental new way of doing business.

Haven’t we seen this movie before?

When radio first became popular in the early 1900’s there were fears from many that it would be extremely destructive to society. These fears included the likes of the fear that families would sit around listening to entertainment programs, wasting hours upon hours, when they could be sitting around the table studying scripture, having sing-alongs around the piano or simply talking. The success of radio hinged on news, story-telling, the ability to create dramas and comedies that would capture the imagination of listeners, along with some factual, up-to-the minute news delivered as it happened, instead of having to wait for the morning’s broadsheet to report. There was the occasional sporting event thrown in also. The first organizations to make money off this new medium were the owners of the radio stations and the content producers, the second were those that produced advertising and conduct marketing activities via the ‘wireless’, and finally businesses who tapped into this new phenomenon to create market reach.

“Radio broadcasting is spectacular and amusing but virtually useless. It is difficult to make out a convincing case for the value of listening to the material now served out by the American broadcasters…Is the whole radio excitement to result, then, in nothing but a further debauching [morally corrupting] of the American mind in the direction of still lazier cravings for sensationalism?”
E. E. Free [science editor], “Radio’s Real Uses”, The Forum, March 1926


The radio was perceived by some as a threat to society

When TV appeared en-masse in the late 50’s, the same concerns surfaced again. TV would be a great time waster, would produce a decline in morals, and would disrupt families from the wholesome activity of sitting around listening to the wireless. Radio certainly didn’t disappear as a result of TV, but certainly the kaleidoscope of content and sharing, advertising and marketing, programming and story telling became richer and more complex. On top of this new technology were first the ‘networks’ the emerging giants of TV programming – ABC, CNN, NBC, BBC and the like – and advertising firms who knew just how to turn the emotion of a 30-second story into a product endorsement or sales pitch. For decades businesses who could afford to advertise on this medium, were able to generate significant results and revenue through brand awareness.

Internet proved the pattern once again, but the difference in the web was it allowed two-way interaction, something not possible via earlier mediums. This allowed the web to move from a story-telling and advertising medium, to a business platform where transactions in real-time could take place. The first players on this new layer of technology – believed that owning the network and content distribution over that network was where real value lay. The ISPs (Internet Service Providers), the advertisers once again, but now the equivalents of the NBCs, the CNNs players like AOL and Yahoo. Very soon we realized it wasn’t about content, but about platform. The web was a technology that allowed not only advertising and brochureware, but also e-commerce. The Internet’s most disruptive characteristic was the challenge to existing distribution mechanisms and businesses. It would eventually result in the demise of long-established brands in publishing, music and retail, the disintermediation of travel agents, brokers, and dealers, and the creation of new giants like Amazon.

Network, content, advertising, then real revenue

Social Media is following the same pattern. The initial ‘land grab’ was all about the network. Then advertisers flocked to shove more messages down the new pipe to consumers. However, the really interesting developments are the new ways of doing business that will emerge on top of this layer. New businesses that will be disruptive to traditional businesses based on physical/geographical communities instead of the better aligned virtual communities centered on interests and behaviors. New businesses that will eliminate classical market segmentation and demographics, by generating rapid affinity within social groups that don’t fit traditional marketing classification.

On top of Social Media has come a plethora of “Apps”, marketing initiatives, communities and the like. Instagram, Foursquare, Pinterest, Vine, Cinemagram and many others have been designed on top of Facebook’s capability to provide a common user platform, but also allowing for rapid sharing and adoption through the social network in the form of posts, links back to the App, etc. If a friend posts an Instagram Photo, it shows up on Instagram, but also invariably on Facebook as someone shares their pics, and when your friend clicks on your pic they are then invited to try Instagram for themselves. Instagram, Foursquare and others maintain their own ‘network’, but you always tend to find new friends from Facebook or Twitter to build your network within the App’s ecosystem.

The biggest challenge for these businesses is finding revenue models as they evolve. Many of the same challenges occurred for businesses starting out on top of the Internet layer. Business like “” and “” found this out as revenue didn’t come quickly enough to save their businesses. We’ll have a few fits and starts on the social business layer also, but those that emerge triumphant will not necessarily be the network owners (Facebook, G+, Twitter), but businesses that marry community, collaboration and the reach of social in entirely new ways. As before with the web, these businesses will disrupt traditional players massively, and emerge as some of the new giants of the next decade.

Some interesting examples of entirely new businesses that are emerging on top of the social layer are business like Kickstarter, Peer-to-Peer lending, AirBNB, Yelp, Uber and others. Business that thrive on community and work by using social as the glue to commerce, creating value through the community, but monetizing it in unique ways also.

Not sure where the ROI is coming on social? By the time you wait to see others find it, it may already be too late for your business. Social is here to stay, and it’s just getting started.


Gen-M: the abandonment of “touch and feel" and the emergence of "see and hear"

Baby Boomers and Gen-X have in common the need to experience life in all it’s glory. Whether that is born out of a sense of adventure, the need for tactile feedback or in the sense of face-to-face social connections, at the core of much of our buying behavior historically has been the need to ‘touch and feel’ a product before a purchase. There’s a subtle shift in this behavior with Gen-Y and Gen-Z/Digital Natives (sometimes collectively called Generation-M or the ‘multi-tasking’ generation) that is critical to understand if you are going to engage this community successfully moving forward, and it emphasizes why the physical store is under increased threat.

In the banking space I’m often confronted with passionate arguments for why face-to-face interactions, why the availability of advice and the psychological comfort of brick-and-mortar spaces still matter. The problem is that those describing these ‘values’ are inevitably Baby Boomers or Gen-X consumers, describing their comfort levels and buying behaviors. There are a number of key trends we can observe today that signify an abandonment of this traditional buying behavior for the next generation of customers.

The psychology of buying is changing

The last 10-15 years has already seen a significant shift in buying behavior as a result of changing distribution models. When the web started to mature and the dot com phenomenon emerged, we saw the first changes in buying behavior around the willingness to buy physical products like software, books and CDs via online stores. Over time this impacted the retail storefront of the book and music industries as less and less people visited physical stores. The argument oft heard, however, was that products like clothes, shoes, electronic goods, etc. still needed a good old storefront interaction. But success of brands like Zappos, Amazon with their broader retail, and the phenomenon of ‘showrooming’ and the influence of mobile in-store is part of a broader behavioral change, a change in buying behavior writ large.

Visual search and curation are rapidly emerging as key platforms for Gen-M consumers

Visual search and curation are rapidly emerging as key platforms for Gen-M consumers

Pinterest, Instagram, Tumblr, and other social networks are all very powerful communication tools for Gen-M. YouTube is their most popular search engine. Their connection to brands is no longer based on a need to touch and feel the product, or to connect face-to-face. Their connection is visceral, but driven by different senses. Generation M have moved from touch and feel, to see and hear as their new connection with brands, and it needs to happen at speed.

Take a Gen-X attending a concert. They go for the experience – to be a part of the event, experience the band live, to be immersed. The Gen-M digital native goes for the experience too, but they’re driven to share photos, video and to extend the experience of the event to their network. Personal connection to the experience is balanced with the need to share and talk about that experience.

The teenage female of the species would gather at the mall in the 80s and 90s to have a retail shopping experience with her friends, the experience wasn’t the purchase alone, but the collaboration, the social connections, the mall experience. They’d find their way as a group in the shopping environment, trends would develop based on what looked cool, what emerged through group consensus. Today that shopping experience is driven collaboratively online through shopping “haul videos”, discussions around back-to-school or spring break fashion and the like. Decisions on fashion choice aren’t driven by that in-mall collaboration or advertising messages, but through online advocacy, connection with the brand via content – not the store.


Michelle Phan is an example of a new brand that resonates more powerful with Gen-M that traditional media or brands

Michelle Phan is an example of a new brand that resonates more powerful with Gen-M that traditional media or brands

It’s why videos like this Lady Gaga Makeup Tutorial has 33 million views. No bank has ever got even a fraction of this type of advocacy-based engagement or traffic via YouTube today.

This is why advocacy of brands is such a critical driving force for this new generation of consumers. This is why they think in pictures, why they video themselves, why they check-in and share photos, why Instagram and Pinterest have grown so fast amongst this group. They want to have a visual connection with the product or brand, and they want to hear about the experience of the brand, whether directly from a friend or from a trusted platform such as their social network.

This is how Gen-M connects.

Advocacy is built through seeing and hearing a brand

So when you think about designing the next generation of banking or retail understand that the buying behavior of your core customers over the next decade is dependent on a connection of seeing and hearing what your brand is all about, not touching and feeling the product or brand in-situ, not getting advice or speaking to an expert. No one is a better expert than their friends in a network who’ve already tried your product out. The old concepts of Product, Place and Promotion don’t work in this space. Campaigns have very limited application, because they don’t trigger advocacy well and I’ll always trust my network over a brand message built by an advertiser.

How are your customers connecting with your brand in the see and hear space? Touching and feeling the product is no longer critical. Funneling customers into the store is no longer the best customer experience. Today it’s all about creating a connection with the brand through a product or service that I can advocate and share.

What will it take to restore trust in the banking system?

I grew up in a world where a run on the ‘bank’ was never realistically going to happen. I grew up in a world where when someone wished to declare the truthfulness of their assertion they’d simply say “you can take that to the bank” or when it was a sure thing they’d say “you can bank on it!” I grew up in a world where the government ‘guaranteed’ my deposits, my cash, or my nest egg – as long as I deposited it with a recognized bank or financial institution. But that was then…this is now.

Long memories

In the 1930s and 40s in the United States after the Great Depression, there was a perception that the destruction of individualism and community banking practices in favour of cookie-cutter branch banking approaches built on efficiency, sales, and transaction banking was a risk to the stability of the banking system. If there were just a few big banks, and there was a broad loss of confidence, then the whole system could fail. This explains why the US has so many institutions (7,334 FDIC-insured institutions as of 8 March  2012) compared with other developed economies (5,404 banks in the entire EU[1]) , as US regulators historically sought to institutionalise community support and make it harder for monopoly approaches. These so-called “foreign systems” of branch banking were labelled  “monopolistic, undemocratic and with tinges of facism” and as “a destroyer of individualism”.[2]

This lingering psychology of safety in the physical banking place (and density) stem from long memories over epidemic “runs” on the banking system during the Great Depression:

“It is known to be a large bank and, being distant and perhaps consisting of thousands of branches, is less distinctly visualized than the local bank; and so the people are likely to think of it as great and powerful, and able to meet its liabilities. In the second place if the depositors were to initiate a run on a local branch, it would be difficult to spread their psychology and arouse depositors in distant branches.”[3]

There was a whole post-war generation that grew up with a healthy skepticism of ‘big banks’ and the risk of a run on the bank. With almost 70 years having passed since the Great Depression, however, the banked population as a whole finally started to believe that banks were inherently securely, safe and trustworthy. We were in for a rude shock!

Trust evaporates in the Global Financial Crisis

Since the Global Financial Crisis we’ve learned that banks are just like any other business, if run poorly they can and do fail, and unfortunately there are many banks that made poor business decisions last decade. Many exposed themselves to sub-prime mortgages, CDOs (Collateralized Debt Obligations) and ABS (Asset Backed Securities), others were over leveraged, had poor risk mitigation strategies, or had their own lines of capital too heavily tied to capital markets. Some like Northern Rock were struggling financially long before the financial crisis, and thus were quick to face dire problems when the economy turned south.

The modern day “run on the bank” @NorthernRock (Credit: The Guardian UK)

We also learned that despite a government-backed system of licensing and regulation, that banks aren’t actually part of a social-support mechanism built to help the end consumer – banks are simply corporations with a primary focus on generating profitability for their shareholders. We learned that at a time of great angst in the community over the role and health of the banking system, bank’s support for consumer financing and lending, that there was no overriding moral imperative to bank policy. In fact, they’d be quite happy to take tax payer funds on the premise that it would increase liquidity and allow them to lend back to the end consumer, when none of that happened and they were more likely to invest those funds in generating bank profits and large bonuses for their executives.

As consumers do we trust banks? We might trust that the deposits banks hold are secure, but we’ve seen through the veil and know that banks are not infallible, they’re just corporations hell bent on profits, like all good companies should be. We know they can be mismanaged and fail, and while we might have been ready to support a “bail out” when the financial crisis first hit, we’re now dubious as to whether that was the right strategy.

Regulation and Advertising won’t rebuild trust

The concept that the industry can rebuild trust in banking through a combination of corporate messaging, advertising or reinforcing regulation is somewhat erroneous.

Consumers today have a healthy skepticism and distrust of big banking. As consumers we also have a social dialog structure (social media) that allows us to reinforce our healthy skepticism at mass scale. There’s a group psychology involved, but one that society perceives as a protection, creating transparency. Banks might feel frustrated at this, but the reality is that ‘trust’ in the industry was largely engineered over the last few decades through a combination of advertising and visible regulation, and with the missteps of the crisis quickly evaporated. Now similar attempts to re-engineer trust are likely to backfire.

“Trust” is a common theme in many banking ads

Even regulators, who might believe they are protecting the market and consumers, are increasingly just creating friction between the consumer and institutions (through increased regulation) and the resulting customer frustration and cynicism works against reinforcing trust.

The only way for us to ‘trust’ banks again like we used to, is changing the way banking works. The greater transparency and the better banking serve customer needs, the more we’ll trust banking to work for us. Transparency, utility and great service are all that ultimately matters now, because the old pillars of trust safety, security, brand messaging, fiscal management and regulation are no longer effective.


[2] Source: American Banker Journal, 23 March 1939, p.2

[3] Branch Banking: Its historical and theoretical position in America and abroad, Arno Press 1980 (Chapman and Vesterfield), page 275

Why Facebook dropped Credits, and why FB is more important than ever (for Banks)

It was announced yesterday that Facebook is going to start phasing out their Facebook Credits system. If you’ve been watching my commentary over the last few years, I had entertained Facebook becoming a sort of default currency for the web because of the platform’s ubiquity. However, like many things online, users and developers collaborated to create something different than intended. Soon Zynga and others were embedding their own currencies in their games like FarmVille, linked to real-world currencies like the US Dollar and Japanese Yen. That may have been to avoid the virtual ‘tax’ of the Facebook Credits system, or simply copying the intent of Facebook themselves, to create retained value or value stores of cash as part of the game ecosystem.

Facebook Credits, World of Warcraft Gold, Drag Racing Respect Points, FarmVille Cash and other online currencies have emerged not just as a way for developers to make more money (although that is a key driver), primarily I believe these currencies allow you to play your game with far less friction when it comes to monetary interactions. These virtual currencies have an interesting psychology behind them because of our tendency to view these currencies as not ‘real’ cash, our tendency to spend them without concern in-game is increased, we then just have to make a top-up decision when our credits run low.

Facebook the public company makes a course correction
You can’t really call the shift away from Facebook credits a ‘pivot‘, as some are classifying the recent shifts in start-ups who need to change their business model to turn their business from “fremium” to revenue and profitability, or from an underperforming revenue model to a new direction. This shift by Facebook is more of a course correction in respect to core value of their platform to the community.

Facebook has first of all realized that they are better positioning themselves as a platform to reach consumers, rather than trying to restrict the flow of currency coming into the Facebook economy through a regulated system. There’s a fine line between having a closed loop system like iTunes, gaining widespread support from developers and advertisers, and at the same time encouraging consumer participation. iTunes has the success of the iPad, iPhone and such that stimulate utilization of their Apps store. Facebook doesn’t have the device specialization or the same drivers for growth as Apple. If they want participation, openness and ease of use of the platform to create community become more important than closed-loop systems that monetize at the margin. Facebook Credits threatened to restrict that participation and utilization, and while offering some financial gain from the stored value deposits held and those that went underutilized, the better opportunity for Facebook as a public company is to encourage greater participation to boost the platform’s potential for great ARPU (Average Revenue Per User).

The value for Banks is the platform
Movenbank’s Scott Bales was on hand at CommunicAsia 2012 in Singapore this week discussing the value of Facebook in the mobile payments and banking landscape. There appears to be two fundamental views of the Facebook world when it comes to KYC and fraud. The first instinct of most is to avoid any use of the platform within the banking domain and to ‘train’ customers not to expose their personal details on Facebook because it could create opportunities for Identity Theft. The second is to realize that customers are already on the platform, so it becomes a great enabler for banking services and can be a positive tool in KYC itself. Scott eloquently put it this way…

“Facebook is the ultimate tool for know-your-customer” – Scott Bales

For those of your customers on Facebook, it is indeed an invaluable KYC tool. It takes very little analysis to work out that a persona or identity on Facebook is real and active, as compared with a synthetic identity presented through a standard KYC check. Surely, being able to tell if a person is real, has friends and is regularly communicating with them, is better than a printed utility bill that looks real, but could be completely doctored, or a driver’s licence that is cleverly faked. In fact, there is a whole underground industry in the manufacturing of fake Ids – you can even order fake US drivers licenses online from China these days.

KYC standards have remained pretty much the same over the last two decades, albeit with the tendency for more paper checks and balances since the Patriot Act and the CIP program was introduced. The problem is, any paper document and physical ID artifact can essentially be synthetically reproduced, or real documents like bank statements, etc can be used to apply for real ID artifacts. This is why the US still deals with around 280,000 cases of identity theft annually (although that number is reducing annually). The ability to identify a real ‘live’ person via social media activity, is a massively underutilized tool today.

But more importantly, people are connected via social media. Thus for activity like person-to-person payments or even person-to-business commerce, platforms like Facebook can reduce friction and provide faster, simpler engagement experiences.

ASB and Alior Bank have integrated Facebook into their P2P payments capability

This is why we’re seeing an increase in the use of Facebook in the banking experience. This week alone both Alior bank in Poland, and ASB Bank in New Zealand have opted to utilize the Facebook platform to enhance and simplify P2P payments. Apps like Chase QuickPay, and Barclays PingIt already allow you to send to a friend via an email address or mobile phone number, so why not send to a Facebook friend that you can simply select from your friends list. PayPal was one of the first to integrate this into their platform, and we see only benefits in smart integration of Facebook into the customer experience.

Facebook adds huge value to the customer experience in being able to simplify and fast-track day-to-day financial interactions between people and businesses. The benefits outweigh the risks, in fact, use of Facebook can reduce risk of fraud if done right.

Respect the crowd – don't shut them out

Well, I see the Facebook/Twitter hysteria is at fever pitch again. There’s the concern around market events like the fake Sina Weibo post stating that Kim Jong Un had been assasinated, apparently corroborated by the evidence of a cavalcade of black limosuines arriving at the North Korean embassy in Beijing around the same time. This started in China on Weibo, and within minutes had been translated into a fast trending topic on Twitter.

To be fair, while everyone is crying foul of Twitter and social networks for the potential chaos they could cause with false reports, the reality is Twitter and microblogging sites like Weibo get it right far more often than they get it wrong. This same week Twitter broke the news of Whittney Houston’s death a full 45 minutes before the press picked it up, just as it had with the death of Michael Jackson and Osama Bin Laden. The fact is, Twitter is more likely to break major news first, than any TV network these days. The unique aspect of Twitter is not only that it breaks the news first, but it allows a dialog around that news – so people feel not like they’re are just watching the news, but that they are a part of it – living it, participating.

Twitter doesn’t get it wrong all that often. Keep in mind Twitter users now send 1 Billion Tweets every 4 days. The instances of Twitter getting news like Kim Jong Un wrong, is miniscule in that stream.

If you are arguing caution on Twitter, it is like suggesting you don’t watch TV or read Newspapers because 1 in 10,000 stories could need a fact check.

Respect the medium’s power – the flow will continue with or without you. Fearmongering over minor hiccups will only distance you from those you must seek to engage.

Westpac’s miscalculation

Then we have Westpac’s attempt to filter or censor the crowd’s backlash at their mortgage rate hike. The primary criticism came as a result of the fact that Westpac raised mortgage rates ahead of any move by the Reserve Bank, ANZ quickly followed, as did Comm Bank and NAB later in the week. The issue is not the rate hike per se, but Westpac’s response to criticism by customers.

If you haven’t yet figured out how social media works, it’s about time that someone clears the air. Social Media platforms like Facebook, are not about spin, control or nuancing an audience. Despite what you might think, Westpac’s Facebook page is not owned by Westpac. It is a community forum to discuss the brand, on a platform hosted by a neutral third-party – Facebook.

While Westpac thought that this might have been a safe option (getting rid of the negative comments from irate customers) the fact is they just made the situation worse.

It was as if customers were ringing the call centre or walking into a branch and voicing their disatsifaction with the rate hike decision, and Westpac was hanging up on them mid-sentance, or worse, ejecting them from the branch forceably for not being nice to Westpac in their hour of greed. That’s how customers see it.

The dialog is an opportunity – take it

If you are going to be a brand living in the world of hyperconnectivity today, you can’t think like you used to think 10 years ago in respect to communications strategy.

Westpac had an opportunity to discuss their rationale on the rate hike in an open forum and accept that customers were not happy with the increase. Half the time when you get irate responses, people are simply looking for validation, for their complaint to be heard, to be recognized. If you can address their problem, then they’re generally delighted. That’s how you earn the trust of digital natives – you engage them and you validate their voice. What you don’t do, is cut them off at the knees if they don’t agree with your spin or brand positioning.

Citibank took an entirely different approach to the dialog opportunity. They were the first global financial institution to get Twitter accounts and start actively seeking support and dialog opportunities. When they launched their iPad App back in August, they even integrated Twitter into the App for customer support.

Right now we’re seeing a shift in customer sentiment and the way Y-Gen consumers select financial institutions, this is bleeding over into other segments as well. Brand’s need strong advocacy to remain relevant in this new dialog space, but you won’t get that advocacy if you don’t provide the respect to your customers that they expect and deserve in the transparent, social space.

That’s what Westpac got wrong. By trying to filter or censor the Facebook stream, they thought they were conducting damage control in the old marketing/communications sense of the word. Instead, they increased their risk of brand pushback and negative sentiment exponentially. A much tougher and longer term issue to deal with.

Respect the crowd – they have enormous power and will be the future of your brand. Understand that the crowd can advocate your brand, that they can be a massive resource. Push them away, and you may never again get their trust.

Talk to them, even when you screw up, and they’ll respect your openness and willingness to improve, adapt and engage.

I'll never login with Facebook to my bank!

We’re experiencing a massive shift in consumer behavior right now with the explosion of Facebook, Twitter, YouTube, and other community collaboration and social media platforms. A world where Facebook has 800 million inhabitants and a President who is a college dropout (albeit Harvard).

We’re seeing the global domination of mobile across the entire world, where before long every person on the planet will have a mobile phone – and soon that phone will be a wallet. Smartphone owners will be the majority in just a few years as smartphones are virtually free on contract, and unlimited data is bundled free. Already the average smartphone user spends more time using Apps than they do using an Internet browser on their computer.

The traditional players amongst us say that such things don’t really change the fundamentals, that “it will take time for people to trust these new mechanisms”.

I’ll never login with Facebook to my bank.

I won’t pay with my mobile phone unless I understand how secure it is. This NFC technology is too new and there’s no common standard.


The same people who said this probably said…

I’ll never use email, there’s nothing like calling someone or a face-to-face discussion to solve a problem

I’ll never use an ATM machine, I don’t trust a machine to give me money.

I’ll never get a cell phone – I don’t want people to be able to call me whenever and wherever I am.

I will never put my credit card details on a website online – are you crazy?

I’ll never bank online. Not in my lifetime…

I’ll never need a Facebook account – it’s a waste of time, it’s just for college students.


If you are saying you won’t do something that millions of other people are already doing, that’s a sure sign that it’s going to disrupt the hell out of your business and you’re in trouble.

If you’re not planning to work differently, if you’re not thinking differently, then you’re just out of touch, you’re just one step away from irrelevance. You’re fighting the flow upstream and getting pushed towards disaster.

The one constant of the internet-enabled world is that you have to be ready to change constantly. Resistence is not only futile, it’s stupid and very costly in the long run. It’s cheap and easy to be social right now, same for mobile – it won’t be in the future.

Right now you have two choices.

Start experimenting with how to adapt to these new methods

Start figuring out what people want to talk about on social media. When they’re using their phones at a store, for searching on products, when they check-in, tweet or update their facebook status.

Start talking to them. Start sharing content that isn’t marketing messages pushed down their throat, but helps them.

Start trusting consumers to talk to you about your brand, your products and about what they want from their bank or services provider. Understand you can’t control the conversation, but you can and should participate in it.

Open up new products and services based on social media. Get consumers to give voice to their needs and help you form those ideas. OCBC, DBS, First Direct, ASB, Comm Bank are all trying different types of crowdsourcing to develop better relationships with their customer base.

OR… Ignore the obvious, get ready to be displaced

Our customers don’t feel safe using Facebook for login!

But some of them might… how long before most of them will? How do you meet your KYC requirements and keep customers safe when allowing them to do this? Are you going to wait till everyone else is doing it, or are you going to learn how to do it properly and securely now. Are you asking your compliance teams to find ways of figuring out how to do this stuff safely?

It will take years for the mobile wallet and NFC to take off!

Right now Google and Apple are eating your lunch and you don’t even know it. You are getting ready to write off the one device that is most critical for connections and context with your customers in the later part of this decade. Someone else is going to own your customers, and as banks we’re going to be paying the likes of Google to include our branded card in their wallet, or our products and services and messages on their platform.

We already have to ask permission from Google and Apple to give our customers our App.

Don’t want to change! You will…

The fact is most of the last two decades we’ve been facing constant change, and no one organization has been able to resist the shift because customers decide how and when you’ll engage with them.

Customers have already decided they want their mobile device to be their bank. They’ve already decided that they want to discuss your brand and your service capability in the open community of social media.

Now it’s time for you to decide that you want to stay relevant to your customers. Or ignore the obvious and go away.

Who's easier to save, a banker or a dictator?

Bankers often talk about the ‘trust’ consumers have in banking as a defining characteristic of why customers give banks their money instead of simply keeping it under a mattress. Some bankers might have difficulty understanding why customers of today seem perfectly happy to give money to the likes of PayPal, M-PESA, Lending Club or Zopa. The fact that I trust PayPal to send money on my behalf, in lieu of banks, might have been unthinkable just a few years ago. The concept of lending money through a social network would have seemed laughable too. Part of this is that we just don’t trust banks like we used to, and alternatives seem far less risky comparatively.

Reputational risk is surfacing in the sector as a whole today through social movements like “Occupy Wall Street”, “Bank Transfer Day” and other actions led by frustrated consumer groups and collectives. As an industry, we’re not organizing a structured approach to this challenged perception of ‘banking’. Instead we’re often trying to defend the indefenisble, a system saddled by inertia that assumes we have far greater responsibility to our shareholders, than we do to the customers we are supposed to serve.

Not the Regulator’s problem

At the European Retail Banking Summit held in London on November 8th, 2011, I pitched to European regulators the issue of Social Media, the Occupy Movement and what their position was towards the increased transparency that retail banks were facing. Martin Merlin (Head of Financial Services Policy and Relations with the Council, European Commission) and Philip Reading (Director, Financial Markets Stability and Bank Inspections, Oesterreichische Nationalbank) were at a loss to understand the role of regulators in defining a coordinated industry response. Martin’s response was telling:

“It’s simply not on our radar yet as regulators”
Martin Merlin, Head of Financial Services Policy, European Commission

Customers finding their voice

The new voice of the populace is demonstrated with no greater effect than through the so-called “Arab Spring” across the MENA region. If Twitter, YouTube and Facebook can overturn regimes in Egypt, Tunisia and Libya, I’m pretty sure they can totally undermine the brand of a bank that we’ve previously thought was “Too Big To Fail”.

To add credibility to that notion, in just months we have seen the Occupy Movement develop into a global protest against the economic and social inequality promoted by the current “system”. Consumers today have found their voice. Increasingly that voice is about choice, about rewarding organizations that listen and punishing those that think their decisions are immune from public debate or dialogue.

Prior to social media, the thought of rapid political change in a country like Egypt would have been considered extremely unlikely, a real outlier. Is there a measurable effect of this voice of the consumer on retail financial institutions today? Absolutely.

In January 2011, Bank of America’s (BofA) post financial crisis share price had recovered to $15.31 at its peak. As of this blog post, BofA’s stock is ranging at $5-5.50. This is instructive. Stocks with a historical Beta (β) of 1 are generally tracking flat for the year. So why has BofA lost more than 50% of its value in the last 12 months, compared with a market and contemporaries that have remained flat over the same period?

Bank of America’s share price is at a 2-year low

Overlaying stock trading volumes and pricing, against average and cumulative sentiment (via social media analysis) shows that public displeasure with the company direction and engagement has been a core driver in BofA’s troubles. What is clear is that BofA would not have considered consumer sentiment a significant driver in their share price in the past. They simply could not have run their retail bank badly enough to result in this type of dip in the past unless there was some sort of significant and very public scandal resulting in massive losses. The market is obviously now pricing in concern about the long-term viability of a brand that doesn’t have affinity with the consumers it serves.

A great infographic from EvoApp showing the correlation between sentiment and share price for BofA

What to do next?

Understanding consumer sentiment, and actively managing the brand in this open dialog is going to be a key skill in the near term. This is not about ‘spin’ or control, because as Egypt and the Occupy Movement has shown, you can’t control these forces.

Instead what will be critical is the capability to respond visibly to the markets concern, to improve sentiment. In BofA’s case, the leveraging new Debit Card fees, claiming BofA had a “right to make a profit” and then dropping the planned fees – is no way to demonstrate strategic understanding of consumer sentiment in the social age.

We need a lens on sentiment that drives strategy. This requires a very different board room and executive feedback loop that simply does not exist today.

The Modality Shift of Banking – Part 5

Transparency challenges new revenue and friction

In September of 2009 Ann Minch, a customer of Bank of America, posted a video on YouTube called the “Debtor’s Revolt”. Ann detailed her case against BofA who had unilaterally increased her credit card APR (Annual Percentage Rate) to 30% from its historical 12.99% – quite a jump. She argued as a customer of 14 years, having never missed a payment, that such treatment was unjustified.  She contacted BofA and asked if they would discuss her situation or negotiate the rate change, but they referred her to a debt consolidation counselor.

BofA subsequently argued that the terms and conditions she had signed allowed them to make any adjustments of this nature without consultation with customers like Minch. If she didn’t like it, she was free to cancel her card and go to another bank. This wasn’t the end of the story.

Half a Million YouTube views later mainstream media started to pick up Ann Minch’s story. The pressure was suddenly on BofA to explain their actions, and the story that they were within their legal right to do so, just didn’t stand up to cross examination. All but BofA believed that their actions were unreasonable and extreme. The resultant pressure resulted in a complete reversal of BofA’s decision, a win for Ann Minch right?

Transparency wins

The Ann Minch story, and that of David Carroll with his YouTube-generated hit United Breaks Guitars, tells us that today consumers have extraordinary power afforded to them through social media. Consumers today have a voice, but increasingly that voice is becoming about choice, about rewarding organizations that listen to customers, and punishing those that think their decisions are immune from debate or dialogue. Prior to social media, Ann Minch wouldn’t have had a hope of getting a behemoth like BofA to change their policies or decisions based on her complaint. But it’s not just the voice of consumers on Twitter, Facebook, Google+ or social media more broadly.

A plethora of user driven recommendation apps and tools are coming to the fore in helping consumers choose organizations that respect customer involvement. There’s Nosh and Yelp apps that help consumers choose restaurants that they like, that provide great service or great food. There’s Trip Advisor that has become such a powerful force in the travel game that it gets 50 million unique visitors a month who use the site to select hotels for their family vacations. Then there are staples like iTunes and Amazon (who arguably pioneered the consumer product rating mechanism) who rank listings of their products based on consumer votes and reviews.  Today we’ve seen the launch of First Direct’s new FD Lab as a worthy attempt to engage customers in the future of the bank from a service and product perspective.

First Direct, who already has great customer advocacy, has launched a new crowdsourcing platform for engagement

Outdated processes are just friction

Today we live in a world where you can no longer provide poor service based on outdated rules, processes and policies and argue “hey, were a bank and that is the way we do it”. Today, if you are a bank and you have stupid rules and regulations that have been perpetuated by processes built around unwieldy mainframe transaction systems, or around KYC processes that are overkill for 95% of customers and their day-to-day interactions – you are setting yourself up for a fall.

Banking has been for the longest time built on the premise that you have to jump through a bunch of hoops to make yourself ‘worthy’ as a customer – you have to prove yourself before the bank will deem you suitable. As bankers, we argue that it’s not our fault, that we are saddled with regulations and requirements that force our hand, that require us to approach customer engagement in this way.

That kind of thinking is institutional laziness and denial – it creates friction that frustrates customers, is largely unnecessary and is generally costly and inefficient.

Let me illustrate. Take a long-term customer that walks into a branch (for the moment forget my post last week on the decline in branch visitation :)) and applies for a credit card or investment class product after say 10 years of a relationship with the institution. In by far the majority of cases he or she’s sat down in front of an officer of the bank, handed a blank application form and required to fill out details that the bank has had on record for a decade. Why?

There is no process, rule or regulation that can possibly justify that kind of inefficiency and poor service. If there is a requirement to get a signed consent or legal record of the customer’s acceptance of certain terms and conditions, then print out the required document with all his/her details pre-filled, ask them to initial to confirm their details have not changed, and sign the acceptance of the T&Cs. What is so hard about that?

Recently at my annual review with my relationship manager at a major brand bank, I was subjected to a 7 minute video on the risks of investing in Collateralized Debt Obligations (CDOs) and the fact that I might lose all my money if I invest in this asset class, when I was, in fact, applying for a product that was a low-risk Corporate Bond in a totally unrelated asset class. Why the video then? Because someone in legal and risk decided all customers should sit through this video to reduce risk to the bank. Stupid friction.

Take a customer who forgets his Internet Banking password today. How many banks require him to come to the branch or sign a convoluted document and fax it to the bank to unlock his online account? I know at least two of my bank relationships do.

Take a wealthy HNWI (High-Net Worth) customer that moves to the USA or UK from a foreign country and applies for a credit card, only to be rejected because he has no credit score – therefore doesn’t exist in the system so he can’t be assessed from a credit worthiness perspective.

None of these rules makes sense, and yet banking is choc-a-block full of such friction and opportunities for disenfranchising customers.  This is the perfect storm in today’s user advocated consumer world of open, transparent choice.

Friction kills advocacy

The problem with outdated rules, processes and procedures is that thinking “we’ve always done it this way” or “if you don’t like it you can leave” is simply no longer a viable argument to an increasingly well educated and informed customer. Already we’re starting to see customer advocacy as a key driver in choice of financial institution, and high visibility for customers who voice their dissatisfaction with such friction.

Have a look at a few sample tweets in recent weeks:

@DavidBThomas I’ve been with my bank for 30 years. They “thank” me by telemarketing me at dinnertime.
@NewsCut My bank — TCF — has a security question “What city is your vacation home in?” My bank really doesn’t understand REAL America.
@StevenValentino I hate my bank and I would happily shove what little money I have into my mattress if the FDIC would insure it.
@MadRainbowLtd Halifax bank are sh*t! They let someone clear out my bank account using an old cancelled debit card!
@clarecbarry Bank screwed up appointment for third time. Quite impressive. Now on way to work with meeting with Mr Douchebag

And this wonderful series of Tweets from @docbaty on 29 July

@docbaty Things my bank did wrong today:
1) that it would take two weeks to perform a simple account creation;
@docbaty 2) offered to expedite that process, which means it -can- happen faster, but they’re just not trying;
@docbaty 3) asked me if I banked with Bank Y at all; they do the same thing while you wait…
@docbaty 4) gave me a blank form to complete in sign, when every piece of info – other than signature – is already on file…
@docbaty 5) made an error on the processing fee, charging $2,180 instead of $218. I had to correct their calculations (she’d used a calculator)
@docbaty 6) checked new calculations with manager, while making me wait.
@docbaty 7) failed to apologize.

Now imagine the next generation of customers who are out there looking for a new institution to engage with right now. Where are they going to look before they decide on a life-long relationship with a financial institution? They’re going to ask their peers. They will search on a product or brand and find search engine results prioritized, not by some clever search-engine-optimization techniques, but by how their friends and networks have scored the performance of that bank or credit union. They’re going to ask for recommendations on Facebook, Twitter or Google Plus, and they’re increasingly going to choose new providers who think out of the box and who work on simplicity, great customer journeys and improving customer experience through better interactions.

What used to happen informally now is being hardwired into the brand selection process. What marketers used to call the ‘choice set’. We’re learning that this process can’t be gamed, manipulated or bought as a result of ad spend. We’re learning that the most effective mechanism is simply being great service businesses and listening to customers when they’re not happy. The process is brutal, it’s transparent, and it’s going to kill your brand unless you are honestly engaging customers, and you try your hardest to get rid of those pesky, stupid banking rules that only make sense to us as the bank – and even then, let’s be honest… they don’t really make sense to us either.

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