Archive for March, 2012

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Stop When You Get to Yes!

March 29, 2012

That’s classic sales management advice, yet I have seen countless sales professionals ignore it at their peril.

The advice applies outside of sales too, and I just witnessed it yesterday in a whole new context on my flight to San Francisco.

We are all buckled into our (relatively) comfortable exit row seats and the flight attendant had just finished giving us the instructions for operating the doors. As per FAA regulations, she said that she needed to make sure that each and every one of us understood the instructions and that we were ready, willing and able to assist in the event of an emergency, and then she began checking with us one by one.

When she motioned to me in the window seat, I looked her in the eye and said “Yes”, as did the poor guy stuck in the middle seat next to me.  When she turned  to the man seated in the aisle seat, he looked up quizzically and said “Hmm?”.

The flight attendant asked him again if he understood the instructions and if he was ready, willing and able to assist in the event of an emergency.

The passenger replied in a thick accent “Yes. My English is not that bad”.

The flight attendant replied that she was concerned that he might not be able to understand instructions in the chaos of an unlikely emergency and that she was going to have to move him to another seat.

He protested with a few sentences in fluent, if heavily accented, English; trying to assure her that he did understand.

It was too late. the flight attendant had to make a judgment call on the potential safety of passengers, so she moved him.

The guy in the middle seat shrugged and slid over into the now vacated aisle seat, giving both of us the next best thing to first class– reclining exit row seats with an empty middle seat between us.

He knew how to stop when he got to yes.

And I did too.

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Preview: Bank Innovation Conference

March 28, 2012

Here’s where to find me the next couple of days while I’m at the Bank Innovation conference in San Francisco. I’ll report back next week with implications on the intersection of leadership, advice and technology.

Wednesday, March 28, 2012

Session 1:  What Is “Banking” Today?  A Debate on the Future

  • How can banks realize the dream of “holistic” banking considering legacy challenges
  • What do the most successful start-ups tell us about the future
  • Which conventional wisdoms about the future of banking are wrong
  • How does the branch and ATM fit into the concept of the Future Bank?

Panelists:

Noah Breslow, Chief Operating Officer, On Deck Capital

Shawn Budde, Co-Founder & Chief Risk Officer, ZestCash

Dan O’Malley, Founder & CEO, PerkStreet Financial

Jeff Stephens, Founder, Tribed and CBC

Session 2:  New Product Strategies & Possibilities

  • Where the consumers are, now
  • Innovations worth noting and ones worth ignoring
  • How CFPB and Dodd-Frank realities color product design
  • The future of PFM
  • How should “commerce” integrate with “banking”

Panelists:

Philip Jenkins, Chief Operating Officer, Strands Finance

Rafael Lopes, VP, Sr. Product Manager – International Products & Digital Channels, City National Bank

Iker Marcaide, Founder, Peer Transfer

Todd Sandler, Head of Product Strategy & Deposits, ING Direct

James Shanahan, President, Shanahan & Associates, LLC

Josh S. Turnbull, Managing Consultant, Advisory Services,  Center for Financial Services Innovation

Session 3:  Social Banking Without Being Insecure or Annoying

  • Elements of an effective Twitter strategy
  • The mobile piece explored
  • Is it possible to successfully leverage location apps?
  • How does banking become a part of the social media experience?

Panelists:

Kimarie Matthews, VP of Social, Wells Fargo

Josh Reich, CEO, Simple Finance Technology Co. / BankSimple

Eric Rinebold, Industry Principal — Digital Engagement, Infosys

Thursday, March 29, 2012

Session 4:  Channel Agnosticism: Being Everything to Every Customer

  • Getting more consumers to embrace innovation
  • Usage trends
  • Overcoming the challenge of balancing customer wants and legacy system realities
  • Can branches be maximized?
  • What are the operational challenges that need to be overcome in order to be truly channel agnostic?

Presenters:

Ginger Schmeltzer, SVP, Digital Channel Management, SunTrust Banks

Geoff Knapp, Vice President, Online Banking & Consumer Insight, Fiserv

Julie Milbrand, Vice President, Community Banking, Internet Services Group, Wells Fargo

Session 5:  Separating Digital Wallet & Mobile Payment Fact from Fiction

  • One wallet or multiple wallet platforms? What level of integration can we expect or is necessary?
  • What’s out there now? What’s on the way? Where does NFC fit in?
  • Loyalty, points, rewards and virtual currencies
  • The future of cashless payments

Panelists:

Bill Clark, President, Spindle

Mark Fischer, Chief Executive Officer, Inspire Commerce

Michael Garelik, Financial Services Innovation & Mobile and Alternative Payments Specialist

Omar Seyal, Co-Founder, Tagstand

Eric Remer, CEO, PaySimple

Session 6:  Shop-aholic: Integrating Banking Into a Better Shopping Experience

  • Rewards and banking
  • Payments platform implications for bankers and retailers
  • Where do ATMs fit in?
  • How the digital wallet fosters better retailing?

Panelists:

Marc Caltabiano, VP Marketing & Products, Cartera Commerce

Lewis Gersh, Managing Partner, Metamorphic Ventures

Samir Kothari, Co-Founder, Truaxis

Brian Rigney, VP & GM Business Solutions, CashStar

Session 7: The Organic Online/Offline Twitter Ideastorm

  • During this session, we’ll undertake a good, old-fashioned brainstorm, but using newfangled social media with ideas aired live and via Twitter converging into a dynamic blend of innovation and a glimpse of the future.

Session 8:  App Crazy: Postcards From the Edge of Digital Banking

  • Why certain apps work, and certain apps suck
  • App update by device
  • What’s the next new-new thing?
  • Smartphone vs. tablet vs. both

Presenters:

Eric Connors, SVP of Products, Yodlee

Joe Adams, Managing Principal, Hampton Pryor Consulting

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Why Should Your Clients Trust You?

March 27, 2012

In my March 24 post (Want Client Loyalty? Do Something You Don’t Have To Do) I wrote about trust being the number one driver of client loyalty, and how important it is to put your clients’ needs before your needs and your firm’s needs.

But what is trust and how can you increase it?

My favorite definition of trust is the formula given in the book The Trusted Advisor (David H. Maister, Charles H. Green and Robert M. Galford):

(Credibility + Reliability + Intimacy)

__________________________

Self Interest

Let’s break that down from the client’s point of view:

Credibility = You know what you’re taking about

Reliability = You do what you said you were going to do

Intimacy = You have taken the time to really understand me

(All divided by)

Self Interest = You give the appearance that you are more interested in what’s in it for you that what’s in it for me

Notice how the the elements in the numerator are additive, but even their combined effect are quickly diminished by the single element in the denominator.

Think of the stereotypical sleazy used car salesman in the loud plaid sport coat:

Even if he knows every feature and benefit of every model on the lot and is a 10 out of 10 on credibility…

Even if he followed up on every question and returned all of your calls promptly and is a 10 out of 10 on reliability…

Even if he asked great questions about what you were looking for, who would be the primary drivers and how much you wanted to spend, so you’d have to give him a 10 out of 10 on intimacy…

…You just couldn’t shake the feeling that he had x-ray vision that saw through you directly to your wallet. Unfortunately, he’s also 10 out of 10 on self interest.

Let’s do the math:

(10 + 10 + 10)

             __________    =  3

10

A final trust score of 3 out 10 is a far cry from being a trusted advisor. Even though our salesman was best in class in three out of four factors, it hardly matters if his customers feel like they can’t trust him.

So…

Even if you know everything there is to know about the economy, the investment markets and every nuance of financial and estate planning…

Even if you have flawless execution in transactions, reporting and follow-up…

Even if you have assiduously documented every personal and financial fact and nuance about your clients in your comprehensive CRM system…

…you will not have long-term success if your clients don’t feel like they can trust you.

Why should your clients trust you?

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Is Bank Merger Mania Imminent?

March 26, 2012

The results of the Federal Reserve’s recent Comprehensive Capital Analysis and Review (CCAR) stress tests have increased the long running speculation that another round of rampant bank mergers may by just around the corner. The number of banks in the U.S. is about half of what it was in 1990, and I don’t see anything changing that trend line.

The most recent spate of bank failures peaked in 2010 with 157, and despite all the headlines, this was significantly lower than the prior peak of 281 failures in 1990. But the primary driver of consolidation in the industry over time has actually been mergers, not failures. Merger activity increased every year from 1992 to 1995, peaking at 606 that year. During that run-up, the number of mergers ranged from 3.7% to 6.1% of the total number of banks.

In 2011 there were only 167 mergers, equal to only 2.8% of the total number of banks, so it would appear that there is plenty of room for additional consolidation. Stubbornly difficult rates of unemployment, housing prices and loan demand make it challenging to achieve decent ROE growth, and the stronger banks have significant advantages over the weaker ones.

Worse, all of those banks competing (all too often on price alone) for a larger share of a slow growing market will likely cause further margin erosions. And again, the stronger banks are better positioned to withstand these pressures too.

Serge Millman of Optirate recently noted that banks are battling with 27 competitors in a typical market, and that 66% of all deposits are held by banks competing in regions with 50 or more competitors!

Since 1990 there have been an average 6.5 mergers for every failure, more than triple the 2011 rate of 1.8 to 1, and the peak of the last cycle was a whopping 598 to 1 in 1997.

Throw in the hassle and expenses of complying with the hundreds of new rules coming out of Dodd-Frank (most of which are nowhere near finalized), and it isn’t hard to imagine many bank directors deciding to sell in the not-too-distant future.

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Want Client Loyalty? Do Something You Don’t Have To Do

March 24, 2012

In my March 17th post I quoted from the research of industry expert Mike Kostoff. Mike has been a consultant to some of the world’s leading wealth management firms for over twenty years, and he noted that the drivers of client loyalty to a firm differ than the drivers of client loyalty to an advisor.

The number one driver for loyalty to a firm is quality of advice, but two other factors rank higher as drivers for loyalty to an advisortrust and proactive communication.

The most important element of trust is putting the clients’ interests above the interests of the advisor and firm. A very powerful way of demonstrating this is by doing something you don’t have to do.

When training and coaching others on how to build trust, I often relate some of my favorite personal stories of how others have won my loyalty by doing things they didn’t have to do:

  • The car dealer who insisted on talking me through a simple repair over the phone to save me the cost of an expensive long distance tow and repair bill. I bought four cars from that dealer and serviced five there over the years.
  • The janitor cleaning the restroom at Disney World who inquired about my daughter’s minor head bump, then quietly sent a stuffed animal to arrive at our room before we did. We have been back four times since.
  • One of my favorite restauranteurs who randomly deletes entrees from my bill and then applies a 20% discount that wasn’t requested or expected. It’s not about the money, it’s about demonstrating thoughtfulness, appreciation and generosity. I recommend his restaurant all the time.

Now I have a new experience to add to the list.

Last week the dreaded day arrived to put our fifteen year old Chocolate Lab to sleep. The back half of Molly’s body had stopped working a few months ago and we had been carrying her around when she needed to eat, drink or eliminate; but she couldn’t scratch herself, she couldn’t seem to find a comfortable position any more and she had started to whimper in pain and frustration.

We didn’t want her to suffer and we knew it was the right thing to do, but it was still a painful day.

We love the whole staff at our veterinarian’s office and they had come to know Molly well through her frequent visits and boardings.

Our loyalty to the office rose to a whole new level when we received a sympathy card from the veterinarian who gave Molly her last injection.

Then another card arrived from Molly’s usual vet, who was out of town on Molly’s last day.

Then we received this card, signed by the entire staff:

The clinic didn’t have to send any cards at all, and I would have still felt very good about the quality of care and the people we deal with on a regular basis.

By the way, we switched to this clinic from another veterinarian who was competent and personable, but it felt like he was always finding a way to sell us another service or product.

We were happy with our new clinic even though they were 5 times further away than the old one, because we didn’t get that feeling. I’m not sure we even saved any money.

But now that they have demonstrated their empathy and concern during our darkest moments, now that they have connected to us in this very emotional way, what are the chances we will ever consider another veterinary clinic?

The pressures to grow assets and revenue today are very real, and doing little things for your clients without revenue is not a quick-fix solution. It requires patience, genuine care and a commitment to build your practice for its long-term value.

But that’s why you’re reading this, isn’t it?

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Put Your Hand Up, Not Out

March 21, 2012

Thanks to everyone who had comments on my March 6 post Free Advice From a Mentor, I have had some stimulating conversations.

One person who knows me well was surprised that I didn’t include one of my other oft-repeated golden rules: “Put your hand up, not out.”

I often advise others that they should seek more responsibility, not more pay.

Putting your hand out– asking for more pay because you want it, because you need it, because you’re worth it and doggone it, people like you– doesn’t create a value exchange for your boss or your company.

At least not a sustainable one. You might whine your way to one raise, but that’s rarely a repeatable strategy.

Putting your hand up– to volunteer for more responsibility, to help a colleague swamped with a huge project, to ask your boss if you can take a few things off of her plate– makes you immediately more valuable.

And it makes you the kind of person people want to help be successful.

Have faith that your generosity and increased value will be rewarded (or “monetized” in today’s e-parlance) in due course.

You may have to be a little patient about that. Don’t expect an immediate quid pro quo.

If you are convinced that your efforts will go unrewarded, you are in the wrong job, working for the wrong boss or at the wrong company. Maybe all three.

If that’s the case, a raise isn’t going to make it any better. Trust me.

Otherwise, take a chance.

Put your hand up.

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Best Ideas from the Best of the ABA

March 17, 2012

After exploring my inner geek the week before at the Microsoft Research TechFest2012 and the GeekWire Summit, it was time to put the pinstripes back on this past week (figuratively, at least) as I headed to Scottsdale for the American Bankers Association Wealth Management Conference.

There were more suits and ties and fewer jeans (and no North Face or Marmot jackets), and more pads and pens and fewer iPads and utlrathin notebooks, as I might have expected. I didn’t have live Twitter conversations about the carpeting that looked like QR codes; but just like last week, I still found some bright and engaged people trying to navigate turbulent and uncharted waters to engage their customers and grow their business. Here are the highlights:

Best quote:

“Watching the stock market last year was like watching a chicken try to fly.  

Too much ballast and not enough lift.”

–  Dr. David Kelly, Chief Market Strategist, J.P. Morgan Funds

Back to the Future: 

Go back 10 years to 2002– the key question was when to get back into technology stocks? No one was asking about REITs, commodities, emerging markets, gold, or any of the things that have outperformed since. U.S. stocks have out-performed BRIC (Russia, Brazil, India and China) for 4 years straight, but no one is interested.”

Richard Bernstein, founder, CEO and chief investment officer,

Richard Bernstein Advisors, LLC

Ready and Willing, but Unable?

“Fifty percent of high net worth clients are willing to interact with their advisors via mobile, but only 18% have it available to them.”

 –Eileen VanScoy, Executive Vice President of Product Management, SunGard

What Drives Client Loyalty? It Depends:

What Drives Loyalty To Advisors:

  1. Trust
  2. Proactive communication (1x/month)
  3. Quality of advice

What Drives Loyalty To Firms:

  1. Quality of advice
  2. Service
  3. Value for money

(Note that clients think advice is a firm’s responsibility- Top driver of loyalty to the firm, third driver of loyalty to the advisor)

Michael Kostoff, Partner, WISE Gateway LLC,

former Executive Director of the VIP Forum

What Drives ‘Brand Love’ and Trust?

  • Integrity
  • Intent
  • Capabilities
  • Results

Define the desired service experience, make culture a verb and make sure everyone in the organization understands and lives the desired experience as “The way we serve”:

  • Starbucks- the “third place”, as comfortable as your living room.
  • Ritz Carlton- re-create the home of loving parents.
  • Zappos- “wowful happiness”

Joseph Michelli, PhD,
Author and Organizational Consultant

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