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Vito Labellarte

Additional Pricing Strategy Discussion

By Mark's Minutes

Last week we discussed the impact of the Fed’s move on pricing strategy. We also started with the assumption that organizations are likely in the latter stages of dealing with this dilemma.

We learned that we (as individuals and organizations), go through several phases when a change (or major life event) occurs:

Shock – We aren’t ready for the change; it’s a surprise.
Fear – We are now afraid of what this may mean to our world; we are scared.
Acceptance – We’ve come to accept that now this new set of conditions is going to remain
Transformation – Now that we have accepted these changes, we have to adjust our perspective to fit this new reality.

Everybody goes through these phases at different speeds. And so does an organization.

I believe that most organizations have gone through the acceptance phase but are still struggling with the transformation stage. But this is exactly where we need to be heading – to explore a new way of pricing that is more dynamic than what we have historically relied upon.

In a recent article in Financial Brand, they discussed key strategies to optimize your pricing strategy in these times. It’s worth sharing:

Savvy financial institutions around the world are experimenting with unconventional inputs to create pricing models that allow them to stand out in their market and appeal to the customers they want to serve.

Here are just a few examples:

In the United States, a midsize credit union rewards long-term customers with more favorable loan and deposit pricing. Customer loyalty creates value for the credit union, and giving special rates to these individuals strengthens the overall relationship.
In Europe, a large retail bank calculates a relationship score by evaluating assets and liabilities across multiple customer accounts (retail, wealth, business, etc.). The resulting “value score” is used as a pricing attribute when they’re creating a rate sheet. We’ve also seen these scores used to impact fee waivers and cash back rewards.
In the U.K., a large commercial bank incorporates climate data into how it prices loans secured by real estate. So, for example, if a property is located in a floodplain, the loan would be priced to reflect the increased risk of operating a business in that location.

By moving away from one-size-fits-all pricing models, these financial institutions are capturing business that works well for them at a price they — and their customers — find attractive.

Now these ideas may not be exactly what you are looking for. However, the idea is not to necessarily copy somebody else’s plan, but to create your own.

Coming out of this most recent season shows everyone how inflexible and obsolete our current pricing methodologies are. There is room for improvement.

Can you use this as a backdrop to building a new approach for your organization? Now’s the time.

Thanks for joining me today!

Dealing with a “New Normal” in Interest Rates and Product Demand

By Mark's Minutes

Psychologist have tried to help us make sense of the way we deal with change. There are many different models of thought. One popular philosophy posits that we go through several phases when a change (or major life event) occurs:

Shock – We aren’t ready for the change; it’s a surprise.
Fear – We are now afraid of what this may mean to our world; we are scared.
Acceptance – We’ve come to accept that now this new set of conditions is going to remain.
Transformation – Now that we have accepted these changes, we have to adjust our perspective to fit this new reality.

Everybody goes through these phases at different speeds. And so does an organization.

Organization Changes in Response to Industry Changes and Pricing

The past 12 months seem to be one of adjustment and transition. Starting last year, the Fed began moving up the interest rate. At first it was a shock. There were small increases where there hadn’t been any for years. It was still too early to understand. But then the spigot opened, and the Fed continued to increase rates to a level not seen in years.

Fear creeped in and most institutions early on started to pull back promotional programs. The worry was of the unknown – were these rates going to continue going up, level off, or go down? Will we be competitive? Can we take some extra profit on the deposits we are keeping at these very low rates, or do we ride the rates up with the market and increase our market share?

Or we do nothing.

Now What?

Today, I believe much of the industry is in the acceptance phase. There is an understanding of what is happening, and the short-term effect. Most institutions have adjusted rates to meet the new levels. But there still seems to be a “pulling back” and a relaxation on outbound marketing and promotion.

Without marketing, the organization will shrink and lose potential share. We have been playing defense. It’s now time to go on the offense.

Transformation – Now is the Time.

It’s time to get your organization out of the acceptance phase and into the transformation phase. Embrace a forward-facing look.

What does transformation look like to you? It could be many of the following:

• Adjusting pricing in line with new realities
• Building new products and categories that reflect current pricing and market demand
• Adjustment of staff focus to line up with changing consumer needs and new realities
• Add/subtraction of staff/personnel in conjunction with changes in workload and overall demand
• Protecting your market share with confident advertising messaging and aspirational positioning

Until you get into the transformation zone and move forward, everything will still feel like a crisis.

The biggest danger is being comfortable staying where you are (in the acceptance zone), “waiting to see what happens next.” Or, hoping things will go back to the way it was. It never does.

In the meantime, others may be eating your lunch.

So you want to attract younger consumers?

By Mark's Minutes

The lifeblood of any business is the attraction of new users to its base. This is because there will always be a natural attrition taking place. People move, change circumstances, and unfortunately die. Regardless, if you’re not fully invested in developing new relationships to offset these changes, your organization will suffer. It will die.

What changes are you willing to make?

Remember the saying, “if we keep doing the things we’ve always done, we’ll get the results we’ve always gotten.” Nothing could be more true with appealing to a younger demographic. We talk to many institutions that have this goal yet they go about it the wrong way. Somehow, they believe that just by “marketing” (think advertising/communication) to that group, people will flock to their business.

It’s not that easy.

To appeal to the youthful demographic, you must be relevant, become part of their consideration set, and have credibility with these consumers.

What the young consumer wants – Technology

Younger generations want emerging technology seamlessly integrated into their daily banking experience. Furthermore, they’ve come to expect a consistent, user-friendly experience with any touchpoint they have with you. Many are also demanding flexibility that adapts to their lifestyle, from access to digital services as well as brick-and-mortar locations to multiple channels where users can communicate with the institution (in-app support, virtual assistants and more). Source Forbes, Financial Brand

A Digital First strategy resonates well with these users. Their world is digital, and you have to create the experience that fits with their desires, not yours.

According to Forbes, just adopting the technology won’t be enough. Digitizing experiences will not drive growth by itself—fine-tuning the digital experience through innovation, personalization and continuously new approaches will be necessary to keep younger audiences engaged.

What the young consumer wants – Advice

The young consumer finds the financial landscape challenging. They don’t understand it and know they need help. At the same time, their comfort with digital over human interaction may make them harder to connect with.

Develop programs such as webinars and seminars on topics in line with their interests. Encourage them to suggest areas that can be helpful. Build an ongoing repository of support in line with their general needs. Financial planning is a major issue that many young consumers need advice and encouragement.

What the young consumer wants – Relevancy and Respect

Every generation wants to be acknowledged for who they are and their uniqueness. It’s easy for an established institution to overlook this important component. If a new, younger consumer doesn’t feel comfortable in the relationship, they will move on.

Some of the simple, yet important elements of serving this segment is to ensure you have staff that represents this group. Having staff from this age group allows you to showcase that you value these groups and have trained staff that can handle their needs.

Create a team from the younger employees with the goal of evaluating and challenging all the current service practices and procedures. Things that have “been done a certain way for years” may no longer be relevant. And, will likely serve to push younger consumers away.

Remember it’s a journey.

A healthy organization is going to allow some flexibility as they bend and adjust to various societal and demographic changes. Staff should be as comfortable explaining what a savings account is used for to a young consumer and comparing investment options for an older consumer.

There is no one size fits all.

The Promise of Personalization Part II

By Mark's Minutes

Last week we talked about what people wanted from their financial institution. As a refresher, this is the response that consumers gave. According to a study by Boston Consulting Group, the typical banking customer answers the following question in this manner:

“I want my bank (or credit union) to be more like:
I know what I need by I’m open to some relevant automated feedback.

A Personal Shopper……..29%
I know I need something, I just don’t know where to start.

A Supermarket……..16%
I know what I need, and I know it will have it.

My Doctor/Dentist……..11%
I don’t enjoy going, but I know I need to go regularly for important help.

My Gym……..6%
I want it to be an important part of my regular routine.

Delivering on the Consumer’s Demands

You can’t be all things to all people so you must decide in advance the areas that you can actually deliver. As with any product or service, you need to know YOUR market and their specific demands. McDonalds does not try to sell Rib Eye steaks. It’s just not a fit.

Just because somebody may want the above, serving each segment is going to result in some compromises for some and benefits for others. Your goal is to be certain to “optimize” the choices in line with your capabilities.

The Survey Decoded>

I interpret the results above translated to the consumer behavior as follows:

The Amazon Shopper – They know what they want. To win their business, you will need to have a robust commitment to technology, a category-leading investment in Fin-tech. An organization like this is a “digital first” company with heavy investment in tools, talents and technology.

The Personal Shopper – This might be classified as a “high touch” or “personal banker” strategy. Contrary to the Amazon experience, more emphasis needs to be placed on the “people” side of the equation. That translates into more staff, consistent and in depth training on all facets of the finance equation. Employees must recognize how to read the consumer’s needs.

The Supermarket – These consumers are likely less concerned about their choices. They may be less brand loyal and are comfortable buying a CD from anyone. This is likely a price-oriented shopper and would require aggressive pricing strategies to maintain their business.

Doctor/Dentist – This is the loyal consumer that respects the relationships and wants to be serviced effectively when they do come in. More financial planning and investment counseling support may be in line with the expectations of this consumer.

My Gym – This could be a combination of many different approaches since this implies a regular focus on financial wellness. What could benefit this consumer? Financial training classes, events and other educational efforts to keep these consumers operating at their peak. The move toward in-branch coffee bars plays into this strategy.

Remember, you can’t be all things to all people. It’s best to understand your user base and/or the consumers you want to attract and build the right solution for them. Always keep in mind what the competitive landscape is going to be offering as well. The financial industry operates in a sea of sameness, so do your best to stand out in your own unique and relevant way.

The Promise of Personalization

By Mark's Minutes

Financial institutions have sought to personalize the banking experience since data first became available. In my first job in financial services about 35 years ago we began to incorporate personalization into our marketing and our planning.

Geographic Personalization

We used it at a basic level based with the information we had available. Our first major implementation of highly personalized marketing came in the form of our planning tools. We incorporated basic philosophies from the book, “The Clustering of America.” It had just been published and it used the best data at the time to create buying segments. The notion was that birds of a feather flock together, and that where you lived implied certain buying behaviors.

You might call them “personas” today. There were 40 different segments that we applied to our branch system and then built goals for each branch based on the market characteristics that each branch competed within. For instance, we’d expect an area with an older population to have higher demand for rate-sensitive savings product and younger populations demanding higher loan purchases in general.

With the growth of transactions increasing outside of the branch environment, how do you effectively target users and allocate the right opportunities to your company?

What People Want Today

According to a study by Boston Consulting Group, the typical banking customer answers the following question in this manner:

“I want my bank (or credit union) to be more like:
I know what I need by I’m open to some relevant automated feedback.

A Personal Shopper……..29%
I know I need something, I just don’t know where to start.

A Supermarket……..16%
I know what I need, and I know it will have it.

My Doctor/Dentist……..11%
I don’t enjoy going, but I know I need to go regularly for important help.

My Gym……..6%
I want it to be an important part of my regular routine.

With such a wide range of buyer expectations, knowing which users personify the various mindsets is really the first step to creating some form of personalized service. What the use of delivering a hyper-personalized service to someone that doesn’t want it?

The Journey of Personalization

We know that banking services are saturated and hyper-competitive. Moving towards a more personalized experience is the goal to create higher engagement, lower attrition, stronger loyalty and becoming that “top of wallet” provider.

The path isn’t the same for everyone and yours should be created in line with your account-holders goals, and expectations, matched up against your ability to deliver the operational horsepower necessary when and where they need it.

Your decisions and actions are data dependent. Strive to know what your users want and need before creating a process that may actually push people away.

Assumptions can be dangerous.

I remember once receiving some information sent to me in Spanish from a large institution. I don’t speak Spanish, but they thought that since I have a “De” in my last name, I probably was. Their attempts to personalize actually resulted in a loss of credibility and a weaker relationship.

Jingle all the way?

By Mark's Minutes

When to use a jingle in your marketing.

Jingles were the rage in the heydays of radio and TV advertising. Once sound was introduced into moving pictures and TV, the jingle was creative as a way to trigger a quick response in the mind of the consumer.

The Psychology of Jingles – the “Earworm”

Psychologists and neurologists who study the effects of music on the brain explain studies have shown music effects the brain on an emotional level – thus, music with a strong emotional connection to the listener is harder to forget.

It is for this reason that professional marketers often use popular music in advertising as a type of jingle. Just like original jingles, pop music often contain earworms– the easy to remember melody or tone that people will associate with a brand for years to come – similar to your average jingle. Earworms are those tiny, 15- to 30-second pieces of music that you can’t get out of your head no matter how hard you try.

The truth is that psychologists and neurologists don’t know the exact cause of earworms, but suspect it is the melody’s repetition that is at work on neural circuits within the human brain. Research found that shorter, simpler melodies were most easily stuck in human minds, creating earworms. Research has also shown earworms are more prevalent in women, as well as musicians. (source: The Barnes Firm)

Jingles are effective in advertising for many reasons

According to Score a Score, jingles still remain relevant even though Media consumption patterns have changed significantly. Fewer people now rely on radio and TV as their primary sources of information. More people rely on various platforms on the internet to get information. Also, there is a significant increase in on-demand media consumption.

According to a Quality Logo survey, 63.1% of people watch jingles on TV, streaming platforms such as YouTube and Hulu being the second most popular media for jingles while Radio jingles are now third on the list.

People also watch jingles as pop-up ads on websites and browsers, music streaming platforms such as Spotify and Pandora, on gaming apps, as well as in-app ads.

One of the top benefits of jingle marketing is that it can be used across the board on various electronic media. If your jingle is interesting enough, it can be shared and viewed by millions, which broadens your brand reach and awareness.

You can even send your jingle in a sound chip via direct mail!

Is creating and using a Jingle the right approach for your brand?

It all depends on three things:

1. The story you are telling.
2. How uniquely you can position yourself using your jingle.
3. Does your media choice and budget allow you to spend enough to build the type of recall and awareness using your jingle?

It all starts with the right “slogan”

This looks like a fun site where you can create your own slogans:

Is Your Creative Design “Creative”?

By Mark's Minutes

Using Design as a Strategic Advantage

So many of the marketing decisions these days have become formulaic. With our reliance on data driven decisions and click through activities I wonder sometimes if we have lost our overall sense of creativity?

Has creative design become a process that we just “go through the motions?” Or do we give the creative development our full attention and best work?

Some Historical Context of Creative Design

Years ago, when print and broadcast marketing ruled the industry, the creative process was painstaking and thorough. Check out an episode from MadMen for a look inside the Ad Agency business as it was in the 60’s.

It might take weeks or months of going back and forth with multiple comp ideas and then refining again and again until the concept was perfect. Only then would the project move ahead.

Why was it so seemingly painfully slow? I believe two reasons: 1) They worked hard to get it right the first time and 2) Once created, you can’t “fix” bad creative. You can’t “unprint” a magazine ad or revise a broadcast spot without large expense and a huge loss of time.

Does Technology Inadvertently Encourage Mediocre Advertising?

Today’s digital tools make it much easier to modify creative in almost real time. An ad that isn’t pulling can be redesigned and uploaded potentially within hours. And that’s where my concern rests. The ease of “fixing” bad advertising might inadvertently lead to the creation of mediocre advertising in the first place.

We should always start with the goal of creating the very best concept we can, given the resources we have (budget, people and time usually being the biggest challenges).

A Helpful Checklist for Great Creative

I googled “Creative Advertising Checklist” and receive over 10 million hits. Everybody has their favorite list. Here’s mine:

1. Relevance to the Target Market – Does it “speak” to the right people?

2. Celebrate the product – The product or service should be the hero

3. Make it memorable – Appeal to those emotions that encourage your buyers to interact or see themselves using your product

4. Make it easy to take action

5. Support the overall brand and company positioning

Make sure to allow yourself time to brainstorm multiple options as well as adequate time for refining the concept and exploring multiple ways of delivering the product benefits.

Design as a Strategic Advantage

As impressions of your work grow, your brand and product will be elevated in the marketplace. Consistency in delivering high quality work becomes a hallmark of the company and is part of your overall brand promise.

Don’t short cut the process as it may create inadvertent mistakes or miscues that backfire.

The Use of Artificial Intelligence in Marketing Services

By Mark's Minutes

How could any Marketing Manager resist the temptation of the promise of AI? Like any new technology, we are quickly beginning to understand the power inherent with this new tool.

Much has been discussed about the societal opportunities and threats but what about those that could impact YOU, the communicator bent on leveraging AI to make your job easier, more efficient, or more effective?

Legal and Moral Implications

Yesterday I read a full page advertisement from a local law firm that may be establishing themselves as a resource for AI related issues. Falcon, Rappaport & Berkman have offices throughout the US in major metro areas.

Their advertisement provides some good perspective of the potential issues that can develop through inappropriate, careless, and/or malicious use of information. As their ad says, “the ability to construct a commanding brand presence and thought leadership by instantly generating on-point articles as needed,” is alluring to everyone in a fast-paced, competitive environment.

AI may serve up information to you. However, you will own the action and activity associated with the usage and may have to vouch for its credibility.

Potential AI Landmines

The premise from the law firm is sound and serves as a basic foundation for evaluating all information that is going to be distributed to the masses. Some of these you may (should) already be doing. Others should be worthy of your attention:

• Industry Data Confidentiality – Some of the data that comes back may have been sourced from confidential areas. Be mindful of any state or federal regulations that may impact the data you are acquiring. Something may be legal in one state and not another for instance.

• Intellectual Property Protection – You may unknowingly use copyright material which may potentially be subject to litigation. You can still be held liable if you didn’t know you were using copyright material. Published materials, photos, lyrics, stories and other intellectual property may inadvertently be scooped up in an AI data dump.

According to the US Copyright Office, AI generated content cannot be copyrighted. You can’t assign a copyright to the materials you have created from AI.

• Personal and Private Information – As AI scours all corners of the internet to capture data on individuals, be sure to eliminate any of the information that may fall into a protected category. The list of protections is increasing, and the scope of these protections vary by state and country.

How to Protect Yourself

Be mindful of the data you are pulling and be careful to review and synthesize everything that you personally use. Avoid wading into controversial areas with third party data you have secured from broad sources.

Talk to your company about whether a policy should be created around the use of this data. This is important to establish any ground rules that are created in light of your business parameters or sensitivities.

This technology is moving very fast and mistakes are bound to happen. Hopefully, you won’t become a victim.

Using Patriotic Themes in Your Advertising

By Mark's Minutes

We are just coming off a Memorial Day weekend. With this holiday comes the ever-present tie in to the patriotism that we naturally feel around these days. Advertisers hope that we will feel an affinity towards the brands that use patriotic messaging to invoke stronger sentiment towards their products.

Certain products have always been part of a Memorial Day advertising campaign – Picnic items, beverages, home improvement, barbeques and those activities associated with the advent of Summer.

How Effective is Patriotic Advertising?

With Memorial Day in the rearview mirror and the Fourth of July ahead, now is a good time to assess whether you should consider using patriotic themes in your future advertising or messaging.

According to Thunderfoot, advertising using a patriotism theme can be a powerful strategy.

“Great advertising relies upon effective design and language to forge bonds between a brand and its customers. By integrating patriotic imagery into their ads, American brands create a connection for consumers between their product and all the commonly cited virtues of the good old US of A — freedom, determination, and originality among them. Referencing American iconography typically suggests a brand’s honor and integrity, and helps stoke consumers’ loyalty to that brand by touting qualities that consumers can feel good about supporting.”

When not to use Patriotic Advertising

Generally speaking, patriotic advertising works for many brands or situations. However, there might be times when it doesn’t fit and can actually damage your brand. Here are a few examples of poorly executed patriotic advertising:

1. When the advertisement is promoting an inappropriate patriotic connection to the brand.
“Nothing says Memorial Day like Fresh Baked Bread”
Probably nobody ever has said this and therefore it shouldn’t be said. The brand comes off as out of touch.

2. When the usage of patriotism seems gratuitous.
An example of this might be a swimsuit commercial where there are flags all around the pool trying to make a connection to patriotism that would rarely exist in real life.

3. When you create an emotional patriotic event that inadvertently works against your product.
An example might be showing fallen soldiers or families as a backdrop to your product. This is very risky as you could end up with consumers associating your product with a strong negative feeling.

Should you, or shouldn’t you?

The July 4th holiday is about a month away. As you plan for Summer promotions remember these tips. Importantly, make sure to maintain the respect and reverence we should always practice around this topic.

The Power of Personalization (within limits)

By Mark's Minutes

Is there anything more pleasant to one’s ear than to hear their own name? That’s why for years marketers have worked hard to integrate technology into their communication to make the consumer conversation more relevant.

At the most basic level, we want to feel like we are talking directly to the person. And they are listening to us. A true one-to-one dialogue.

How Much Personalization is Too Much?

With the growth of so much data warehousing and a seemingly endless source of “personal” information, the possibilities to customize messaging are many. But just because we can, should we?

According to Psychology Today (5/5/2021), surveys show that many consumers have reservations about targeted advertising that actually cause them to avoid such ads and resist their influence. Their review is published in the Journal of Consumer Psychology.

The research shows that personalized marketing may be effective, but can also backfire if not done correctly.

According to the study, the following issues were identified as causing consumer concerns.

1. Invasion of privacy. The most obvious way things backfire is when consumers believe marketers acquired or are using personal data they thought was or should be private.

2. Attempt at manipulation. It can backfire if consumers believe marketers are attempting to control or manipulate them in some way.

3. Unfair or stereotypic judgment. Rejection occurs when consumers view an ad as targeting them based on an unfair or stereotypic judgment about them, such as about their gender identity, age, race, or weight. Invasiveness, manipulation, and stereotyping should be avoided for obvious ethical reasons.

4. Already known content. This can make consumers tune out the message by signaling that they already know what marketers want to tell them (e.g., targeting superfans of a musician with well-publicized information about the musician’s upcoming album).

5. Weak arguments. Sometimes we believe that the consumer is interested in a product or topic and that is enough for them to engage. It backfires when the ad or message makes an unconvincing case to an interested user. This can probably be blamed on poor creative.

The key is to stay in your lane with respect to your product and its benefits. Respect the recipient and their desire for relevant, appropriate and helpful messaging. Use data that you are confident about.

Avoid politics, religion, and social topics as they can create a wedge between you and your customer.

Personalization Can Be Fun Too!

Don’t be afraid to have some fun and be playful too. Sometimes just knowing someone’s name is enough to solicit a smile.

Below are some examples of a campaign we are launching in conjunction with our trade show presence in Nashville at the MAC Conference this week. With our access to the attendee list, we were able to pre-print some great personalized concert poster souvenirs for each attendee.

And for those whose names we didn’t have, we created some “tongue in cheek” names to pick from.

Maybe one of these will end up in a real Nashville act!