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Midwestern regional financial institution
Grow the customer base and deepen relationships with those customers in an industry where much of the product line consists of highly regulated products that are often virtual duplicates of those offered by competitors, with minimal pricing variances.
Regulation was limiting the degree to which product differentiation could drive a breakout brand and tight margins were putting stress on profitability, limiting opportunities to beef up staffing levels and leverage technology in an effort to create leading edge customer service. Cross-sell ratios were disappointing because the staff generally lacked both effective selling skills and the motivation to improve them. The labor market did not offer a sufficient talent pool of replacements with those skills either.
We were asked to develop a Next Practice that would successfully address “The Challenge” in spite of the roadblocks cited in The Backstory. Our solution for growing the customer base in a marketplace where inertia ruled because products and prices were stuck in neutral was to segment the market in a way the competitors weren’t: by turning points. Turning Points are events in the lives of people and families that prompt significant changes in thinking and direction, and often result in changes in the products, services, and brands they use because their needs and priorities are changing. When people are open to change, we’ll be there to welcome them.
Step One – Define the “turning points” most likely to make a person or family open to changing banks – graduation/first career job, first marriage, first child, first home purchase, starting a business, etc.
Step Two – Conduct focus groups of people within six months on either side of these events, asking about the decisions and preparation they’re making, feelings they’re experiencing, surprises they didn’t anticipate, how they expect their lives to change, what they’re excited about and apprehensive about, and what they suddenly have to buy or do.
Step Three – Build a suite of products and services for each turning point group and give it a catchy non-bank name (the first-baby package was called The Bundle of Joy).
Step Four – Invite businesses that offer products and services needed by the target group to contribute a coupon, a discount, a sample or something of value to a packet given to everyone who opened a Bundle of Joy (for example, a photographer included a free portrait sitting for baby and parents). The businesses were not endorsed by the bank, and the bank’s regulated products and services were not co-mingled with the offers and discounts given by the businesses.
Step Five – Market the packages to each target group through new media (such as blogs for moms, Facebook groups for new parents, flyers in doctor offices, the other businesses, etc.), earned media (because the approach was novel), and traditional media.
