Sun Tzu and Woody Harrleson Help Banks with Revenue Creation
Narrator: He learned strategy by playing chess with his older brother.
Narrator: Kelly Coughlin is a CPA and CEO of BankBosun, a management consulting firm helping bank C Level Officers navigate risk and discover reward. He is the host of the syndicated audio podcast, BankBosun.com. Kelly brings over 25 years of experience with companies like PWC, Lloyds Bank, and Merrill Lynch. On the podcast, Kelly interviews key executives in the banking ecosystem to provide bank C suite officers, risk management, technology, and investment ideas and solutions to help them navigate risks and discover reward. And now your host, Kelly Coughlin.
Kelly: Greetings, this is Kelly Coughlin, CEO of BankBosun, helping community banks navigate risk and discover reward in a sea of risk, regulation, and revenue creation threats.
Today we are going to talk about marketing strategy, tactics, and revenue creation. BankBosun has a program for banks called Tactical Ecosystem Marketing. It is the results of three years of research and discussions with marketing experts and community bank executives. It’s a program guaranteed to generate new revenues from all bank business lines. And get all the banks’ centers of influence – that is those people and companies who influence and recommend banks and bankers – get them fully on board and engaged to help you get new customers. Guaranteed. How you might ask? Spoiler Alert: By primarily promoting them – your clients, prospects and influencers – and their businesses and services - and then secondarily promoting your services and yourself.
In 2014, I started researching ways that complex financial technology or financial services companies could be more efficiently and effectively marketed and closed. I use the terms efficiency and effectiveness carefully and intentionally, because they imply a reduction in time, as in shortening the sales cycle; reduction in expenses, travel, entertainment, and other direct business development costs; and reduction in effort, as in reducing the days, months or years it takes to close a deal. This was the challenge and, believe it or not, I actually figured it out. But first it requires some attention to strategy and tactics and then a discussion on marketing and revenue creation. I have invited my friend Chris Carlson to join us in a few minutes.
You see, Chris is one of my favorite people on the planet. He is a lawyer and an actor. Not one of those Hollywood elite actors though – he lives in South Minneapolis. But I think he has a small part in a movie coming out this summer. Chris has been very helpful to me in helping me craft my message and public speaking skills and style to conform not to dull and boring business standards, but to the stage and theater standards. Not that you need to be an entertainer. I certainly am not. Rather, you need to be your true and authentic self. Chris is terrific with this. So I asked him to help me with my messaging on this. And I thought, let’s do it as an interview and a podcast.
I know you have heard plenty of people talk about strategy…and some business people use strategy and tactics interchangeably. In war, if you do that, it can be life threatening. In business you can sometimes get away with blurring the two with the result ranging from financial and operational inefficiencies to the ultimate penalty in business…death through bankruptcy. I don’t like to blur them. Because I think it is critical to achieving success to define your strategy and constantly be revising your tactics to implement that strategy.
In short, strategy describes the destination and tactics describe the specific actions you will have to take along the way. Generally speaking, strategy doesn’t change that much, but tactics will constantly be adjusted and modified.
When I lived in Seattle, I used to have a sailboat. I loved participating in sailing races. There was one race in the winter of 1985. I think they called it the Frostbite Series. This taught me at the age of 25, the real difference between mission, strategy and tactics. There was some heavy weather on the Puget Sound…probably around 25 knot winds. The mission was to have no more or no less a crew suitable to lead, navigate and operate the boat in that competitive situation and in that weather condition. Round each buoy and finish the race in the shortest time; and win the race.
Before the race we developed our strategy on buoy placements and how we would round them; wind direction and speed and what sails we would need; and the number of boats, competition and the starting line placement and how we would approach the start. In a sailboat race, if you have a lousy start, you will have a very difficult time making up that time lost. Taking too much risk to cross the finish line ahead of the gun and have to circle back and re-cross could cost you five minutes. In a sailboat this can be painful.
Our tactical decisions went something like this. We added one more crew to the boat. We used a starting tactic where we went to the finish line two minutes before the gun, and sailed perpendicular away from the line for one minute. And then we tacked and turned around and started sailing back to the start line. The tactical theory here is that if you sail away from the start for one minute, it should take you more or less one minute to return to the start. If it takes you more, you are late, if it takes you less, you are early. I liked that starting tactic. We decided to not fly the spinnaker because it was so windy. The cost of that decision was a loss in boat speed. But the gain was that we expected others would be more aggressive and fly their spinnaker and either struggle with that during sail changes or perhaps experience a knock down. We adopted a more conservative tactic and hoped our competitors would be more aggressive and get hurt by that. The end result was while we were winning the race, but because one of the buoys had blown free during the gale storm, the race was canceled. We actually chase that windward buoy for about 90 minutes past the original placement of it until they finally notified us by radio the race had been canceled.
This one race taught me so much about the relationship between mission, strategy and tactics. In this race our mission never changed. Win the race. Our strategy was defined at the beginning based on conditions and competitive landscape. But our tactics were constantly being modified and adjusted and corrected to deal with the ever-changing conditions and our competitors’ reactions to those conditions. It taught me to not get caught into myopic thinking about how we win a sailboat race. The concept of not flying our spinnaker seemed so very foreign to me at the age of 25. Now, at 59, it makes total sense.
In 1980 a Harvard business school professor, Michael Porter wrote a seminal article, “Competitive Strategy: Techniques for Analyzing Industries and Competitors". Commonly referred to as Porter's Five Forces. Porter maintains there are five undeniable forces that play a part in shaping every market and industry in the world. If you haven’t created your own, Five Force Analysis, you need to do so. I love doing these things. This will help you determine how to modify your strategy and tactics based on your competitive landscape. And always update it at least annually, if not quarterly.
So in summary, strategy and tactics work together as means to an end. There are a number of good quotes on strategy and tactics. More on strategy than tactics actually, because frequently the same principles in strategy apply to many, many areas including war, sports and certainly business. I just finished reading the book, POWER by Robert Greene. He even claims that there is strategy and tactic in romance. He quotes the 17th century French poet, Francois La Roche Foe Cou. I bet I butchered that name. Sounds a little like….Well anyway…“A reasonable man in love may act like a madman but he should not and cannot act like an idiot.” I love that quote.
Many of the concepts in strategy, apply to many if not all human endeavors. But tactics are more specific to a particular business and industry. There are hundreds of great quotes on strategy and tactics ranging from Caesar in the war versus the Gauls to Norman Shwarzkopf in the first Iraq war. I certainly have a couple favorite quotes on strategy and tactics including this one by Sun Tzu:
Strategy without tactics is the slowest route to victory. Tactics without strategy is the noise before defeat.
But my favorite quote on strategy and tactics especially for smaller banks with limited capital and budgets competing against big banks and big brokers with much bigger capital and seemingly unlimited budgets. It’s a quote by Napoleon, one of the most brilliant military strategists and tacticians, ever. Napoleon said, “The amateurs discuss tactics. The professionals discuss logistics.” I’m going to repeat that. “The amateurs discuss tactics. The professionals discuss logistics.” To me this plays exactly in to my core message in this podcast of revenue creation strategies and tactics that are both effective and efficient. Napoleon is saying, I don’t want to talk about tactical ideas that can’t be implemented, because of logistical constraints…only those we can actually implement. For community banks, this means, let’s not talk about big picture ideas that we cannot afford. Rather, if you have ideas that fit in our budget, then terrific. If not, let’s not waste each other time.
Well, rest assured, if you keep listening to this podcast and other video and audio content we have produced on BankBosun.com you will see or hear that these meet the Napoleon standard referenced above. It is a discussion on tactics that are logistically feasible and reasonable for all community banks.
So with that in mind, I think I have my friend Chris Carlson on the line. I’m gonna start with a quote from a director who actually despised actors…recall Chris is an actor. Let’s see if Chris can identify the source: “I never said all actors are cattle; what I said was all actors should be treated like cattle.” So with that said, Chris time to come to the slaughtering pen…can I hear your best moo cow imitation?
Chris: I’ll try to give you my best moo cow imitation. But I’m first need a motivation. What is my cow trying to communicate?
Kelly: First of all, can you identify the source of the quote? What is the source of that quote?
Chris: I don’t know. It would have to be some sort of director. It can’t be Woody Allen, because he likes actors.
Kelly: Alfred Hitchcock
Chris: Alfred Hitchcock, that would make sense. What is my cow trying to communicate? I mean, because it could be Moo (uplifting). He’s trying to solicit an answer from the other cows. Or it could be Moo (forcefully). Like, move out of the way rancher, because he’s trying to cattle prod me into a slaughtering pen. Or it could be maybe a seductive Moo, that wants to get something going with one of the other cows.
Kelly: Let me hear that seductive one, again.
Chris: Moo, Kelly, Moo. Is that good? I mean. It’s not as good as a pugilist. You can do a good impression of, can’t you?
Kelly: What I thought you would do is just like a Mooooooo!
Chris: Oh wow! See, that’s why I’m in a nationwide movie opens tomorrow and you’re not.
Kelly: Why, ‘cause mine was just too kind of stereotypical?
Chris: Well I don't think they'd put your picture on the poster with Woody Harrelson peeing in a urinal. But they did for me.
Kelly: Did they? What's the name of the movie?
Chris: Wilson. I haven't seen it yet so I can't speak to the quality. But Woody Harrelson is pretty good.
Kelly: Alright that is terrific.
Chris: And I will not be mooing in it.
Kelly: So let's get down to business. Chris you heard my introductory statements, or as you actors call it, a soliloquy. What questions do you have about what I'm doing or how do you want to start?
Chris: As an actor you know I want to know how to make money. But you’ve got these kind of inventive ideas with generating revenue as you call it. So why don’t you fill me in and let me know if I can get in on it.
Kelly: As I mentioned earlier in 2014, I started researching ways that complex financial technology or financial services companies could be more efficiently and effectively marketed. Technology, the Internet, and mobile devices have enabled many businesses to operate more efficiently and effective in my mind…I think of Uber and many other kind of virtual companies. Many of these companies don’t even have a human being available to sell, support or service. They pride their business models on the ability to open up a sales funnel and close a deal without ever having to talk to or “touch” the customer. Those are “air quotes” under touch. Build a technology platform. Offer it to consumers. Make it easy for the consumer to pay for the services. And collect the money and deposit it. And spend more to capture more consumers and more money. No human interaction at all. If any of you have had to deal with Uber for ride sharing or Facebook or LinkedIn for advertising, you know exactly how challenging it is to talk to somebody there. In their minds, they are the perfectly fine-tuned efficient and effective revenue generators.
I use the terms efficiency and effectiveness carefully and intentionally, because they imply a reduction in time, as in shortening the sales cycle; reduction in expenses, as in travel, entertainment, and other direct business development costs; and a reduction in effort, as in reducing the days, months or years it might take to close a deal. This was the challenge and, believe it or not, I actually figured it out.
Chris: Well wait a minute though. I mean hasn’t digital marketing and especially social media don't they help with efficiency and effectiveness. That has to have been a good thing, isn’t it.
Kelly: Well, yes. In part, it has. Here’s how I see it. There really are two ways we develop business relationships: directly to the buyer and indirectly to the influencers of or to the buyer. The combination of customers, prospective customers, and influencers of customers plus the other businesses and individuals that also sell services to members in that ecosystem, comprise the total ecosystem. All require an investment in time, expense, and effort. Social media like LinkedIn has helped us stay easier connected to buyers and influencers. And this ease has certainly helped with efficiency, as it doesn’t cost much to connect on LinkedIn or Facebook. But in terms of effectiveness, it doesn’t quite get it done in that it really just the beginning of the relationships. It’s more like an advancement of the old days of giving somebody a business card and they stick it in their rolodex. And hope they remember you some time. Do you even remember what a rolodex is??
Chris: Yes, I do remember what a Rolodex is. It's a thing you wear on your wrist, right?
Kelly: That would be a Rolex.
Chris: Rolodexes are no longer. How do you parse that problem? What's your way to phrase the big dilemma?
Kelly: The reality is the method by which we initiate business relationship has changed a bit with social media and email. But developing the relationship, hasn’t really changed that much. We make contact. We connect. We get them in the funnel. Then we do some mix of pounding them with emails, and sending them articles about our products and services or information that we think they would find interesting and useful. We might call them on the phone. Maybe get a face to face. There is always a challenge to deliver sufficiently good and interesting content to get the buyer motivated to accelerate their sales cycle with you. And there is always a struggle to keep your product and your company top of mind to the influencers of the prospect. This all takes time, expense, and effort. And also a patient CEO, board and shareholders.
Chris: Well wait, wait, wait. What did you figure out? What did you figure out in terms of efficiency and effectiveness that you were talking about earlier?
Kelly: It was my experience as a sales and marketing professional and as a CEO and manager of sales people and responsible for revenue creation, that sales cycles were dreadfully long; sales messaging was painfully repetitive and uninteresting; and there were constant and continual struggles to come up with a new excuse to call a prospect to see where they were in the sales cycle – hot, warm, or cold; and to make sure the center of influence still remembered you as the go-to company for a client referral or recommendation. We’ve been exploring this and we’ve developed a revenue creation strategy that solves the problem of efficiency and effectiveness. We call it Tactical Ecosystem Marketing.
It utilizes the cost efficiencies of digital marketing, especially audio content that is produced and syndicated on iTunes, google play and YouTube; coupled with connecting with the client on social media and promoting THEM…not you.
At its core, Tactical Ecosystem Marketing is a marketing strategy whose primary focus is not to promote your company and your products, rather to promote your CUSTOMERS’ and PROSPECTS’s company and products. The secondary focus is to promote YOUR business and YOUR products. And the same applies to the Centers of Influence. You focus on promoting THEIR business and THEIR products and a secondary focus on YOUR business and your products. How do you promote them? Through your own audio podcast program.
It delivers high quality content for your sales people to distribute and discuss with your clients and prospects. High quality content for your ecosystem members to distribute and discuss with their clients and prospects. It’s one big fat happy symbiotic ecosystem. Everybody wins.
It’s highly effective. It’s very efficient. It’s very Sun Tzu. You attack your enemies’ weakness and avoid their strengths. This strategy and tactic does just that.
Chris: So, Tactical Ecosystem Marketing is a revenue creation strategy. And the tactics are designed to help community banks create, publish and syndicate on websites, YouTube, iTunes and GooglePlay and all those other things. And they promote all the products and services of the bank’s ecosystem, as well as its members.
Kelly: Yes, Chris. It’s kind of like Tactical Ecosystem Marketing is a way a community bank can pay it forward and in return good things will happen. Well, we're up to the twenty-minute mark. Is there anything you want to add about what you're doing with Narrative Pros these days with you, Chris.
Chris: We're just trying to help people like you Kelly make their point and connect with their audiences. Some people don’t have the gift of gab like you. So, what we do is we try to help them come up with a clear way of conveying their message and do it in an authentic and genuine way. Unfortunately, you do not have need of our services. You're a master and we respect that.
Kelly: Hmmmmm, I don't know. I think I have paid you a few dollars over the years to help me Master those skills though.
Chris: That's true. You're one of our star pupils, so I will accept that.
Kelly: Chris, I appreciate your time. Take care of yourself.
Chris: You too!
.Narrator: We want to thank you for listening to the syndicated audio program, BankBosun.com The audio content is produced and syndicated by Seth Greene, Market Domination with the help of Kevin Boyle. Video content is produced by The Guildmaster Studio, Keenan Bobson Boyle. The voice introduction is me, Karim Kronfli. The program is hosted by Kelly Coughlin. If you like this program, please tell us. If you don’t, please tell us how we can improve it. Now, some disclaimers. Kelly is licensed with the Minnesota State Board of Accountancy as a Certified Public Accountant. The views expressed here are solely those of Kelly Coughlin and his guests in their private capacity and do not in any way represent the views of any other agent, principal, employer, employee, vendor or supplier.