If so much of the operational side of financial services gnaws at the customer relationship side of the business, why do we continue like this? A startup called BankSimple has set out to answer that question. Their mission is to separate customer relationships from banking.

BankSimple is a customer service business that provides access to your money and financial records from an app. They aren’t a bank. They aren’t a processor. They are a brand name that provides customer service. They partner with banks and processors to manage transactions and provide FDIC insured products splitting revenues with their partners. Their partners provide transactions, nothing more, nothing less. They give up the entire customer relationship in what has always been hailed as a customer relationship business. BankSimple’s customers will be promised an extraordinary customer experience, free of harsh penalties and fees, ripe with warm human relationships via social media channels and an elegant, easy to use banking app that is supposed to change how we manage our money for the better.

Will it work? Maybe. It lets banks and processors do what they have mastered and outsource what they’ve never really done well - regardless of their claims otherwise. It also lets BankSimple focus on one aspect of a very complex business. Maybe it’s time for a new customer relationship model in financial services. It might work for everyone. If it works in banking for BankSimple it may spread to the investment side of financial services where others are exploring alternative options such as Smart401k and the Mutual Fund Store.

Is BankSimple the first to try this? Not really. Mint, SmartyPig, and a handful of other startups have taken a swipe at alternative financial services models with mixed success. But now we have a convergence of technological change in the form of mobile computing intersecting with volatility in the financial sector. The opportunity is there. It will be interesting to see if the financial services sector will be willing to surrender something it holds so dear and if not, how they will respond.

Is customer satisfaction all that you are striving for? Really? If I say I’m satisfied then you’re OK and the world is at one? Satisfaction comes from performance as expected. On a good day, you might exceed my expectations. If you deliver as expected, I’m neutral. Fall short and I’m dissatisfied. Blah! Blah! Blah! You can’t win at this game.

I think it’s the wrong question. Do you really want to know how you’re doing? Ask me if I am happy. Watch my behavior to see if I am happy. Listen to what I say to learn if I share my happiness with others. Because if you make me happy, I’ll be back and I’ll bring my friends.

So, how do you make your customers happy? Look at all of the touch points that they experience with your organization related to your products and services. Look beyond the functional benefits to the emotional and social benefits that you can deliver. Functionality is a baseline proposition — it determines satisfaction. It’s the least common denominator. You and all of your competitors must deliver functionality. It’s required. Premium products and services that truly last deliver emotional and social benefit  — also called happiness.

It’s the reason we still have candles. They make us happy. We haven’t needed them to light up a room for a century — they’re functionally obsolete. But, they can deliver an elegant, romantic glow or a luscious, inviting scent that can make you feel better and improve social interaction. So we still buy candles and will pay a premium for fancy ones. A product feature comparison chart between a candle and a light bulb would go badly for the candle. A customer satisfaction survey would likely go the same way — “On a scale of 1-10 is a candle better than, equal to, or worse than a light bulb.” But we still buy them for their emotional and social benefit. Without those, candles would have disappeared a century ago.

As banking evolves it is at risk of further commoditization. Banking is becoming a utility. How many gas or electric utilities serve your community? To drive value for customers it will be necessary to look beyond product and service functionality to the emotional and social benefits that banks can provide. In a recent BAI interview with Jeffrey VanDeVelde from SunTrust, he explained SunTrust’s efforts to design customer experiences that go beyond product functionality.

“At SunTrust, we do that through focusing on our mission, which is to help people and institute prosperity. If we can help a client feel more prosperous, we believe that will be reflected in emotions and behaviors they then exhibit toward us. Prosperous clients, if they feel confident about the economy and their future, tend to buy more, talk to others about us, have higher balances, etc. We really are focusing on how clients feel about themselves.”

So, to get beyond the commoditizing nature of functionaly, SunTrust is intentionally designing customer experiences with the bank to elicit personal happiness. You can do the same for your bank. Consider the following points, some of which were discussed in detail by VanDeVelde in this DMI paper:
•    Determine the emotional and social jobs that your customers want to accomplish through financial services in order to feel good about themselves. For example, branches provide social and emotional connection to your customers even though online banking is functionally more efficient.

•    Identify the type of happiness that you provide based on the aim of the individual and the locus, or felt source, of the emotions. The aim is either a physical sensation or a higher purpose. The locus, or felt source, is either through others or from within.

•    Design your brand experience to accomplish the emotional jobs that your customers want in a manner that maximizes the impact of the type of happiness you produce. Look for key moments when you interact with customers and capitalize on them to deliver positive emotional and social experiences.

•    Measure your efforts with moment-by-moment sampling, querying your customers very consistently throughout the process to see if they are happy at that moment rather than use surveys that tend to report satisfaction. Look for queues of happiness and happiness behaviors along with simply asking them if they are happy.

Lasting products and services provide happiness. Commodities provide satisfaction. To avoid further commoditization, focus on designing and delivering customer experiences that deliver happiness, enabling your customers to feel better about themselves and their prosperity.

That afternoon I was sitting at a playground with a couple other mommies and asked for their opinion. Why was I having so darned much trouble keeping up? One of them warned me that the middle school’s communication was even worse than the elementary school’s. Great. Something to look forward to. But, now I knew I wasn’t alone.

It seemed to me that we had some very connected and knowledgeable ladies in our small town, seasoned from having older kids pass through the district and knowing the who/what/where/when of how things work. How many other women in my community were sharing my frustration from the lack of communication? Furthermore, how many would benefit from having a network of like-minded people they could rely on for accurate information and help? I needed to create a channel for them to share their knowledge and experience with the rest of us newbies. So, I turned to Facebook.

After 2 weeks there are 174 ladies in our Facebook group and I receive new member requests daily. It has exploded and taken on a life of it’s own. Members are single, married, childless or have 7 (one of our members does) - and we have a common bond: we are ladies who needed a channel to talk, make new friends, share our opinions, ask questions, get validation or just see who else is going to be at the pool today.

Now local business owners are posting links to their fan pages on our Facebook and we support and refer local. Mother’s are finding women to pair up with to pass on clothes. Leaders in our community are posting information about the local farmers market and voting dates. We have about 24 stay at home moms (group within our group) that are planning weekly play-dates. How much tighter will our small little town be when we have this group as the backbone of our everyday lives?

Groups with a common need and purpose are everywhere. Social media gives them a place to be heard. How could your group benefit from an online social network? You may be surprised.

Related Posts:

The Twitter from My Front Porch

Why Your Blog Is Your Front Porch

Image under Creative Commons License by Global X

But that’s OK. The ego is a powerful motivator. It works for team sports from the pro ranks down the food chain to college sports, high school sports and little leagues. We love OUR team. It’s a symbol of OUR town, school or neighborhood.

It works for micro-brewing - we love OUR hometown beer. It works for any independent producer of food, music, art or any other social expression. We adopt local brands as an extension of hometown pride. It’s a way of saying, “this is who I am.” It’s a behavior that shows we belong.

In marketing terms, it’s a behavior that is being supported through the visual channel of branded merchandise. The channel supports the behavior. We rally together to support the emotional bond by wearing our team colors. So, how do you take advantage of this as a marketer? If your brand is geographically limited, that is to say you’re a local brand, you can use channels that support group social expression, such as branded merchandise and social media.

Branded merchandise enables your followers to identify with one another in public. Social media enables them to extend their friendship when the crowd has gone home. Online communities are a behavioral extension of real life communities - the behavior is the same, but the channel is different. One supports the other and the bond is extended. So the question to you as an entrepreneur is, can I be the hometown brand for my category? If the answer is, yes, then start building your community.

Did you ever stop to wonder why your clients chose you in the first place? What do you do that makes you special to them? There is a reason that they chose you. The motivation behind their decision to hire you and keep you as a trusted advisor may be quite different from what you think.

Your market positioning is only part of the equation. You may have positioned yourself to be well suited for a particular age group or profession and have developed a cohesive marketing program to speak directly to those markets. If your best clients choose you because of the way that you position yourself, then good for you! But what if your clients are choosing you for a completely different reason?

If you don’t have a finger on why your clients were attracted to you, you might be missing out on a huge opportunity to find more clients like your best clients. After everything that they entrust you to do for them, wouldn’t you agree that it’s important to know why? It’s the one thing that you do better than anyone else they know. I’ll bet that if you knew what your one great strength was you would grow your firm leaps and bounds.

When I say local, I mean 20.69 miles from my home. Pretty big inconvenience for me, wouldn’t you say? Yes and no.

I’m a loyal customer to my new bank for a few different reasons. My old bank would probably never guess why I left them, but if they asked, here’s what I would say:

• When I call I don’t get a 16-option-automated message, then spend several minutes on hold, then tell my story to 3 or 4 people (or countries) before finally getting patched into the correct department who can actually help. I call, they (a human) answer.
• I have a Vice President’s cell phone number in my phone. Sometimes he’s out and about in the bank and usually not at his desk. He wants me to have easy access to someone who can help if I’m in a pinch or having an issue.
• When I pull in to the drive thru, John says, “Hey Sarah – how are you?”
• When my son or daughter walks into the bank with me, they are treated with the same enthusiasm and praised for bringing in their piggy banks.

My new bank isn’t perfect - but they know me by name and that’s important to me. By showing that they know me they’re telling me I’m important to them as a customer. I’m a highly social person. Personal connections matter to me and I’m very vocal about what I like and don’t like. I think my bank is pretty remarkable, so I make remarks about them — good ones, all over the place, online and in person. Yes, I am where good referrals come from, and I’m not alone. So, if you want to grow your branch, get out from behind your desk and make some new friends. You just might find the change to be pretty remarkable.

Related Links:

When Social Norms Fail, and Other Bank Tales

Extending Your Social Network Through the Frontline

There are more than six stages of the sales process that your customers have to go through to get to the final stage where they will offer referrals. They have to know you, like you, trust you, try you, buy you, and love you before they can rave about you to their neighbor or colleague. Have you thought about the fact that over 80% of your customer base just isn’t there yet?

So, how can you tell which customers are ready? Ask yourself a simple question. Are you remarkable? You probably are. If you’ve ever received a referral that’s a sure sign that you’re doing something right. The question is, what did you do that they loved?

Look at the clients who have been referring you. There is something unique and desirable about you that got you to where you are today. What did you do for those clients? What need or similarity do those clients have? Does it make them a unique market segment that’s different from the rest of your clients? Or is it something that you have done for a few that you should be doing for all of your clients?

If your referring clients are a particular market segment, you may want to consider focusing all of your energy on that specific segment. It’s possible that your lack of focus is costing you a lot of time and money.

On the other hand, if you’ve done something right for a few clients and neglected all of your others, get out there and make everyone else happy! You could use the referrals, right?

In order to get remarks, you’ve got to be remarkable. Once you understand what it is that makes you remarkable you can help your customers understand how they can talk about you to their friends. Then you can start to find more customers like your best customers and you really will be referral-based.

Photo Credit: nouQraz, via Flickr Creative Commons

The term, community benefit, is a wonderful alternative to nonprofit. Rather than describing what you aren’t, it describes what you are. That’s a big improvement. What’s more, it isn’t necessarily exclusive to nonprofit organizations. Although the entirety of the book and Hildy’s work is dedicated to that sector, I’ve been successful introducing it’s concepts in the financial services sector and firmly believe that it holds great promise for revitalizing the economy.

Think about it. What would your community look like if all businesses and organizations looked at themselves through the lens of providing community benefit? This is something that Umair Haque discusses in his book, The New Capitalist Manifesto: Building a Disruptively Better Business. Haque’s macroeconomic thesis for a new capitalism is broken down in Gottlieb’s earlier work in a simpler form, directed to the nonprofit sector and includes comprehensive instructions for practical application of the ideas. Put the two books together and I believe we can change the world. If you can afford only one and need to take action now, go for The Pollyanna Principles.

Beyond discovering how to describe yourself in terms of what you are as opposed to what you aren’t, you’ll learn about the interconnectedness of our thoughts, actions and inaction in making a community. You’ll learn to reframe your work in a context that enables you to see the better world you desire and provides you with a path to get there. It will help you move from thought to action and from planning to implementation, all with fairness, governance and sustainability.

As we migrate from the industrial revolution into a new economic reality, this book offers a practical guide to create success. On it’s 2nd anniversary, The Pollyanna Principles is more relevant than ever.

The book is available here: The Pollyanna Principles

Related Spurspectives posts:
Why Every Nonprofit Is Accountable For A Vision
To Do One Thing Really Well, Do You Fix Your Weakness?
What The Financial Sector Can Learn From Nonprofits About Social Media
Part 2 of a Unique Look at Social Media for Financial Services
Part 3 of How to Spur Investment Through Social Media

Related external posts:
“Be the change, build on strengths, hold ourselves accountable: a review of The Pollyanna Principles” by Christine Egger

“The Pollyanna Principles: Creating the Future We Want for Our Communities” by Romina Oliverio

I have to agree, we confuse testing for discovery and rarely conduct upfront research. We love testing because it produces defined results and confirms performance. That’s very reassuring. In a field fraught with uncertainty it’s comforting to find reassurance. But too often the comfort is temporary because the test results don’t prove out in real world use. Then we are left wondering what happened because the market research said the results would be great. We confused testing for research and ran the experiment too late without understanding the context that created the test results.

Without context, there can be no understanding. Brands exist in the shared consciousness of affinity groups, or tribes. Groups share an ongoing dialogue that holds the group together and defines its culture and behavior. It’s in this context that brands obtain or lose relevance. They either become part of the dialogue or don’t. By not discovering the meaning and flow of the group’s dialogue and the context of their shared behavior, we have very little hope of fulfilling a shared need in a meaningful way - meaningful in that it results in quantifiable behaviors or sales that can be tested and measured.

By taking the time to discover the true context in which your brand exists, you can participate in the dialogue in a meaningful manner. By fulfilling a need and connecting with shared emotions you can become relevant to the group and understand the meaning of your brand - in context. Then you can participate in the dialogue, introduce ideas in context and test the result of your innovations. Starting early to discover and understand yields far better results down the road in testing. I’m not diminishing the importance of testing - it’s critical, but it doesn’t come first and it shouldn’t substitute for discovery.

Related posts:

The Myth of Aha and Other Brainstorming Tales
How Focus Groups Can Provide Real Focus
Image by WhyOhGee from Flickr used under Creative Commons license.