Customer Crossroads

A bank introduces Woops feature: ING Direct New Free Chequing

I never expected ING Direct to launch a chequing account. Why enter the ugly and expensive transaction part of the business? Well, they have proved me wrong, and good for them.

Their new Thrive chequing promises to give back the average $185 a year Canadians pay in bank fees.The pitch: unlimited free chequing, and access to deposits and withdrawals at ATM machines. (ING has no branches, only a few ING Cafes in major markets).

The splashy launch included women in orange bathing suits jumping in fountains, billboards that reveal themselves when passersby remove coins, and fun contests.

The marketing message at launch: "Today we bring you Freedom." Nice insight behind that one -- speaks to deeply felt wishes, especially in a tough economy.

Where the Woops comes in

The Woops feature offers to cover your mistakes up to $250. A much better name than "Overdraft Protection" and again, speaks to the reality for most people, that an unintended overdraft is a mistake, not a moral failure.

There are also e-mail alert features included, to give people quick updates about their account balances. Another nice touch that acknowledges the reality that few people maintain detailed banking records now. And also leverages mobile without having mobile transaction capability.

How to reach people -- send the President to a shopping mall

Imagine a bank president speaking at a shopping mall -- that's what happened here. Of course ING Direct is a consumer bank, but even so, this is a big departure from the staid and stodgy approach we usually see.  And of course, what a great way to reach people from coast-to-coast, in a major tourist destination.

They've also added scarcity to the mix -- the account is only available initially to 10,000 of their million plus customers.

Yup, there's a social media strategy.

Finally, clever leverage of social media, with Flikr, YouTube videos, a Facebook site, and Twitter. With some content worth following, at least for a while.

Full disclosure

I didn't do the qualitative on this project. I just wish I had, because I think they have nailed it.

My take

So there's some new disruption in the marketplace. It should make for some interesting times.

What do you think?

More info: Finextra story, ING Thrive Microsite

We need to name things to remember them

I'm recently back from a stay in a cabin on a lake, where Bruce and I canoed hither and yon most days. Like most northern lakes, the trees and shoreline tend to look the same from one corner to the next, and it's hard to describe where you want to go.

"Let's go where we went yesterday, up that big inlet" "The third one on the left, right?" "No, it was just past that island, the one with the dead tree." 

To avoid spending long periods in such meaningless conversations, you quickly give names to such features as you can identify. Green Dockhouse point. Moose marsh. Otter bay. It's the only way to actually describe things.

I find the same thing happens at the gym. You learn a ton of cool exercises from a trainer or in a class which you can't remember when you go back in on your own. I have a workout buddy, and we have a lot of inane conversations like this:

"Let's do that thing where one leg is on the BOSU ball." "Where you do sit-ups" "No, not that one. The one where you are on your back"

To counter this problem, we are trying to give memorable names to the exercises. We learned one called "Dead Bug", and believe me, we remember how to do that one. It looks just like a dead bug.

We need names, we need acronyms, we need ways to remember and file things. And the more complex and similar the things we are trying to remember, the more critical the naming distinctions become. 

(Doctors seem to know a gazillion acronyms for things -- no doubt because they need to remember a gazillion symptom lists, etc. Like RICE for soft tissue injuries - Rest, Ice, Compression, Elevation.)

I was thinking how meaningless many service product names are in this regard. Check out any bank website for good examples of this.

Your take?

How do we use this knowledge of what people are like to improve the customer experience?

The wisdom of CK Prahalad

Strategy + Business recently published an interview with CK Prahalad conducted prior to his sudden death in April 2010: “The Life’s Work of a Thought Leader,” by Art Kleiner.

It's a delightful read, and a reminder that interviews with really fascinating people, conducted by skilled interviewers such as Art Kleiner, can provide a real window into someone's thinking.

CK Prahalad is best known for his books, The Fortune at the Bottom of the Pyramid: Eradicating Poverty Through Profits and The New Age of Innovation: Driving Cocreated Value Through Global Networks.

Here are a few of the quotes from the article that I particularly liked:

“A lot of times, research tends to start with the methodology. I prefer to start with a problem that’s of interest and apply whatever methodology is appropriate.”

“Every one of my research projects started the same way: recognizing that the established theory did not explain a certain phenomenon. We had to stay constantly focused on weak signals. Each weak signal was a contradictory phenomenon that was not happening across the board. You could very easily say, 'Dismiss it, this is an outlier, so we don’t have to worry about it.' But the outliers and weak signals were the places to find a different way to think about the problem.”

"Big impactful ideas are conceptual breakthroughs, not descriptions of common patterns. You can’t define the 'next practice' with lots of examples. Because, by definition, it is not yet happening.”

“If your aspirations are not greater than your resources, you’re not an entrepreneur. For large companies to be entrepreneurial, they have to create aspirations greater than their resources. You can call it 'strategy as stretch' or 'strategic intent.'"

“No entrepreneur starts with adequate resources for his or her aspirations. If you want to create entrepreneurial drive in a large company, you have to create aspirations that lie outside your resource base.”

“Strategy is about creating new competitive space.”

“If I had to characterize my deepest belief, I would say it’s the centrality of the individual.Institutions are not central. Institutions are different ways of combining skills and capabilities of the moment.”

“When you look at an organization’s core competencies as its most valuable resources, you can begin to think of learning, creating strategy, and innovation as parts of a single long journey. The journey is iterative, interactive, and full of small steps. Nobody gets a big aha one day. Instead, there is searching; there are missteps, experiments, and doubt. … There are breakthroughs, but they happen over a long period of time.”

Credit card fraud and the customer service problem

Credit card fraud is a serious, expensive and pervasive problem -- even as the banks use clever ways to protect transactions (e.g. chips) fraudsters seem to find ways to keep up.

The net result is that many honest card holders have had fraud problems through no fault of their own. We appreciate that the issuers are vigilant in monitoring card use and can move quickly when they believe a card has been compromised or is at risk. In research, I hear lots of people taking comfort from this.

But companies are not always as quick to let the customer know what's going on when they take these steps. The tale of woe sent to me this week by a regular reader makes this clear. An automated message was deemed to be adequate.

Getting the automated message your card has been compromised

Here's a tale of woe from a loyal reader that highlights this issue:

On Monday, Aug. 9, I received an automated voice mail at my cell phone number advising that I was being issued a new card and that as of Aug. 6 my transaction limit was restricted to a maximum of $500. There was no explanation for why this was being done. Just a recorded announcement that was longer than the length allowed by my voice mail and that was cut off.

I can say for absolute certainty that no effort was made to contact me personally because my voice mail response for my cell phone specifically says not to leave a message at that number but to use another number. (BMO MasterCard has my home and office numbers and did not call either. They also have my e-mail address, but did not use that.)

I called on Aug. 9 and asked for an explanation and got the expected party line about how they are looking after my best interests etc etc. (And of course: "We are experiencing a significantly higher than usual call volume...." Do you ever not get that message?)

But here's the thing: On Aug. 5, I checked out from a seven-night stay at an all-inclusive resort and charged more than $3,000 to my MasterCard to pay for the visit. How would I have felt if my credit card was declined at that time over something that I was unaware of. Humiliated and inconvenienced are terms that come to mind.

In May I was in Europe for eight days and I didn't bother to take my cell phone because it doesn't work outside of North America. How would I have felt if my card had been cancelled or restricted during that trip without my knowledge? Humiliated and inconvenienced to the extreme are terms that come to mind.

Would a direct telephone call by a real customer service representative alerting me to what was happening be so hard?  ... After 30 years as a MasterCard and BMO customer I am considering switching to Visa.

My take

The focus on customer acquisition in the credit card industry means free points and bonuses for signing up. You might not be thought so valuable when you have a problem though.

If you have to get a new credit card number, you can plan on changing all those recurring payments yourself. A great example of a situation where you may as well look around for other deals since you're going to be updating everything anyway.

Profitability modeling has taken us to a place where your past real business counts for nothing, and your potential future business counts for everything. How bizarre, how bizarre.

What's your take?

Is anyone doing a good job on this? Do you have your own tale of communication woes over fraud problems?

Products versus services - what's the difference?

From time to time I hear the question raised about whether something is a product or a service. This comes about, I think, because marketers and brand managers in service businesses often refer to products as a matter of convenience. For example, a mortgage product or a vacation product.

However, there are some substantial differences between products and services, which definitely affect how you think about managing both the customer interaction and the marketing generally.

For example, services tend to be perishable in the sense that they cannot be inventoried -- what you don't sell today cannot be sold tomorrow. Consider the impact of this element on airline seat pricing -- it's a huge driver in that industry! 

Service quality is notoriously difficult to control. For example, one lawyer is not interchangeable with another lawyer, even though they may work for the same firm and have similar training.  This is very different from the world of products, where we fully expect two boxes of laundry detergent to be virtually indistinguishable.

I've attached a PDF you can download that gives you some examples as well as some criteria for consideration.

Download a PDF of "Is it a product or a service"