“Your customers are only satisfied because their expectations are so low and because no one else is doing better.”

Ken Blanchard’s bestselling book Raving Fans opens with that phrase. Could truer words be spoken of the financial institution industry? Banking is an errand. You don’t GET to go to the bank (or credit union) you HAVE to. Do you know what your customers think of you? Would they recommend you to their friends and family?

The Modern Marketer acknowledges that you can’t beg for business anymore, now you have to earn it. That means you have to stop throwing money at traditional marketing efforts. Direct mail, for instance. I cannot believe how many financial institutions still do this. I’m creating my own little commercial. It shows my hands opening a Capital One direct mail piece, walking it over to a machine with teeth and the voice over says, “Capital One. What’s in YOUR shredder?” I ask marketers all the time what their return rate is on this antiquated process — less than 1%!! That’s a 99% failure rate. Can you imagine spending any part of your marketing budget that yields such dismal results?

So why do we do it? Because we’ve always done it that way. The other thing financial institutions are so guilty of — advertising with hullabaloo “me too” products. Every time I see a FREE CHECKING banner on a bank I chuckle. That would be like my grocery store hanging a sing that says “We have MORE food.”

The biggest myth ever perpetuated by the industry was this — checking determines a customer’s PFI (primary financial institution). It was believed that if you GOT a person’s checking account, that they would consider YOU to be their primary financial institution and come to you for all of their financial needs. Here’s why that didn’t work — PFI is a financial institutions’ goal — not one shared by consumers.

I know what you’re thinking — on your last survey you asked that question. Do you consider us (insert your name) to be your PFI? And many of them said yes. Okay — then look at your services per household. If PFI is real — wouldn’t your services per household be really high? My clients average around 1.9. That sucks. If one of those services IS the checking, than it got you .9 of another.

One other point I have to throw out here. It’s called “stickiness”. Old marketers still justify the direct mail expense of free checking because IF you get someone to sign up for Bill Pay AND they use it, they are far less likely to ever move their checking account again. Why? Because it’s a pain in the butt to set up. Nice strategy. Let’s assume that is true — then eventually, won’t we ALL be STUCK? I use bill pay. I love it and I will agree that it would take a pretty heinous act to get me to move. Which brings me to my real point. The number one reason people MOVE their checking account — bad service. NOT because your bank’s checking is “more free.”

My advice: Stop doing what doesn’t work. The relentless pursuit of product (checking) makes no sense today. It seems like the best strategy a financial institution could adopt today in this commodity saturated world is to focus on the experience. The only bank I know of that has really devoted the time and energy it takes to wow a customer is Umpqua Bank. They are serious about service and it shows. The marketing department at Umpqua works “with” the branch managers to create this experience. They helped to create the Umpqua Blend of coffee, partnered with local musicians to create a program called “Discover Local Music” and feature a Local Hero each month at the branch. The modern marketer goes beyond product pushing and understands that your brand is your reputation. What is YOUR reputation?