Video Transcript
Rokture Ramblings – Episode 12 – Differentiation
Hello everyone, and welcome to Rokture Ramblings, where I discuss topics around digital
marketing, marketing technology, and marketing operations for the financial services industry.
My name is Fernando Pena, and I’m the founder of Rokture, where I can help you master the digital
channel and help your organization grow. So today’s topic is taking us a little bit further
back to the fundamentals of marketing. And that topic is, how can I differentiate my business
from the competition? And this is a common issue, one that I see a lot of organizations still
struggling with, and not really able to overcome this point of differentiating anywhere within
the market. So what we’ll be going over today is the reality of financial services, what most
institutions do, how to differentiate value being the key, and also getting different viewpoints.
00:00:49 Speaker 2
So first things first is that the financial services reality. The fact is, is that financial
products and services are commodities. There’s really very little that differentiates what
one institution offers over another. Now there may be some nuances in terms of terms and conditions,
or maybe some product features, but for the most part, a checking account is a checking account.
A loan is a loan, a credit card is a credit card. So what are institutions doing in order to be able
to rise above the masses and really differentiate themselves? And that’s the big question
here. There’s very little competitive differentiation. So as I mentioned before, aside from
rates, what else can you really compare yourself against when in the eyes of a client? And that
is a big concern. The other thing is, is that digital has created more client indifference.
And what I mean by that is that in the past, when you had branches being your primary means of customer
touch points, you had personal relationships
00:01:44 Speaker 2
that were being built. And as a result of that, somebody might have an affinity for an individual
that works in your institution. With digital, however, and it’s just an app, and an app is an
app, there’s really no differentiation between yours and someone else’s, with the exception
of maybe the ease of use, the overall client experience. Those are things that you can build
upon, but realistically, it’s a very small thing to grasp, and there’s not as much of a bond as
there was with those personal relationships. Which takes us to the next point, which is that
personal relationships and in -person touch points have become secondary. So how often do
customers visit branches? It’s not very often in most cases. You may have a core of a segment
of your population that visits quite often, but the majority of individuals do most of their
banking virtually. And as a result of that, it’s very difficult to build that bond, and again,
differentiate yourself from all the competitors that are out there
00:02:40 Speaker 2
in the digital landscape.
00:02:46 Speaker 2
So what do most institutions do? Now, if you think about most institutions, look at this picture
on the left here. If you are a beige button of an institution, then how are your customers going
to be able to tell you apart from all the others? It’s very difficult. And so I think this illustration
or this picture is a perfect illustration of what I’m trying to get to. Most institutions talk
about how wonderful their service is. Now, that’s great, but the problem is when you go back
to one of the points I made in the previous slide, they’re not having these personal relationships
much longer, the clients. And so the only time that the wonderful service becomes an issue is
if your competitors have their call centers offshore, and that experience leaves a lot to be
desired. So maybe that’s something that you can play upon, which we’ll get into in later slides.
They also emphasize ties to the local community, and again, that is a slight point of differentiation,
but how is that going to help
00:03:41 Speaker 2
me as a customer get the best rate on my mortgage? And what is that going to do in terms of me being
able to access my money that is housed within your institution? So it’s a nice history, but it’s
not something that you can hang your hat on. They discuss the long history of the organization.
Some clients may care whether their grandfather banked with you or not. Others, again, it’s
not likely to really affect them, and it’s not likely to really create that sort of loyalty that
you’re looking for from your institution. It really has to be you’re addressing one of their
challenges and one of their obstacles, which I’ll get into in the next slide. The last one is
attempting to compete with pricing or special offers. The danger with this is that you end up
with the types of clients that are just looking for a deal. And so I think it’s Grant Cardone that
had a quote that said, there’s only one lowest cost provider. And so ultimately, if that’s not
you, then you’re really just second place when
00:04:42 Speaker 2
it comes to chasing that type of strategy. And again, I’ll get into that a little bit more in subsequent
slides.
00:04:51 Speaker 2
So how do you differentiate? So the first thing is that with a small institution, whether it’s
a community bank or a credit union, you are likely locked into a specific area. And so with that,
you can look at where you have the most opportunity. So whether that’s a segment of the population,
whether it’s a certain type of product that you really try to focus on. So it could be, for example,
small business owners in a certain geographic area. Focus on them and now try to build products
and services that align with their, which is the next point, pain points and grievances. So
what is it that these small business owners are just completely sick and tired of the other institutions
and how they treat them? It could be lack of ability to get in touch with someone. It could be maybe
that the underwriting standards are too high. It could be that maybe they’re a business that’s
on the no business zone when it comes to your underwriting standards. There’s a number of different
plays here, but you
00:05:51 Speaker 2
have to find a spot that is being underserved and try to figure out how you can best serve them.
And that’s the way that you differentiate yourself. So unfortunately, it can’t be everything
to everyone. That’s what the big banks can do. But with a small institution, you have to really
focus on a segment and just go all in on that segment. Focus on messaging that addresses challenges
and results in a positive outcome. So let’s go back to that call center example that I had before,
which is that you call the call center. You’re now going, you’re on hold for 45 minutes with another
bank. And so unfortunately, you’re not able to get your issue resolved. It has to be escalated.
A case has to be written, etc. So focus on messaging how, okay, our call center is local. We have
real bankers on the other end of the phone, and we will resolve your issue 90 % of the time on one
call. That can be a positive outcome. Also make it clear that you’re the potential outcome if
they don’t go with you. So maybe
00:06:53 Speaker 2
on the flip side, your messaging can say, well, if you don’t go with us, then you’re going to be
spending a lot of time with offshore call centers. And we’re not sure how much you like to do that,
but that will be a better part of your day if you have some sort of customer service issue or challenge.
So make it clear that these are the consequences if you don’t go with us. And that’s something
that, again, resonates with them and helps to differentiate you from all the other sort of generic
messaging. And then relay your message or post your message, whatever you want to consider
it, where your potential clients are. So if you’re trying to chase the sort of younger crowd,
then you’re going to have to do something digital. If you’re trying to differentiate yourself
from other competitors that don’t traditionally use like direct mail, maybe that’s the approach
you have to use. It may be that certain business owners, for example, are spending a significant
amount of time at certain trade shows.
00:07:45 Speaker 2
And maybe that’s where you want to make sure you have a representative. So just make sure that
your message, it can be as clear and as perfect as possible. But if it’s on the wrong channel,
you’re not going to get very far. So make sure that the channel resonates with the intended audience.
00:08:02 Speaker 2
Value is key. So I talked about price before and that you don’t want to necessarily do that race
to the bottom, which is being the lowest cost provider. So price is important, but what’s more
important is value. And the value that you provide to your clients is going to create those long
lasting relationships. So if you are throwing offers out there for free money or teaser rates,
then essentially what you’re doing is you’re attracting the type of clientele that are going
to take advantage of that. And unless something now convinces them otherwise, they’re going
to leave as soon as that promotional time period is done. It’s easy enough to do that, and that’s
likely what they will do. However, if you go about it a different way and convey the value that
you’re providing to them, and that value could be not only monetary, but there also could be
some service based value, then it does help to build a longer lasting relationship because
they’ll say, okay, well, even though this might cost me
00:08:54 Speaker 2
a little more, it’s saving me so much more in aggravation that it’s worth this higher cost. So
that ends up with less churn on your part. And also on top of that, you end up with potentially
more revenue because that client is seeing the value in your services and is willing to pay a
little bit of a higher price. Along those same lines, the best deal may end up actually turning
away some clients. So a lot of times when you see a tremendous deal, whether it’s a lower cost
solution or a higher rate of return, then automatically the thought in the back of your mind
is that, okay, well, what’s the gimmick? What’s the gotcha? How am I going to get sort of taken
away from what I’m looking for initially by this offer? And so that best deal may turn off your
good customers. And in that case, you end up with individuals that again, are just looking for
the deal of the day, and then they’ll churn at a later point in time. Next one is really important.
And unfortunately, with a lot of small institutions,
00:09:53 Speaker 2
you don’t have a lot of control over this, but that’s that acquisition is only the first step.
So you might have this great acquisition strategy and everything looks great. The experience
is just a tremendous experience. But unfortunately, the operational experience doesn’t
match. And so there’s a tremendous sense of disappointment and also expectations that are
not being met by the client or for the client. And what I mean by that is that once you get into like,
let’s say online banking, if it’s still two or three generations behind what most of the industry
is using, it’s going to be noticeable. And that’s going to unfortunately cause problems for
you in the long run. Now, that’s a lot more difficult to address because these core systems require
significant energy and time and effort and money to upgrade. But it is something that is really
important because, again, most business is being done digitally now. So you want to make sure
that you are removing the obstacles to get onboarded.
00:10:49 Speaker 2
That means digital onboarding and also removing the obstacles of ease of use. So very important.
I know it’s a challenge, but it’s something that really needs to be held in high regard and considered
a high priority for your institution. Otherwise, you are bound to fall behind. And then the
last one is always ask for referrals. So great salespeople always do this, but I think as an institution
as a whole should do this as well. Your best customers are likely going to come from your existing
customers because they will be associating with those that are similar to them. And that’s
your key clientele. So always ask for the referral. Always make it easy to get referrals. And
also you could potentially make it a benefit to those who are referring to you that they get additional
product services or compensation of some sort. And again, I know there’s some restrictions,
but within whatever guidelines you have to abide by in order to be able to make that happen on
your behalf.
00:11:47 Speaker 2
Getting different viewpoints. So I know that this is very difficult to sometimes change the
mindset of messaging from a marketing perspective. So oftentimes I look at client surveys,
for example, what bothers them? Those grievances and pain points are things that you can now
incorporate into your marketing and use the previous examples that I gave where you present
the problem, present the solution and also demonstrate the potential downfall if they don’t
go with your solution. And I think that should resonate with your audience. Also take inspiration
from other industries. So banking, unfortunately, and well, financial services in general
is a very conservative in terms of making use of innovations and also marketing methods. Now
that’s not to say that you can do exactly what like, let’s say a retailer does or an in the entertainment
industry, but you can take cues and inspiration from them and sprinkle that into your marketing
message and the way that you go to market when it comes to
00:12:45 Speaker 2
getting the word out about your services. And then finally make use of professional partners,
whether it’s an agency, a consulting fractional chief marketing officer like myself, where
they will be able to bring in some fresh ideas and also act as a sort of outside expert where those
who are working for you or your stakeholders may take those viewpoints with a little bit more
authority, so to speak, than if it’s just being suggested and passing internally. So that’s
an opportunity there to bring in some new ideas and also someone who has been able to get this
done in the past and is able to make use of frameworks and best practices that have already been
proven. So that concludes today. Here’s my bio and contact information. If any of this interests
you, then these are the ways to get in touch with me. Or if you would just like to talk about the
state of marketing and what’s the most effective use of digital and other marketing methods
within your institution. So thanks again for listening
00:13:48 Speaker 2
and watching this video. Until the next time, have a good one. Bye -bye.