12 May 2009

Is "I'm Dull" Marketable?

“Banking should not be exciting,” Clay W. Ewing, president of retail financial services at German American Bancorp, a community bank in Jasper (Indiana), told The Times. “If banking gets exciting, there is something wrong with it.”

The preceding quote was taken from a New York Times article "We're Dull, Small Banks Say, But [at] Least We're Profitable." As a marketer for a $200 million credit union, I'm not sure how to take this statement. On one hand, Ewing is absolutely correct. The flashiest financial institutions (read: WaMu, Bank of America, Lehman Brothers, Citi, Bear Stearns, Wachovia, et al.) who made high-priced gambles on mergers, acquisitions, lending, investments, and promotions took the hardest falls in the credit crisis. By trying to be "exciting" (read: wildly profitable), these banks took on wild risks that have clearly proven to be devastating to the world economy.

Sure, small banks and credit unions have felt the collateral damage from the credit crisis. Rising unemployment, investment losses, lost consumer confidence, and their associated effects were virtually unavoidable for all businesses, financial institution or not. But these scrapes have been very minor in nature compared to the blows goliath, more "exciting," banks and credit unions have suffered. The financial institutions that took the conservative (read: boring) approach to lending and investments over the past 20 years are the ones to escape this banking crisis with the cleanest balance sheets, the least public disdain, and the more promising futures.

On the other hand, my family's livelihood (and I'd argue the livelihood of our credit union) depends on my ability to help make banking (err, credit unioning) exciting...or at least more exciting. I work for a credit union that carefully controls operating expenses, makes conservative lending decisions, and invests in only the safest instruments on the market. But that doesn't stop us from trying to make our organization as "exciting" as possible.

So the question is this: Can a financial institution, long-term, be exciting AND profitable? Is "dull" the best way to run a credit union? If so, why don't we have more than our current, paltry share of the nation's deposits?


Mark said...

If banking (or even credit unioning) is simply the transaction of funds from one person or organization to another then it should be extremely boring. These things should happen effortlessly without hangup to ensure a positive experience.

However, if banking includes (in addition to that mentioned above) a relationship with an organization that is helping its customers/members reach their financial goals, well then that is very exciting.

We "bought" our first home just over a year ago. The bank that gave us the mortgage is associated in my mind with reaching that milestone. (And so far, it's a very positive association.)

I want a financial institution that bores me each month (on my monthly statement) but wows me every year (in helping me reach a financial goal).

Matt, the Credit Union Warrior said...

@Mark That's exactly what I want as well. Largely, I believe that's precisely what most credit unions offer. So the question, I guess, is how does boring (but effective) entice brand evangelism? "Dull" is effective, safe, and profitable...but not necessarily sustainable. Unless, of course, we can encourage the masses that "dull" is better and worth telling their friends about.

Mark said...

Since you went all "let's hear your ideas" on me ;)

* Remind your members on their statements or online banking 1) how long you've been in this relationship and 2) how long it's been 'boring', aka error free. (Boring for a long time becomes exciting...crazy)

* Imagine some kind of "bonus bucks" when you hit error free milestones for each member. In my mind it goes something like this: "Errors stink and cost everybody time and money. For every 6 months that your account is error free, you'll get $10 to distribute into one of our "Giving Back" initiatives." Ok it sounds a little complicated...but hopefully I didn't lose anybody.

* Highlight "milestone wows" on your website, statements, wherever. "Last month we helped 3 families move into their first home." or "helped 2 teenagers get their first ride" or "accepted final payments on two mortgages" Link to stories that expand on these stats.

Ok that's my brain explosion onto your blog, go forth and allow them all to be shot down with logistical details ;)

Matt, the Credit Union Warrior said...

@Mark This blog has never been about shooting down crazy ideas... Rather, it's all about "how cool would it be if credit unions did X!?!?"

Your ideas are terrific...and exactly the sort of things credit unions need to implement to make members feel like owners, that their credit union is rooting for them, and that we truly care about their well-being. I think account statements and transaction receipts need to be used to recognize member accomplishments, cheer them on toward meeting savings goals, and congratulate them for being financially responsible. Not "exciting," but cool.

Anonymous said...

Love this post and the question.

As a credit union member (no longer am I an employee with my account where I work) I can say that accuracy and speed are uber important to me as I run the errand. BUT - I wouldn't mind a little love now and again.

I live in NY and my account is still at Point West Credit Union in Portland, Oregon. Why? Cuz they give me long distance love AND they do really fun things like this: http://www.sendbrowniepoints.com/

I love Mike Fletcher (VP and i3 dude) and the CEO Robert Barzler (who will be part of an umbrella drill team at the Portland Starlight Parade later this month). These folks have fun and still keep my money safe and sound and have my back (thanks Randy Majors, my person) - from 2500 miles away.

Jeffry Pilcher said...

Dull is at odds with differentiation, which is the key to branding.

Dull = commoditized, so if you've heard any financial institution bitch about low margins, now you know why.

Statements like "dull is how banking is supposed to be" is the kind of stuff cowards say. It's a self-reinforcing affirmation intended to show why the safe, boring path they prefer is "the right one." Hogwash. They are simply more comfortable being a dull, boring banker. They are afraid to stand out, get noticed or do anything different. They are projecting their personal preferences for "dull financial services" onto everyone -- not everyone wants dull banking.

The truth is: Banking sucks. Anything you can do to make it a little less sucky (i.e., less dull) is probably a good thing.

But of course, different people want different banking experiences. Some people like dull banking, others don't. There's no "one, right answer" to this question.

Ben said...

I think if you replaced "dull" with "simple" you could solve your problem. Dull is a turn-off; simple is a turn on. And you can get all the benefits of "dull" without losing the spark.

Tim McApine said...

Clay W. Ewing is confusing keeping members (or customers in the banking world) versus attracting new members.

To keep members, you just have to not screw up and offer decent rates and services.

To make advocates who recommend your credit union and to get brand new members, you have to be different, offer compelling products and services, great rates, build trust and actually get to know your members. That doesn't sound dull to me.

Loving Mark's ideas.

And, for a guy who threatened to end his blog, your posts have been home runs lately.

Matt, the Credit Union Warrior said...

@Denise I highly doubt you would be so fiercely loyal to a dull financial institution. Yep, safety, soundness, speed, and accuracy are prerequisites...but belongingness(TM) is special.

@Jeffry The stoics among us will say that dull should be the goal...I think there's a market for that. I think most people want their banking experience to be a little less sucky, like you say. It would be interesting to see a breakdown of how consumers fall into these camps.

@Tim Interesting observation. Maybe even if dull works, it can only work for a predetermined length of time? When your last customer/member dies, there will be no one to replace their business because your financial institution is, well, dull. I don't think we need to be the life of the party, but we shouldn't suck the life out of the party either.

Mike Bartoo said...

In my opinion, we may be coming at this from the wrong direction. Almost every response that I've seen has touched on the following phrase in some way - "I want..", "I can say..are important to me", etc. As a CU Marketer - what do your members and potential members want? If they want you to be "dull/boring", as I suspect might be the case for certain markets, then by all means, you should be. Jeffry is correct in that not everyone wants dull banking. But there is a significant population that does. If that population lines up with your customer/member market then "dull" might very well be marketable.

Bryan said...

I am with Jeffry. Banking sucks. My objective, when I was with a big CU, was to make banking suck less. Being less "sucky" helped us create spike attributes and differentiation.