Mark’s Minutes

If you wait until Halloween to start thinking about the Holiday season, you’ll miss the opportunity. That’s why major retailers are already displaying holiday items in their stores…right now. You can actually purchase your pre-lit Christmas tree today at Costco.

The Holiday period is traditionally seen as immediately following Halloween. From November 1 through December 26, you have the chance to build business opportunity for your organization and your consumers.

Holiday Marketing Opportunities

Holiday promotional themes are as timeless as the holidays themselves. In fact, The Financial Brand has reported on the major holiday promotional opportunities. It’s an extensive list but some our favorites include proven tactics such as Holiday Loans, Skip-a-Payment Promotions and Free Gift Wrapping.

Holiday Loan Campaigns

During this time of year, consumers are looking for that little extra to get them through the heavy shopping period. It’s a natural time to reach out with a lifeline for some extra funds.

We are fond of small loan amounts that can be presented in many ways including branch merchandising, direct mail letterchecks, email announcements and statement inserts. The key is to ensure that all consumers have a chance to participate at their appropriate lending level.

Here is a great example of a campaign we prepared for our client, University Credit Union: Instant Loan UCU.pdf

Skip-a-Pay Offers

Skip-a-pay loans have been popular for years. It’s a simple concept with big benefits. And it’s one that consumers appreciate. Especially during the holidays when things can be tight.

The concept is simple, and you can use with many types of accounts.

For instance, if you have an auto loan that you want to promote for your skip, simply allow the consumer to skip the next payment, and add that payment to the end of the loan. Some institutions add a small charge for the convenience which helps to offset the loss in the loan revenue.

An example might be a $600 car loan payment that you allow to skip for a $75 convenience fee. That $600 gets added at the back end of the loan so you haven’t lost it.

In most circumstances, this is a win for both you and your account holders as the small price they pay to skip a loan is a big benefit over the next payment they may have to make. That extra breathing room might be enough to help them avoid missing a payment and incurring late charges or start a downhill slide.

Gift Wrapping/Paper

How about a nice premium that brings people into your offices? Custom gift-wrapping paper and/or gift wrapping service allows you to generate some much needed face time with your consumers. It gives you a chance to help them with an important holiday chore, and reconnect with your staff and products.

Customized wrapping paper featuring your logo and/or design can be produced for pennies. Offering consumers both free wrapping paper and wrapping services are a sure fire method to generate attention.

I’ve been working in the marketing communication space longer than I care to admit. (Actually I do admit it at the bottom of the page! 😃)

I’ve seen our approach to consumer communication shortened, streamlined, and sped up. All in an effort to be “more efficient and effective.”

The shift from analog to digital, along with the programmatic methods of connecting, targeting, and pushing has eliminated some fond and friendly methods. Methods that were steeped in tradition, and valued for their relevance and impact.

Digital media does not build emotional connection like print media

In 2016, researchers from the University of Maryland published their findings on this topic in The Journal of Experimental Education. Their research suggest that printed marketing materials tend to outperform digital when it comes to reading comprehension, recall, emotional impact and persuasiveness.

The researchers first asked college students which medium they preferred to use for studying, and which they felt offered them the best recall. Ironically, students overwhelmingly chose digital content for both responses. However, when they were tested on their actual retention of information, the results demonstrated that these students clearly had better recall after reading printed materials.

Explore some favorite ways to add more balance to your Marcom mix

Like any good mix, strive for a balance. New and old. Digital and analog. Online and in person. Here are some great (many forgotten) tools that are still being used by many of our clients:

The Wall Calendar – The printed wall calendar is alive and well. In the past week alone, I’ve received two wall calendars in the mail from organizations I do business with. The obvious benefit – I think of them every time I look at the calendar. Make sure to create one that is relevant to you and your audience. We produce many with photos submitted by clients. You can pull together imagery of all types all long as it is relevant and supports your brand. Consider customizing the dates with important local information, suggestions, or helpful tips.

The Thank You Card – Does your organization have a formal thank you card that your front line team can use? A thank you email is one thing…and EVERYONE uses them (along with a survey that nobody wants to answer). But the card that is handwritten knows no equal in impact. People open them, read them, sometimes share them and often keep them. Do you have a stash of professionally printed thank you cards with matching envelopes? Perhaps you should.

The Holiday Card Mailing – Do you reach out to your clients on the holidays? Few people do anymore. Instead, they send out another email wishing “wonderful seasons greetings” or some other worn sentiment. A thoughtful card, preferably signed, is a message that will likely be displayed around the office. Plus, the creative options are endless. From ornaments to music playlists and funny photos with QR codes to link to videos, the chance to put a smile on a face and a warm spot in the heart is increased.

Interested in some of these ideas? Just drop me a line and I’ll send you samples for your review

The field of players in the “Buy Now Pay Later” service, or BNPL continue to grow. This year has seen the addition of Apple into the mix with their “Apple Pay Later” offering. Apple joins a growing field of payment providers that are offering the “installment loan” solution to purchases.

Installment loans are the age-old method of “paying later.” Most of the early installment loans were retailer driven. You wanted to buy something buy couldn’t afford it, the retailer would book the sale and take your down payment and then bill you for the difference. It might be a 12 or 24 month schedule with interest payments included.

New “No Interest” Payment Programs

These BNPL loans are now referred to as point-of-sale financing.

Buy it now, but pay it later. And, without any interest payments. This sure seems like a free lunch. However, if you miss a payment there often is a large late fee for some providers. In the case of Apple Pay Later, if you miss a payment your future purchases are prohibited.

Still, many are signing on to the service. It’s estimated that today, there are in excess of $100 Billion in annual loans and growing.

Younger Consumers are Using BNPL

According to statistics from Cornerstone Advisors, the usage of BNPL skews younger, with the largest segment being Millennials. Currently, 41% of Millennials are using the service:

Gen Z (21-25) 36%
Millennials (26-40) 41%
Gen X (41-55) 30%
Boomers (56-75) 18%

With so many younger consumers using the service, it’s critical to maintain a retention strategy to avoid losing these relationships.

What Can You Do to Compete?

Cody Banks from PSCU explained the challenge this way, “Institutions should package BNPL services in a way that promotes responsible use AND aligns with the institution’s vision.”

Today, you can partner with a provider to offer similar services to remain relevant in all categories of payment/lending services. But this isn’t a winning strategy on its own. You must also leverage the other advantages that your institution brings to the relationship.

Leverage BNPL to grow the Complete Relationship

Offering a BNPL is just one leg of the service stool. Like any tool that facilitates spending, it can be misused. For many it can lead to unintended consequences…like spending more than you earn.

Instead, resolve to be a proactive resource with financial wellness initiatives and products that feature low fees and low interest. Actively reach out to the younger segments to help them build good credit habits with a starter credit card, or offer a balance transfer from a higher rate card to yours.

Because these are smaller balances and transactions, this strategy won’t drive short-term profits. However, it will build a deeper relationship and a meaningful access to these consumers as they grow and evolve.

The economy keeps chugging along despite the predictions from seemingly everyone. Although interest rates have increased, all signs are showing that the economy is resilient. But things aren’t exactly what they seem. It depends on where you look.

There are areas of growing consumer risk.

Credit Card Debt is Climbing

A recent article from CBS News reports the following:

“More Americans are racking up credit card debt as inflation pushes up the cost of food, utilities and other staples.” And, “60% of credit card holders have been carrying balances on their cards for at least a year, up 10% from 2021.”

“59% of Americans who earn less than $50,000 a year carry a credit card balance from month to month,” the reporting notes. “The percentage drops slightly to 49% for those who earn between $50,000 and $80,000 and dips again to 46% for people making $80,000 to $100,000 a year.”

Most people don’t want to compromise their lifestyle choices when they are coming up short during these inflationary times. So, they are making up the difference with credit card spending.

And with some of today’s credit card rates hovering around 25%, it doesn’t take long to rack up massive debt.

The Real Cost of Consumer Debt

Making excessive interest payments is not a healthy practice. The credit card trap relies on those that get into a terrible habit of running up balances, resorting to the minimum balance payment, and never paying off the principal. Once you arrive at the cycle, it’s almost impossible to break.

And, when someone does default, everybody else pays for it through higher rates and fees.

Repackaging Loans and Educating Consumers

Before things get worse, now is that time to reach out to those account holders in need. You can pro-actively move those high balance accounts into lower priced options, such as home equity loans. But just as important as solving that initial problem, you can augment this effort with some financial education to help your users from becoming a statistic.

Tools that can help you focus their efforts on sound financial management include:

• Webinars covering the ABCs of household finances

• Educational web pages sharing the true cost of financial decisions

• Financial planning brochures with worksheets and budgeting tools

• Individual counseling

While many of these tools have been in existence for years, often people don’t notice their availability or their need until they are beginning to face financial discomfort. And that becomes the time that you can help them plot a new trajectory for their life.

Help them now…and forever.

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!

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.

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.

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:
Amazon……..37%
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.

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:
Amazon……..37%
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.

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: https://www.shopify.com/tools/slogan-maker