This week Andera published a case study on one of our clients, the $1 billion asset, Massachusetts-based Hanscom Federal Credit Union. When explaining why Hanscom onboards each new member with a personal letter and phone call, Hanscom’s Senior Vice President of Strategy and Delivery Scott Post offered this quote:
“We’re nobody. We’re just someone they picked out of the crowd. This is what I call the canned peas moment. When you think of brands of canned peas you think of Green Giant, Del Monte, whatever, you don’t care, they’re canned peas. It’s like that with financial institutions. We are not a Wells, we are not a Citizens, so we have to work harder to let people know that we’ve got as many if not more services than they do, we just don’t have the billions of dollars in marketing to put them out there.”
I love this quote. It explains why Hanscom is exerting extra effort to connect with members, and uses an awesome metaphor to neatly describe the biggest problem financial marketers face today: indifference. Consumers care about their financial institution about as much as they care about the brand of canned peas they buy at the grocery store, which is to say, not a lot.
Hanscom believes that adding a human touch to a killer suite of high tech services will solve the indifference problem and help them climb to a higher wallet position. With existing members their strategy seems to be working, but underlying Posts’ quote is a harder truth. There really isn’t any way to make your canned peas taste THAT much better. Del Monte and Green Giant might both claim to be the best, but steam ‘em with some butter or stick ‘em in a casserole and they’ll both taste pretty much the same.
That’s not to say it’s impossible to make your peas taste better. When I go up to my great aunt’s house in northern Vermont and pick fresh green peas from her garden, shuck them, and steam them myself, those peas taste FREAKING AMAZING. If those peas were available in the grocery store, I would pay twice as much for them, easy. But there is a reason that I can’t have those peas every day. Getting them to my table in Rhode Island is hard, and requires more coordination, more technology, and more resources than even the behemoth American food industry can provide.
The same is true of banking. It’s relatively easy to build a nice branch, offer a great free checking product, or have good customer service, but doing all three things at once is hard. In the past few years a number startups have burst onto the scene saying, “We’re going to revolutionize banking!” or “We’re going to revolutionize payments!” Guess what, they haven’t, or at least not nearly as quickly as they wanted to. If it was easy, someone would already be doing it. (Sorry Simple, it’s just not that simple.)
Every once in a while someone does break away with a product or service that is truly better than the rest. But if your only strategy is to become the best, chances are you won’t be around for long. If you can’t get people to buy because you’re better, I see three ways to get people to buy your green peas:
1. Be cheaper.
Do what everyone else does, but a little bit more efficiently, and knock a couple points of your lending rate. Wal-Mart became a multi-billion dollar company not because it sells better things, but because its sophisticated inventory system and uber-efficient back office processes allow it to sell things for a little bit less. In banking, this means tightening up your procedures and using technology to automate where possible.
2. Have awesome packaging.
I’m tempted to let this image speak for itself, but to spell out the metaphor, I mean differentiate yourself by doing an awesome job with your branding, messaging, and marketing. Nowadays the single most important place to put forth your best packaging is, of course, your website.
3. Get to them first.
The easiest way to get consumers to choose your financial institution is to get to them first. (As they say in retail, “eye level is buy level.”) By “get to them first” I don’t mean get them to notice your sign first, or walk past your branch first, I mean get them to apply to your institution first. A billboard on the highway is useless if it never results in a new deposit or loan application. Unfortunately getting consumers to apply to your institution first isn’t as easy as placing a can of peas on the right shelf. You need to understand where and how consumers shop and select financial products, and use that information to create your messaging and put it in the right place. We think about this problem a lot; for some ideas, check out the resources section on www.andera.com, or download the full Hanscom case study here.
Melanie is a member of the first class of Venture for America, a two-year fellowship that seeks to revitalize American cities through entrepreneurship by matching recent college graduates with start-ups.You can reach her at firstname.lastname@example.org or on twitter @mfriedri.