BankBosun Podcast | Banking Risk Management | Banking Executive Podcast

BankBosun is a biweekly syndicated audio program that provides the multi-tasking bank C-suite officers ideas and solutions from key executives from all types of businesses operating in the banking ecosystem. BankBosun provides relevant ideas and solutions clearly, concisely and credibly to better enable them to navigate risk and discover reward. 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, 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 rewards. Kelly earned his undergraduate degree (BA) from Gonzaga University and a master’s degree in business administration (MBA) from Olin Graduate School of Business at Babson College in Wellesley, MA. Kelly lives in Edina, MN.
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Jul 3, 2017

Bank Marketing Ideas in One Page by Alan Dib, Best Selling Author

Introduction: False facts are highly injurious to the progress of science, for they often endure long; but false views, if supported by some evidence, do little harm, for everyone takes a salutary pleasure in proving their falseness.  And when this is done one path towards error is closed and the road to truth is often at the same time opened, Charles Darwin.

Kelly Coughlin is CEO of BankBosun, a management consulting firm helping bank C-Level officers navigate risk and discover rewards.  He is the host of the syndicated audio podcast,  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, provide bank C-Suite officers,  risk management, technology and investment ideas and solutions to help them navigate risk and discover rewards, and now your host, Kelly Coughlin.

Kelly: Greetings, this is Kelly Coughlin, CPA, CEO of BankBosun, helping bank C- suite officers navigate risks and discover reward in a sea of threats and opportunities. 

One of my favorite quotes of all times is attributed to Pablo Picasso “Good artists copy; great artists steal.”  There is no better example of the quote I selected for this opening from Charles Darwin. He distinguishes between false facts versus false views. And there is no better example in the business world demonstrating the importance of distinguishing between false facts and views versus true facts and views than in the marketing world.  That is the world of client acquisition, client retention and revenue creation. 

Today is an outright theft from the experience I have learned from others and their success and failures and through my own successes, and more from my own failures over my 25 years of experience in competing for revenues.

Why revenues?  Well, I have been in the workforce for 25 plus years as director of risks, a consultant, a CEO and CPA and of all the technically challenging   brain burning problems I have had to face in my career, by far, I can honestly say, the most challenging and frankly interesting part of the business world is marketing and revenue creation or as Alex Baldwin said in Glengarry  Glen Ross, Getting them to sign on the line which is dotted.

Let’s consider the business plan.  I have personally looked at hundreds of business plans and I have been responsible for authoring at least a dozen.  A boat load of time is spent on the big picture things like, macro environment, management bios, competition, risk disclosure and financial projections, oh yes, those beautiful, wonderful financial projections.

The problem with the business plan in general and the problem with financial projections in specific is, tons of work is spent on those things that are fairly predictable and controllable that really don’t determine the success or failure of the business.  And not enough time is spent on the single greatest factor that determines the success or failure of the business plan. Revenue.

Why?  Management history, competition, expenses, let’s face it.  Labor costs, cost of goods, occupancy costs, sales costs etc, they are all fairly easy to project and predict and so those get more than adequate attention.  But revenues, the dreaded revenue projection, I think of the quote by sixth century Chinese poet, Lao Tzu.  I don’t know if that was Sun Tzu’s father or something, but anyway, Lao Tzu said, those who have knowledge don’t predict, and those who predict don’t have knowledge. In the business plan, focus is put on those things that they can predict and those things that they can’t predict, well, let’s just say, it doesn’t get adequate attention. 

It’s the revenue side that is the most challenging and perplexing.  And most business models and plans failed not because they missed their expense projections, they failed because of their revenue projections. They fail because they didn’t adequately and accurately project and predict how they are going to get customers in the door or drop their goods in the online shopping cart and purchase.

I recently came across a book titled The One Page Marketing Plan.  I listened to it first on audio book, driving from Kansas City to Minneapolis, and then I purchased it in hard copy.  I strongly encourage you to do either, listen or read or both.  The book is divided up into three sections, for the three phases in a sale cycle.  The Before Phase -  you are dealing with prospects, and the goal is to get them to know you and generate some interest in you.  The During Phase - you are now dealing with a lead and the goal is to get them to like you and buy from you for the first time.  And finally, the After Phase - you are dealing with a customer and the goal is to get them to trust you, buy from you regularly and refer a new business to you. 

It’s that simple.  The book covers things like, the 80/20 rule and its derivative, 64/4 rule which I hadn’t heard, or put another way, why 96 percent of the stuff you do is a waste of time; how or why marketing is the biggest point of leverage in your business.

The main thing I took from this book is the absolute importance to put attention and resource into marketing tactics, not just marketing strategy.  I love the Sun Tzu’s quote, “Strategy without tactics is the long road to victory.  Tactics without strategy is the noise before defeat.”  This book does a brilliant job   of focusing the importance of tactics. 

The author of this book is Allan Dib, and I reached out to Allan  to see if he would be willing to do a three-part podcast series with me, and he said yes, where we can deep dive into these three phases of customer acquisition and retention. He too shares my commitment to helping small and medium size banks compete and win, and is willing to do whatever he can to help.  I suggest you go to his website, www.1 (That’s the number one) 1PMP (Patrick Mary Patrick).com and get on his mailing list.  He really does put some good stuff out there. 

The really cool part about Allan is, he lives in Australia, and most of us know that, well, Australia was settled by a bunch of convicts from the British, especially Irish, I believe, and so Allan is joining us from his prison cell in Botany Bay where he and his sixth generations have been serving out multi generation prison sentences for not paying their rent to a British landlord.   Allan, are you there, and how is the reception in your center block dwelling?

Allan:              {Laughs] No, It’s so good, I am out on parole, so...

Kelly:               So you are out on parole, excellent, nice!  Just to be clear, Allan is not serving a prison sentence.  Well, Allan thank you very much for joining us.  I appreciate it.  Could we get right into it?

Allan:              Let’s do it.

Kelly:               Okay.  I like your definition of marketing and the circus, tell me about that.

Allan:              This was one that I had come across and I might have read it, right out of a book but it basically gives you a good bird’s eye view of what marketing is, because if you ask 10 people what marketing is you’ll get  likely 10 different answers, you know. Some will say it’s branding.  Some will say it’s advertising.  Some will say any number of different things. 

So I came across a really good simple jargon free definition of marketing.  If the circus is coming to town and you paint a sign that says, Circus Coming To The Showground Saturday, that’s advertising.  If you put the sign on the back of an elephant and walk into town, that’s promotion.  If the elephant walks through the Mayor’s flower bed and the local newspaper writes a story about it, that’s publicity, and if you get the Mayor to laugh about it that’s public relations.  If the town’s citizens go to the circus and you show the many entertainment booth, explain how much fun they will have spending money at the booth, answer their questions and ultimately they’ll spend lots at the circus, that’s sales,  and if you plan the whole thing, that’s marketing.

So basically, marketing is the planning of everything that takes a customer from not knowing you to becoming a customer and a raving fan.

Kelly:               And each of those items that you mentioned are tactics within that marketing strategy, correct?

Allan:              Absolutely!

Kelly:               You talk about why most business marketing fails, then you focused on large companies versus small companies, let’s talk about large company marketing and branding versus the smaller company marketing and branding.

Allan:              Sure, that’s a good one.  It’s interesting that I have seen this mistake made many many times and it’s a way that small businesses basically lose a lot of money when it comes to their marketing.  But basically, have a look at one of the large bigger competitors in their industry, they could be in any industry, banking for example, and they look at what some of the large companies in their industry are doing in terms of marketing and advertising. 

And very often it’s just sort of brand building kind of stuff.  “Okay, well if my big successful competitor is doing this then I should do this as well” That’s where they sort of mix up the causation.  So, why this is so erroneous is because large companies have a very different agenda when it comes to their advertising and their marketing than smaller companies. 

So large companies, they have a very very different agenda and they have very different goals to small businesses.  So, for example, a few other things that they want to achieve when it comes to their marketing and advertising is pleasing the board of directors, pleasing shareholders, satisfying their superiors biases, satisfying existing clients preconceptions, winning advertising and creative rewards and then getting buy in from various committees and stakeholders. 

And then somewhere down the bottom is making a return or a profit, whereas for a small business, the only thing that matters is making a return or a profit on their advertising.  So it’s just like if I was in the real estate development business and I looked at some of my bigger competitors, I had a look at high rise developers like, let’s say Donald Trump or someone like that, were doing.  They build massive multi-storey buildings and if I was to use the same strategy and tactics as them I couldn’t afford to do that because I am a small developer and it doesn’t work if you do that on a small scale. 

I mean, you have to build the whole hundred floors for it to be a successful office building development, whereas as a small business, you maybe can afford to build half a dozen dwellings or so.  You can’t build one hundred floors with six hundred units or six hundred offices.  So you must understand that strategy and tactics change with scale. 

So if you are working on a larger scale, then yeah, you can afford to do branding and all these sort of exercises which may take years and may take millions of dollars to execute properly.  But if you are working with a budget that is tens of thousands of dollars you have to have a very different tactic and strategy to get a return.

Kelly:               Would it be a fair statement to say that branding and direct response marketing are kind of the opposite extremes of a marketing tactic?

Allan:              Yeah, I would say that, although they do intersect.  With direct response marketing the whole point of it is to get a response, first of all, and to also get a return on investment.  For example, you want to spend $10,000 on a campaign and then you are able to measure it very well and you are able to say, look, we got 300 responses and on average we sold $1,000 each.  And so you are able to quantify the exact money spent, the exact level of response and the exact return on investment. 

Whereas with branding, you sort of just want to get your name out there, you want to get a bit of awareness and then you help that down to attract that result in more sales.  And again, like I said, making more sales may not even be your ultimate goal with branding, it may be just getting the name out there so  investors can see  and  you’re out in the market place so that your boss has his superior and his superiors have their biases and preconceptions satisfied.  Whereas, I tell small businesses the best sort of branding for a small businesses is sales.  If you sell your product, that is the best form of branding for a small business, because realistically, branding is what happens after the sale, not before the sale.  A lot of people think branding is kind of a thing that happens before the sale, it’s really something that happens after the sale.  It’s when they experience your product and service and then they are able to connect with your business.

Kelly:               Okay, so is it a fair statement to say that at a minimum 80 percent of the marketing budget should be spent on direct response marketing and very little on this branding, mass marketing thing?

Allan:              Certainly, for small businesses.  And as I mentioned, strategy changes with scale so if you are a business who is doing maybe one hundred million plus, maybe branding is appropriate.  If you are operating on a smaller scale, and if you have got a marketing budget that’s not within the millions of dollars, and if you need to get results that’s not a few years away then certainly it’s wise to consider direct response marketing.

Kelly:               You have mentioned that targeting everyone with your product or services is a terrible idea.  Why is excluding certain customers actually a good thing and why does being all things to all people lead to marketing failure?

Allan:              Yeah, now that’s a great question.  So, it’s funny [inaudible -13:46] market is and very often, I would say, everyone, you know, they just don’t want to exclude anyone and they want the widest sort of audience.  On the face of it, it doesn’t make sense because, you know, you want as many people as possible working with your business.  You may have a business that realistically can work with anyone but that’s a very typical newbie marketing mistake, for a few reasons. 

First of all, it’s very expensive to target a very large group of people, everything to everyone.  So you need to do basically, again, mass media marketing which small businesses is not only a waste of time because they just don’t have the budget and the fire power to get their message out broad enough to make a return.  So that’s one of the reasons why it’s a real mistake for small businesses.

The second reason is because it’s a principle in direct response marketing where you want the response to your ad to be, someone says, hey, that’s for me.  They want to read an ad and it will be highly relevant to them because we are all exposed to so many advertising messages each day that our brain would go crazy if it paid attention to all of them. So our brain actively scans for things only if they are relevant to us and brings our attention to that.  So if you make it too general it’s just going to get left behind by the person’s brain.  So that you will want to read an ad and say, hey, that is for me. 

And, you know, you think about it, in life, so if you have injured your knee, do you want to go to just a general doctor or would you want to go to a knee specialist?  In fact you have seen, say an ad for a knee specialist, when you have injured your knee, I mean , that is the perfect most relevant message at that time so that is going to get a much better response than, hey, we are a doctor, we do everything.

Kelly:               I like how you recommended, identifying your ideal customer and you even go so far as to creating an avatar or like a virtual representation of that customer.  Why is that important?

Allan:              It’s very important because when you are crafting your message you want the message to be extremely relevant to your target market.  Now, if you are a part of your target market, so let’s say for example you are creating an advertising campaign for   plumbers, and you are a plumber, okay, well you understand the mindset of a plumber and you understand some of the challenges that you are having in the industry and so on and so forth, but if you are outside of your target market, so let’s say you are targeting lawyers and you happen not to be a lawyer then getting an understanding of the target market is absolutely critical and it’s the first thing you should be doing before crafting any kind of advertising campaign. 

You do research into the industry, research into their mindset, what’s keeping them up at 3:00 a.m., you know?  Is it the fact that their billable hours are now reduced from what they were a few years ago?  Is it that there is increased competition?  What are the things that they are discussing at industry conferences?  What are the things that they are concerned about?  What are the threats coming up in their industry?  So, if you can get into their mind and then craft a message that has happened to them then that’s going to be much much more relevant and will get a far far bigger response than something just general and vague.

Kelly:               So as part of that you came up with this personal fulfillment value to market place and profitability as being key to defining your target mix, as key to defining your target market.  You call it the PVP Index, explain that to us.

Allan:              I usually tell them that there is essentially three factors you want to consider when selecting your target market.  And when I say each of us selecting a target market, we are talking about that from an advertising and marketing prospective.  It doesn’t mean that if someone outside of your target market approaches you and says, can I buy from you, that you say no. Of course, you can take other business outside of your target market but here we are talking about when you are building your marketing campaign and your marketing strategy, you need to have at the top of mind, very tight target market, and what are the best ways to define your target market. 

Because this is a place where a lot of people get stuck and confused and where they don’t know who they should be targeting.  It is three factors, so we call them as an acronym, PVP.  So “P” stands for Personal fulfillment, “V” stands for value to the market place, and “P” for profitability.

                        So, if we go to “P” - So “P” is the personal fulfillment part so P, people who you   enjoy working with, you know.   If there is a target market that you hate working with and there is another target that you love working with, well, the obvious thing is to be working with the people that you love working with. I mean, no one wants to do a job that they absolutely hate.  Personal fulfillment is certainly a big factor.  It’s not the only factor.

The next one is value to the marketplace. So, how much does this marketplace segment value your work. For example, if you were selling consulting services. So, for a business that relies on your type of consulting to make a profit, they value that extremely highly, whereas if you were targeting a very small business customer or someone who doesn’t really need your services then they place a low value on your work. So, you want to target someone who is willing and able to pay you the appropriate amount for your work.

And lastly is Profitability. So that’s basically how much profit do you make from that target segment, because sometimes, I mean, revenue is obviously not the same as profit.  And it’s critical to remember, it’s not about the turnover but it’s about the leftover. So sometimes, you know, I’ll find clients they maybe do a lot of revenue with a particular type of client that when you net, because of the high cost of servicing or the high cost of goods or whatever there is very little profit in the deal.  So, these are three factors I encourage people to consider when considering their target market - personal fulfillment, value to the market place and profitability.

Kelly:               You know, the personal fulfillment and the profitability, the two “P’s” seem to be fairly easy to kind of value or measure.  The tricky one in my mind is the “V” the value to the market, the “V” and the PVP.  I mean, how much does the market value your product or services and how do you do that other than put it out there and see if they will pay for it.  Because that’s kind of what you are asking, it is, how much you will pay for this, how much do you value it at?  Is it 10 bucks an hour or is it 200 an hour?

Allan:              Yeah, absolutely.  And part of everything that we do in the marketing prices, there is an element of test and measure. I mean, there is a research element so you may well go out in the marketplace and ask, look, with my type of product or service what would you be willing to pay?  And surveys are great, but very often people give misleading information in surveys so there does need to be an element of test and measure. 

So, what I recommend is do a campaign to a target market that you think might be ideal and let the market, say, test small and then if you find you are on    a winner you increase that and if you find that it fell flat, which often it does, you cut that.  So you don’t go all in on one sort of gamble, it’s exactly like you would within an investment.  You might part of your portfolio in that type of investment and see how it goes and if you are doing well then you might increase that leverage you have in that investment or if it’s not growing then you might cut that. 

Kelly:               You mentioned that companies needed to define their USP, their unique selling proposition, which needs to answer, why should they buy the product and why should they buy it from you and not your nearest competition.  These are the questions that should have clear and concise and quantifiable answers. 

Now, in financial services, which is where the banking world resides, products and services can in many ways be a commodity type product.  In part of your book you mentioned that customer service and quality of products are really not features and benefits you can attach to your product to get differentiation because these are experienced after a purchase, so what can a bank, by example, do to get some sort of differentiation in an environment where it’s somewhat commoditized?

Allan:              Yeah, I get that question a lot, and like I say in the book, there’s really nothing new under the sun.  I mean, before Apple came along there were computers and before Google came along there were search engines and all of that sort of stuff.  So, there really is nothing new under the sun but we are not saying about coming up with a unique selling proposition. I am not saying invent something brand new that’s never ever been done on planet earth. It’s just a matter of being slightly different.  

And that can be in the way that you pack your product, that can be in the way that you price the product, it can be in the way that you deliver the product.  So, I give an example in the book, there is almost nothing like a bigger commodity than coffee.  So, you can get coffee for a dollar and you can pay five or six dollars for a coffee.  And it’s funny, like, I have seen coffee shops that they just plop it in a paper cup and just give it to you for a dollar and then there is one that do things like coffee art and things like that and, you know, have all sorts of options and features and all of that and they charge five or six dollars for a coffee.

So very often, not necessarily the core service that you, you know, are creating that’s unique, but it’s the way it is packaged or delivered or supported and all of that.  And the reason why I say good service and good quality is not a unique service proposition because these things are just expected.  I mean, for you to be competent and deliver good quality service and good quality support and all of that, those are things that are just basic and expected.  In marketing, we are really trying to say, how can we attract people in this place.  So, of course we want to retain them and make them very happy customers, and we do that after the fact   but for the fact we need to have a way of attracting them.

Kelly:               Having a live customer service person could be a part of a USP, correct?

Allan:              Absolutely, absolutely, I mean, if your industry is full of people who do things in an automated way or in a way that customers don’t like and you are able to differentiate yourself in a way and service customers in a way that they prefer then, absolutely,  but to differentiate and a potential to be a USP.

Kelly:               That’s what we have community banks that are residing in these local communities that are competing against the big banks that aren’t residing in these communities, having bricks and mortar of a live person, for instance, that they could talk to and not just a 1800 telephone line to reach the banker.  I think that’s a pretty significant USP.

Allan:              I agree.

Kelly:               Okay, I am going to challenge you with a couple of things here. You mentioned five major motivators of human buying behavior, fear, love, greed, guilt and pride.  Now here is your challenge.  Can you render any off the cup ideas on how a banker could use each of these?  How could they utilize fear in capturing clients?

Allan:              I think fear would be an easy one to motivate people and fear of loss especially is a huge motivator when it comes to motivating people.  People are more motivated by fear of loss than the possibility of gain.  So, if you are saying, look, invest with us and we have a special investment program where we limit the amount of loss that you are able to get or we guarantee that you won’t lose on a particular investment.  I mean, that’s a big motivator and that’s a way that you can use fear in your marketing strategy.

Kelly:               Okay, love.

Allan:              Love, so that’s a big driver as well.  And what’s one of the reasons that you may want to create investments and make a secure nest egg for the future and maybe love for your children and your family, make sure that they are taken care of.  You could use that as a motivator to sell insurance policy, life insurance for example, to make sure that your loved ones are taken care of should the worst happen.

Kelly:               Okay, good one, greed.

Allan:              Well, that’s an obvious one with financial products as well. So, being able to show the client what they have to gain.  The whole make money kind of industry is all revolving around the feeling of greed.

Kelly:               Okay, guilt.

Allan:              Guilt, for example, almost the opposite of the love ones.  So can you take care of your love ones, are they able to be taken care of should the worst happen to you or are you protected in case of a loss of an income.

Kelly:               Alright, final, pride.

Allan:              Pride, that’s a huge motivator for a lot of people and one of the reasons why a lot of people want to be successful and do well financially is because they want to feel proud of themselves and feel proud of what they have accomplished. If you can show someone that they will be able to be proud of their accomplishments, I mean, that’s a huge motivator.

Kelly:               Alright, I want you to finish with, talk about the 80/20 and the 64/4 rule which I love this thing.

Allan:              Sure, I mean, a lot of people are aware of the 80/20 rule.  And it basically comes from an Italian economist name Vilfredo Pareto, and often it’s called the Pareto principle.  And that’s nothing new to a lot of people, but basically, it’s an amazing rule that holds true for almost anything.  You know, for example, 80 percent of a company’s profit often comes from 20 percent of its customers, you know, 80 percent of road traffic accidents is often caused by 20 percent of drivers.  Interestingly, this economist observed that 80 percent of wealth is actually owned by 20 percent of people.

And it’s interesting, in the research for this book I looked at wealth distribution at chart and, in fact, despite new technology, despite everything that’s happened in the last 100 years this rule still pretty much holds true. So right now, if we look at 80 percent of the world’s wealth it’s pretty much owned by 20 percent of people.  So that’s the 80/20 rule and it’s funny that the 80/20 rule can actually be applied to itself.  So, if we take 80 percent of 80 and 20 percent of 20 we actually end up with the 64/4 rule.  

And again, I looked into the wealth distribution chart and sure enough if you look at, 64 percent of the world’s wealth is actually held by 4 percent of the world’s people.  So basically, put another way, 64 percent of your fix comes from 4 percent of your causes.  So about 96 percent of the stuff you do comparatively just doesn’t move to the middle, it’s almost a waste of time.  It’s the 4 percent that you have done has resulted in 64 percent or more of your results.  And this is where I encourage people to focus heavily at marketing, so because marketing is the 4 percent of things that you do in your business that   can have a dramatic result, that’s the 64 percent plus result in your business.

Kelly:               And to be more specific, a direct response marketing is where you think the resources and attention should be spent, correct?

Allan:              Absolutely.

Kelly:               That’s terrific.  Allan, I really enjoyed that. We’ll set up part two of the podcast to cover the During phase.  What’s the best way for listeners to get in contact with you?

Allan:              To touch base on my website which is  You can sign up for my mailing list and you will get a lot of free articles and good advice there.

Kelly:     , I’ll get that posted in the show notes as well.  Okay, that’s it.

Allan:              Thanks Kelly.

Kelly:               Thank you Allan.

We want to thank you for listening to the syndicated audio program,  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. Voice introduction is me, Karim Kronfli.  The program s hosted by Kelly Coughlin.  If you like this program please tell us.  If you don’t please tell us how we can improve it. And now some disclaimers.  Kelly is licensed with the Minnesota Board of Accountancy as a certified public accountant.  The views expressed here are solely those of Kelly Coughlin and his guest in their private capacity and do not in any way represents the views of any other agent, principal, employee, vendor or supplier.

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