Making a Complex Business Consumer Friendly
May 2006 By Denny Hatch
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Looking at the New Breed of Bankers
May 25, 2006: Vol. 2, Issue No. 41
How well does the average consumer understand banking?
In April 1979 I flew to Harrisburg, Pa., to meet with one of the most knowledgeable men in direct marketing, Bob Doscher, then the product development director of Historical Times Publishing.
The previous month, the Three Mile Island nuclear energy plant accident came within a whisker of contaminating much of the Northeast.
The plane was a prop-driven Allegheny (later US Airways) puddle-jumper. I found myself sitting next to a pleasant young lady who was the assistant manager of the bank branch that was nearest to Three Mile Island.
As we flew over the three steam towers that had dominated the media for weeks, the young woman proceeded to tell me a truly fantastic, unbelievable inside story.
"My Money Is Radioactive!"
Immediately following the Three Mile Island accident that nearly fried millions of Northeasterners, this local bank branch had huge run on cash. Depositors were lined up around the block desperate to get their money out.
It was microcosm of the Great Depression where thousands of banks failed and the newly inaugurated president, Franklin D. Roosevelt, declared a three-day bank holiday to stop the run on cash as soon as he was sworn in, on March 5, 1930.
The assistant manager sitting next to me explained that the bank officers assumed these panicky depositors were afraid that radioactivity would wipe out the computer tapes and their money would not be accounted for.
It turned out the bank's customers believed that when money was deposited in the bank, it was kept in little piles of cash in the vault with the depositor's name on it.
They were afraid that their cash would become radioactive and the bank would not give it to them.
That plane ride to Harrisburg was 27 years ago.
Are Americans more knowledgeable about banking today than those folks were back in 1979?
The Internet bankers seem to be betting on it.
Internet Banks
The Associated Press story on the rise of Internet banking stunned me. The idea that people would send their money out into cyberspace and trust faceless gnomes on computers to handle it for them is unbelievable.
I entered "Internet Banks" into Google and clicked on the second listing, "Internet Banks in the Yahoo! Directory." Up came brief descriptions of 20 banks and their URLs. (See the end of this story for the complete list.)
Among the horrors:
* EverBank.com had a "100% Satisfaction Guarantee!" followed by 320 words of disclaimers in light gray mousetype.
* Griffon Bank's Web site is in German. A former client, Jerome Schneider, went to jail for touting the advantages of banking offshore.
* To make a deposit at NetBank requires a trip to your nearest UPS store. And a deposit of cash is not allowed.
Schooled in direct marketing for 45 years, I am used to receiving a letter from a person—a real person with a real signature—that enables me to make some kind of emotional connection with the product or service being offered. Yet in all of these 20 Web sites, I could not easily (or at all) find the name of a person.
President Harry Truman had this famous sign on his desk.
Where does my buck stop in an Internet bank?
Why would I want a person?
Bankers Dumb as Dirt
In early February 2003 I received the following double postcard from my local bank, First Union (formerly CoreStates, now Wachovia):
I went ballistic. Checking Quicken, I found that the Denny Hatch Associates account was flush with several thousand dollars. It turned out that the bank had persuadedmy wife, Peggy— who is in charge of our money—to open some kind of corporate money market account that would generate interest on cash. We never got around to using the account. So when it came time to deduct the fee for the upcoming year, this account was empty and therefore automatically overdrawn $5.00.
I rushed down to the bank, handed the customer service lady a $5 bill and told her to close the account.
The following month I received another double postcard with the identical wording that virtually threatened a repo goon would come banging on my door, except for one small change in the first line:
The bumpkins in the North Carolina First Union HQ had spent 35 cents postage to threaten me with collection for being 2 cents overdrawn in an account that was never used!
Coincidentally, on the next block, a snappy new branch of Commerce Bank had just opened—with free checking and a free safe deposit box for seniors and with business hours seven days a week, including evenings.
When I went to First Union to close out all our accounts, the very nice customer service lady asked if I could tell her why I was leaving. I told her about being dunned for 2 cents.
"Oh, you should have brought that in to me and I would have taken care of it," she said. "Those people down there have no idea what they are putting in the mail."
At least I was able to talk to somebody face-to-face and straighten the thing out.
If this were all happening in cyberspace, I would be an emotional wreck.
My sense is that bricks-and-mortar banks have little to fear from the virtuals, especially since the online marketing culture is designed to make it difficult—if not impossible—to reach a real person to help solve a problem or explain an offer.
And if a real person comes on the line, chances are it is a disembodied voice out of a boiler room in India where people talk with irritating accents and have no personal stake in the comfort or satisfaction of an agitated voice 6,000 miles away.
Bankers, They Are A-changing
Blair Kamin, the elitist and uppity architecture editor of the Chicago Tribune, wrote a nasty two-part series in February 2005. The title:
I flat-out disagree. Two years ago, Peggy and I were in Madison, Wisc., where a legislator's aide gave us a private tour of the state capitol. On four sides of this monumental building are 10 banks, all of them cold, formal and inhibiting. As I recall, it was a Saturday, and the capital square was deserted—no pedestrians, no action, no fun. It was a ghost town.
This past May 17, 2006, Jane J. Kim wrote a piece in The Wall Street Journal titled, "A LATTE WITH YOUR LOAN? Banks Try to Turn Branches Into Hangouts With Wi-Fi, Movies, Coffee Bars and Yoga."
Branches are being opened in shopping malls, strip malls and around the corner—venues that are welcoming, pleasant and fun.
For example, the Commerce Bank that I now patronize has a marvelous free machine into which you can dump all your coins for counting. After a lot of delicious whirring and clanking—rather like a slot machine—it prints out a chit with the total that you can hand to a teller and get greenbacks. Kids love it. Hey, I love it!
Another example is the branch of Umpqua Bank in Portland, Ore.'s Pearl District, designed by the architects of Thompson, Vaivoda & Associates in league with the design and banking consultants of ZIBA. "Customers enter a comfortable open space that invites them to relax, read the paper, surf the internet on provided wireless laptop, and sip the bank's own blend of coffee in bistro-like seating areas," wrote the editors of Architecture Week in 2003.
Washington Mutual has come up with a design for 200 locations in New York and New Jersey that it named "Occasio," Latin for "favorable opportunity." Created by the designers of the Disney retail stores, customers are greeted by khaki-clad "concierges" that direct them to circular desks called "teller towers" where they can talk one-on-one with a bank employee and get an understanding of the many confusing choices open to them. Meanwhile, a play area keeps the kids occupied while the bank tries to get a larger share of wallet from its customers.
According to The Wall Street Journal, these Occasio branches were responsible for 900,000 new checking accounts in 2005 and brought in one-third of Washington Mutual's $183 million deposit growth.
In short, a savvy new breed of bankers are beginning to show consumers that they care—that banking can be all about you, rather than about themselves.
Takeaway Points to Consider
* Do you know what you are sending out to your customers and prospects—really?
* When was the last time you assembled all mailings and form correspondence that leaves your organization and looked at it from a sales, marketing and PR point of view? My bet is that you will find much that can be improved.
* How customer-friendly is your accounting system? For example, at First Union, Peggy and I had four accounts—personal checking, corporate checking, savings and the unused money market account that got dunned for being 2 cents overdrawn. The other accounts had plenty of money in them, yet First Union—no doubt using an antiquated legacy system—was incapable of looking at the whole picture of our relationship with the bank. How many other customers did it lose through this penny-grubbing incompetence?
* Are you making your products and services easily understood to customers and prospects. When I took over as editor of Target Marketing magazine, I told the writers they had to understand the subject of their article so completely that they could explain it to their grandmother. We had one reporter, a very facile writer, whose content could be gibberish—corporate-speak. When I asked what she was talking about, she replied defensively "That's what the person said in the interview." This happened over and over again until it was suggested she find employment writing about a less technical industry. Last I heard, she was with a consumer publication.
* Are you bringing your products and services to your customers and prospects and making it easy to order?
* Are your telephone representatives helpful and patient, or are they stressed out and told to get on to the next call as quickly as possible?
* You may get increase your share of market by satisfying needs. But you can only increase share of wallet by creating wants.
Web Sites Related to Today's Edition
Yahoo Directory of Internet Banks
http://tinyurl.com/lr5r6
May 25, 2006: Vol. 2, Issue No. 41
IN THE NEWS
Internet banks draw raves
Many like the convenience and higher interest rates, but it's not for everyone.
NEW YORK--Higher interest rates initially drove Nick Sayers to the Bank of Internet. But he soon realized it's more convenient, too. Sayers, 26, a private-equity investor in Chicago, is one of a growing number of Americans ditching their neighborhood brick-and-mortar accounts. Others are moving the bulk of their money to virtual banks like Bank of Internet, which can offer better rates because they don't have to operate multiple branches. To deposit money, customers generally mail checks in postage-paid envelopes, arrange for direct deposits of paychecks, or transfer funds from another account using the Internet or telephone. To withdraw money, they can go to any ATM--some banks, including Bank of Internet, will refund most fees another bank charges.
--Anick Jesdanun, The Associated Press, May 22, 2006
How well does the average consumer understand banking?
In April 1979 I flew to Harrisburg, Pa., to meet with one of the most knowledgeable men in direct marketing, Bob Doscher, then the product development director of Historical Times Publishing.
The previous month, the Three Mile Island nuclear energy plant accident came within a whisker of contaminating much of the Northeast.
The plane was a prop-driven Allegheny (later US Airways) puddle-jumper. I found myself sitting next to a pleasant young lady who was the assistant manager of the bank branch that was nearest to Three Mile Island.
As we flew over the three steam towers that had dominated the media for weeks, the young woman proceeded to tell me a truly fantastic, unbelievable inside story.
"My Money Is Radioactive!"
Immediately following the Three Mile Island accident that nearly fried millions of Northeasterners, this local bank branch had huge run on cash. Depositors were lined up around the block desperate to get their money out.
It was microcosm of the Great Depression where thousands of banks failed and the newly inaugurated president, Franklin D. Roosevelt, declared a three-day bank holiday to stop the run on cash as soon as he was sworn in, on March 5, 1930.
The assistant manager sitting next to me explained that the bank officers assumed these panicky depositors were afraid that radioactivity would wipe out the computer tapes and their money would not be accounted for.
It turned out the bank's customers believed that when money was deposited in the bank, it was kept in little piles of cash in the vault with the depositor's name on it.
They were afraid that their cash would become radioactive and the bank would not give it to them.
That plane ride to Harrisburg was 27 years ago.
Are Americans more knowledgeable about banking today than those folks were back in 1979?
The Internet bankers seem to be betting on it.
Internet Banks
The Associated Press story on the rise of Internet banking stunned me. The idea that people would send their money out into cyberspace and trust faceless gnomes on computers to handle it for them is unbelievable.
I entered "Internet Banks" into Google and clicked on the second listing, "Internet Banks in the Yahoo! Directory." Up came brief descriptions of 20 banks and their URLs. (See the end of this story for the complete list.)
Among the horrors:
* EverBank.com had a "100% Satisfaction Guarantee!" followed by 320 words of disclaimers in light gray mousetype.
* Griffon Bank's Web site is in German. A former client, Jerome Schneider, went to jail for touting the advantages of banking offshore.
* To make a deposit at NetBank requires a trip to your nearest UPS store. And a deposit of cash is not allowed.
Schooled in direct marketing for 45 years, I am used to receiving a letter from a person—a real person with a real signature—that enables me to make some kind of emotional connection with the product or service being offered. Yet in all of these 20 Web sites, I could not easily (or at all) find the name of a person.
President Harry Truman had this famous sign on his desk.
Where does my buck stop in an Internet bank?
Why would I want a person?
Bankers Dumb as Dirt
In early February 2003 I received the following double postcard from my local bank, First Union (formerly CoreStates, now Wachovia):
NOTICE OF OVERDRAWN ACCOUNT
Our records as of 02/25/2003 show an overdraft of $5.00 remains on your account 2******4903. Please make a deposit right away to avoid possible collection activity and account closing. You can obtain statement information at most First Union ATMs, or contact your financial center, Commercial Relationships Manager or Private Client Group officer.
I went ballistic. Checking Quicken, I found that the Denny Hatch Associates account was flush with several thousand dollars. It turned out that the bank had persuadedmy wife, Peggy— who is in charge of our money—to open some kind of corporate money market account that would generate interest on cash. We never got around to using the account. So when it came time to deduct the fee for the upcoming year, this account was empty and therefore automatically overdrawn $5.00.
I rushed down to the bank, handed the customer service lady a $5 bill and told her to close the account.
The following month I received another double postcard with the identical wording that virtually threatened a repo goon would come banging on my door, except for one small change in the first line:
NOTICE OF OVERDRAWN ACCOUNT
Our records as of 03/25/2003 show an overdraft of $0.02 remains …
The bumpkins in the North Carolina First Union HQ had spent 35 cents postage to threaten me with collection for being 2 cents overdrawn in an account that was never used!
Coincidentally, on the next block, a snappy new branch of Commerce Bank had just opened—with free checking and a free safe deposit box for seniors and with business hours seven days a week, including evenings.
When I went to First Union to close out all our accounts, the very nice customer service lady asked if I could tell her why I was leaving. I told her about being dunned for 2 cents.
"Oh, you should have brought that in to me and I would have taken care of it," she said. "Those people down there have no idea what they are putting in the mail."
At least I was able to talk to somebody face-to-face and straighten the thing out.
If this were all happening in cyberspace, I would be an emotional wreck.
My sense is that bricks-and-mortar banks have little to fear from the virtuals, especially since the online marketing culture is designed to make it difficult—if not impossible—to reach a real person to help solve a problem or explain an offer.
And if a real person comes on the line, chances are it is a disembodied voice out of a boiler room in India where people talk with irritating accents and have no personal stake in the comfort or satisfaction of an agitated voice 6,000 miles away.
Bankers, They Are A-changing
Blair Kamin, the elitist and uppity architecture editor of the Chicago Tribune, wrote a nasty two-part series in February 2005. The title:
ONCE GRAND, NOW BLAND
Branch banks are booming. While the services are praiseworthy, the architecture—and the effects on neighborhoods—is troubling.
Now banks want to look like Starbucks, not the Parthenon. Around Chicago and the nation, branch banks are popping up like mushrooms—or, more accurately, multiplying like cockroaches. Defying predictions made in the 1990s, when online banking boomed and banks trimmed spending on bricks and mortar, face-to-face banking is back. But its architecture, on the whole, is disappointingly faceless.
I flat-out disagree. Two years ago, Peggy and I were in Madison, Wisc., where a legislator's aide gave us a private tour of the state capitol. On four sides of this monumental building are 10 banks, all of them cold, formal and inhibiting. As I recall, it was a Saturday, and the capital square was deserted—no pedestrians, no action, no fun. It was a ghost town.
This past May 17, 2006, Jane J. Kim wrote a piece in The Wall Street Journal titled, "A LATTE WITH YOUR LOAN? Banks Try to Turn Branches Into Hangouts With Wi-Fi, Movies, Coffee Bars and Yoga."
Branches are being opened in shopping malls, strip malls and around the corner—venues that are welcoming, pleasant and fun.
For example, the Commerce Bank that I now patronize has a marvelous free machine into which you can dump all your coins for counting. After a lot of delicious whirring and clanking—rather like a slot machine—it prints out a chit with the total that you can hand to a teller and get greenbacks. Kids love it. Hey, I love it!
Another example is the branch of Umpqua Bank in Portland, Ore.'s Pearl District, designed by the architects of Thompson, Vaivoda & Associates in league with the design and banking consultants of ZIBA. "Customers enter a comfortable open space that invites them to relax, read the paper, surf the internet on provided wireless laptop, and sip the bank's own blend of coffee in bistro-like seating areas," wrote the editors of Architecture Week in 2003.
Washington Mutual has come up with a design for 200 locations in New York and New Jersey that it named "Occasio," Latin for "favorable opportunity." Created by the designers of the Disney retail stores, customers are greeted by khaki-clad "concierges" that direct them to circular desks called "teller towers" where they can talk one-on-one with a bank employee and get an understanding of the many confusing choices open to them. Meanwhile, a play area keeps the kids occupied while the bank tries to get a larger share of wallet from its customers.
According to The Wall Street Journal, these Occasio branches were responsible for 900,000 new checking accounts in 2005 and brought in one-third of Washington Mutual's $183 million deposit growth.
In short, a savvy new breed of bankers are beginning to show consumers that they care—that banking can be all about you, rather than about themselves.
Takeaway Points to Consider
* Do you know what you are sending out to your customers and prospects—really?
* When was the last time you assembled all mailings and form correspondence that leaves your organization and looked at it from a sales, marketing and PR point of view? My bet is that you will find much that can be improved.
* How customer-friendly is your accounting system? For example, at First Union, Peggy and I had four accounts—personal checking, corporate checking, savings and the unused money market account that got dunned for being 2 cents overdrawn. The other accounts had plenty of money in them, yet First Union—no doubt using an antiquated legacy system—was incapable of looking at the whole picture of our relationship with the bank. How many other customers did it lose through this penny-grubbing incompetence?
* Are you making your products and services easily understood to customers and prospects. When I took over as editor of Target Marketing magazine, I told the writers they had to understand the subject of their article so completely that they could explain it to their grandmother. We had one reporter, a very facile writer, whose content could be gibberish—corporate-speak. When I asked what she was talking about, she replied defensively "That's what the person said in the interview." This happened over and over again until it was suggested she find employment writing about a less technical industry. Last I heard, she was with a consumer publication.
* Are you bringing your products and services to your customers and prospects and making it easy to order?
* Are your telephone representatives helpful and patient, or are they stressed out and told to get on to the next call as quickly as possible?
* You may get increase your share of market by satisfying needs. But you can only increase share of wallet by creating wants.
Web Sites Related to Today's Edition
Yahoo Directory of Internet Banks
http://tinyurl.com/lr5r6
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