Bank CEO’s should spend more strategy time on the softer side, in the Last Mile.

By September 17, 2014Retail in the Know

targetYou know that one man or woman in the bank that always gets the “touchy feely” jobs? The go-to person that lurks somewhere deep in Marketing or Customer Service that gets things like the Senior Cookie Day? Who knew – they may well have one of the most important jobs in the bank. Because they engage the community.

Executives are more likely to deal with hard ball banking topics like credit risk, compliance, interest rates, big commercial deals, M&A, while delegating the soft ball topics. Times might need to change.

This strategy keeps the bank safe, sound, and hopefully profitable, and this is definitely the box inside which the regulators want CEO’s firmly sealed. But there’s a world outside that box where the crowd and web dominated economy makes their buying decisions these days – in the last mile between the bank and the community. It’s the space where mushy things like customer feelings live. It’s where their friends are and where they talk about their bank with good or bad stories. It’s where businesses and individuals decide which bank to approach, and where they will pick their financial partner. For something so important, it’s surprising that executive bank meetings so rarely talk about them.

Bank Marketing departments often miss the last mile too, mostly because they’re not expected to worry about touchy-feely things either. The bank starts with a set of possible products – all of them nearly identical to ones already in the market. Finance tweaks the maturity, rate, and profitability parts of the product to be what they want to fit best into the bank portfolio. The Last MileALCO confirms it. Marketing gets it delivered to them, and their contribution is to place messages in front of exactly the most likely customers to buy it.

Marketing spends a lot of time preparing data to show that yes, this product with this marketing will target this customer segment. They use demographics like age, family, geography, and income to estimate desire and ability to buy. The resulting graphs and analyses sure look masterful in meetings. But they look foolish when considering how little effort there was to make the actual product cater to the complex, multi-faceted emotions that go on inside a potential buyer’s head. Want proof? Look at whether your own employees buy the products – if your employees aren’t lining up to buy, there’s something missing.

Imagine a product that was so irresistible that people came in to buy it having never seen an ad. It would have to be sensational in some key ways that attract people on its own, because of what the product means to them, how it is delivered, what value they get out of it beyond a bank account. Better yet, the promotion in the market should give something of value to all who see it, even those who have no interest in the bank product. This is “last mile” thinking applied to new product development.

Getting confused about all this touchy feely stuff? Here are some of the places where “last mile” strategies come into play: Branch Interactions at every level, Call Center conversations, Strategic Philanthropy, Complaint Management, Content Marketing, Customer letters and notices, Employee community efforts, Marketing Collateral, Advertising, Community Events, Social Media, and probably most importantly, product design that creates an experience that’s delightful in every interaction.

No more delegating – it’s time for the CEO to point strategy directly at the last mile. Ask yourself if your strategy is being executed for the benefit of internal departments like Finance, Risk Management, or Compliance, and not the customer you’re aiming to bring in. Start with an assessment of all your Last Mile customer facing activities and see for yourself where you need to change emphasis. Make sure you bring potential customers into that discussion, and don’t let Finance and Risk dominate the meetings!

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