An Inside-Out Branding Guest Post by David Frankil, President of NAFCU Services Corp. (bio)

About NAFCU Services

The National Association of Federal Credit Unions (NAFCU) represents approximately 800 Federal credit unions. NAFCU Services Corporation is the for-profit, independent subsidiary of NAFCU that works with leading companies including American Express, Securian, Deluxe, Affinion and others, that provide services that help credit unions increase efficiency and productivity in areas such as member retention and acquisition, information security, new products and services and investment advisory services.

Background

NAFCU Services has 28 ‘Preferred Partners,’ including American Express, NCR and SAS Institute, that are focused on financial services in general and credit unions in particular. Program participation requires a fee from Partners, and they have a choice of levels (Bronze, Silver, Gold and Platinum) with fees and activities scaled proportionately. All profits from NAFCU Services go to the parent association to support their programs.

 

When I became President of NAFCU Services in July, 2006, it was being run as a typical trade association affinity program, which is to say it was (essentially) a mechanism for giving select vendors an opportunity to support NAFCU programs . In exchange Partners received the right to use a logo, great space at the annual trade show, some networking opportunities with Board Members, and that’s about it – best of luck with sales and marketing. Clearly not a balancing of value from the vendor perspective, and a major reason why many of these programs have high turnover rates and lagging revenues.

 

Priority One: Create a Solutions Mindset

Turning the program around required a shift in philosophy and strategy to a solutions mindset, making it more effective for all parties involved. The goal: positioning our Partners as thought leaders in their respective areas and leveraging marketing activities to open dialogue and create relationships with prospects.

 

So the first and foremost responsibility is for NAFCU Services to understand the challenges faced by credit unions every day for growth and productivity. Where is the next round of profitable revenue coming from, how to cross-sell and up-sell Members, how to attract new Members, and so on. And how to run operations more efficiently, more effectively, more securely, at lower cost, etc.

 

The Marketing MRI

We call the process of understanding and pinpointing credit unions’ challenges—from their point of view—the Marketing MRI.  This involves in depth interviews with credit union executives, fine tuned with surveys and of course ongoing discussions with our board.  Most importantly we synthesize what we’re hearing and learning based on our experience in the marketplace. 

 

Once we understand credit unions’ challenges in a particular area—say member retention, we look for a solution from within our current roster of Preferred Partners. If not, then we look to recruit a top quality, market leader to join the program, following a competitive RFP process that includes an evaluation by an Advisory Committee of credit union executives.

 

At that point, we have credit unions A, B, C perhaps even through credit union Z that need a solution, and Preferred Partner B that has one. Here’s where that Marketing MRI comes in again.  Sharing what we know about the needs of the credit unions with the Preferred Partners, we help distill the partner’s value proposition to a laser beam, and then – call it multi-modal or multi-channel marketing – using all the tools at our disposal to communicate the value proposition and establish thought leadership for the Partner.

 

Many trade associations have the first part of this equation, a Preferred Partner-type program with the association’s stamp of approval. What differentiates NAFCU Services is the second part, where we (in essence) become a marketing consulting services firm for our Partners, generating webcasts, podcasts, articles, speaking opportunities, direct marketing initiatives, recommendation letters, credits for advertising and sponsorship, and much more. So from a Partner perspective, the value equation (investment in the program versus value received) is much more attractive.

 

Results

Since I joined NAFCU Services in July, 2006, we have grown revenue by 14%,  15%, and this year an expected 33%. We’ve significantly upsized deal size, and more important, have made our existing relationships far more effective. Key to the success has been instilling that solutions mindset throughout our partners’ marketing and sales teams by developing and leveraging the Marketing MRI approach.

See related post: David Frankil on London, Ink

 

David Frankil on London, Ink

Many trade associations have Preferred Partner-type programs in which the partner receives the association’s stamp of approval and pays for the right to display the logo. 

What differentiates NAFCU Services is the second part, where we (in essence) become a marketing consulting services firm for our Partners, generating webcasts, podcasts, articles, speaking opportunities, direct marketing initiatives, recommendation letters, credits for advertising and sponsorship, and much more. So from a Partner perspective, the value equation (investment in the program versus value received) is much more attractive.

Given that there are so many moving parts in our business model – our aggressive marketing mindset means that Partners are involved in numerous initiatives throughout the year – planning is essential to maximize results. 

So we brought London Ink in to create individual strategic marketing plans in partnership with our higher level Partners, i.e., looking at each partner’s value proposition and target audience, honing it to a very fine point, then mapping those against the available marketing tools and channels, from PR to print ads to webcasts and podcasts.   This plan becomes the roadmap for how partners can maximize the value of their investment in NAFCU Services. 

One of the lessons of this process has been that the development of a strategic marketing plan helps every partner be more effective, whether they are one of the largest players in financial services markets, or an up-and-coming technology innovator.  This is a testament to the value brought to the table by London, Ink.  In fact, we have added the “London Plans” as an explicit benefit of coming in at a higher level in our Program.

Bob London has delivered marketing plans for more than 15 NAFCU Services partners—each with a finely tuned format (which we now use internally as our standard marketing planning template!) and insights we might not have had without his independent, objective point of view.  Bob has helped NAFCU Services deliver real value in terms of our partners’ results and their satisfaction with the NAFCU Services Preferred Partner Program.  Bob’s presentations at our annual partner conferences on topics such as leveraging Web 2.0 and his Inside-Out Branding have also been practical and thought-provoking.

See related post: David Frankil on “The Marketing MRI.”

An Inside-Out Branding Guest Post by David Frankil, President of NAFCU Services Corp. (bio)

Everyone has heard the cliché — “We know that half of our marketing budget is wasted, we just don’t know which half.”  And the corollary, that marketing is just the law of large numbers – “We’re going to get a 1/2% response rate no matter what we do, so let’s just do more.”

 

In the venture capital world, the short-hand term for business models built on such brute force market response assumptions is “China Bicycle (CB).”  It refers to a presumably mythical entrepreneur seeking funds for a bicycle factory in China, with optimistic revenue projections based on a sketchy analysis — that “All we need to do is get just 0.01% of a billion people to buy our bicycles.”

 

‘CB’ is the proverbial kiss of death if a reviewer writes it on the title page of a business plan, because it says the entrepreneur is inward-focused on the business or technology, and has not thought carefully about which segments of his or her target market are most likely to respond to marketing initiatives. CB assumes that all one billion consumers are identical in terms of their desire and willingness to purchase a bicycle, whether they be young or old, rich or poor, healthy or infirm. And that there are no differences in style, construction, or performance which might be more attractive to some than to others.

 

An example from my inbox today: Washington-Reagan airport is most convenient for flights from my office.  An unnamed airline–on which most of my flying occurs and which has easy access to data showing my preferences – sends me a weekly e-mail with “My E-Saver Fares.”  However the flights are usually originating in cities other than mine and terminating at destinations to which I’ve never been.

 

How much more effective would it be for this company to tailor the e-mail with an offer that might actually get considered?  Flights out of my location and preferred airport to the destinations I’ve been to in the last 36 months.

 

So now the e-mail just gets deleted, because past experience has shown that there will be nothing relevant to me in that communication. More fundamentally, they’re telling me that they care more about themselves (inward-focused — the fact they have plenty of extra seats on flights between Toledo, Ohio and Buffalo, NY) as opposed to my needs.

 

Marketers are better served by understanding their value drivers, segmenting the needs of target markets, and then looking for the intersections of values you provide with needs they have.  A process that sounds simple but is all too often overlooked.

 

If you get the process right, you’ll never see CB written in the margins of your marketing plan!

 

See related post: David Frankil on London, Ink

 

Another good POV for CEOs on increasing marketing spending during a recession…

Savvy marketers realize that it is because many marketers cut advertising spending during a recession that a recession is the best and least expensive time to gain market share through advertising. Publishers are more open to negotiating deals. Plus, there is less competition as other companies reduce budgets or drop out completely. This is the time to brand yourself as the leader in your category.

http://www.mediapost.com/publications/?fa=Articles.san&s=89326&Nid=46 524&p=410171

Bob London is president of London, Ink, a full-service marketing and communications consulting and services firm.  Bob serves as a “Virtual VP of Marketing” for growth-stage companies that need marketing strategy and execution but can’t justify the cost and commitment of a full-time executive.

Recently I got an inquiry from the CEO of a rapidly growing education firm looking for help with a referral-based lead gen program. Below is an excerpt from my response that I thought might be useful to others.

By the way, publishing your answers to client/customer questions in your blog or FAQ section is fast becoming a best practice for savvy companies. Why?

1. First: we tend to get the same questions from multiple people, so rather than rewriting the answer each time or searching your hard drive, just send the link to your blog/site where your answer already resides.
2. Second, your answer will invariably include relevant keywords that can bolster your natural/organic page rankings on Google, et al.

Below is the content from my reply–the company’s identity has been omitted.

Basic Rule: While Referral and Loyalty Programs are Different, They Overlap in Important Ways Here is the difference: Referral programs are those that leverage existing or previous customers to generate new ones. Loyalty programs reinforce the referrer’s ties to the brand by providing additional benefits available to them as a reward for their loyalty.

 

Strategy 1: Utilize Rewards/Incentives that Reinforce Your Value Proposition We know that referrals are a sign of brand loyalty; your opportunity is to provide the referrer with special incentives and rewards that bring him or her closer to your brand over time.

Therefore rather than continually rewarding/incenting referrers with cash or other equivalents (i.e. the “Infinite Happy Meal Loop”), consider utilizing discounts on future courses and continuing education, additional/ongoing access to instructors and guest speakers and other similar branded assets, services or intellectual property. The benefits of this strategy are three-fold:

• The reward reinforces the value of the brand, which is what customers like about you in the first place, and what they want more of.
• Branded assets, services or intellectual property can be delivered at cost, thus creating a high perceived value at a relatively low out-of-pocket cost.
• Helps avoid the “Infinite Happy Meal loop,” in which the only differentiator is the toy, rather than the core product, and there is a constant challenge to up the ante by coming up with a new “toy.”

Strategy 2: Create a “Cumulative” Program to Stimulate Long-Term Participation Take advantage of untapped potential to generate referrals among those who have used your product or service longer than 24 months months prior.

To develop additional “hooks” that keep referrers engaged in the Referral Program beyond the 12-month period, consider evolving from a “year-to-year” model to a “cumulative” program that counts all referrals over the lifetime of the referrer.

For example, being part of a CEO’s Club, based on outstanding referral performance over the last five or ten years would carry a tremendous amount of prestige for a graduate that is so vested in your company.

This “cumulative” model creates awareness (and healthy competition) among all graduates, not just those who graduated less than 12 months prior.

Strategy 3: Leverage the Power of the Community One of your greatest assets is your customer base (tried but true cliche alert!). If you haven’t already done so, create and foster online (virtual) communities on MySpace and Facebook that provide a place for interaction and promotion.

This powerful community dynamic can be leveraged to benefit your Referral Program to:

• Test program ideas.

• Promote the program

• Generate ideas from customers on how to stimulate referrals.

• Provide customers with “viral marketing” tools to help them creatively and powerfully stimulate referrals.

Well, not literally the top but right under AP Headlines, WSJ.com and Facebook updates, but above about 35 other blogs/widgets, I now have posts from Nick O’Neill’s excellent Social Times. http://www.socialtimes.com/

There are thousands of blogs covering social media, and it is hard to distinguish any of them from the pack. But Nick not only writes insightfully on relevant topics, he does so with a DC flavor, witness this sample post: Say Hello to 9 New D.C. Startups.

This proves the new/old/new bromides: *Good content is good. Relevant content is great,* or *All content is local.*  Don’t try to appeal to everyone, at least not right off the bat.

Note: Nick also throws a good party, as anyone who attended his launch can attest.

Today I gave the following response to a client CEO who forwarded an article on success factors in cross-selling and bundling for existing customers.

By the way, publishing your answers to client/customer questions in your blog or FAQ section is fast becoming a best practice for savvy companies. Why?

1. First: we tend to get the same questions from multiple people, so rather than rewriting the answer each time or searching your hard drive, just send the link to your blog/site where your answer already resides.
2. Second, your answer will invariably include relevant keywords that can bolster your natural/organic page rankings on Google, et al.

Here is my reply to the client CEO:

(Name redacted):

I think this is good info and a strategy worth pursuing or at least evaluating. Based on my experience, I would add three things to his list of success factors:

Cross-Selling is Sales-Driven; Bundling is Marketing Enabled:
Cross-selling is based on the premise that there are natural synergies or overlays between existing offerings, so it is not a stretch to go to a client using product/solution A and pitch prod/sol B. Cross-selling will happen because the sales team recognizes the opportunity to sell (and thus earn) more and feels comfortable enough with the pitch even though it may be outside of their expertise comfort zone. Bundling requires some market evaluation to determine the size of the opportunity and the business case for how to attack that opp, i.e. defining the packages/bundles, identifying the resources needed to develop packages/bundles (marketing lit, accounting/billing, training, compensation, etc.) and where packages/bundles make sense for specific industries, company sizes, etc.

Alignment of Sales Incentive/Compensation with Cross-Selling Revenue Goals:
Despite collective wishful thinking that cross-selling and bundling will occur because sales has been communicated to and educated, there needs to be an incentive that causes them to go outside of their comfort zones, knowledge-wise. So there doesn’t necessarily have to be a new or enhanced incentive/comp program but we need to show a very direct and simple link between cross-selling and their income.

Sales Education/Training:
Related to the first two points above, the sales team needs to feel comfortable with the pitch and that they can increase their earnings by cross-selling or selling bundled offerings. Just because initiatives are put in front of sales doesn’t mean their behavior will follow. They need to feel supported with the right tools, incentives, training, education, etc. and pointed in the most lucrative market direction.

What “Flavor” of Marketer Do You Need?

Posted by Steven Lamont on 05/13/08 under Marketing Process & Organizational Design

Many have heard the story about Eskimos having 32 words for snow, given how important it is in their lives. Similarly, technology companies have many different classification for technology workers — from CTO to CIO, and from lead web developer to database architects. Most technology companies have a very clear idea about what these jobs entail and who qualifies for them.

http://www.achievemarketleadership.com/wp-trackback.php?p=245

Bob London is president of London, Ink, a Maryland-based marketing and communications consulting firm, and serves as a Virtual VP of Marketing for growth stage companies that need an injection of marketing experience and leadership to drive key initiatives and results.

Some of you may have seen the first edition of Executive Perspectives (http://app.e2ma.net/campaign/22f58b4e16a0899b96a7db638d61ac1f), London, Ink’s electronic publication featuring first person essays from CXOs on various themes.

I know at least 279 people on the London, Ink house list opened the email–that’s a whopping 45%+ open rate. (The actual number of viewers is typically higher since the official open rate often doesn’t include those who viewed the message in their webmail.)

I expected a good open rate since this is a list of business contacts I have cultivated over the years and pruned accordingly (removing members of my softball team, PTA members, etc.). But 45% was a very pleasant surprise.

It is good reminder to any business or non-profit that the best source of business is your house list; and if you don’t already have one, you need to develop it quickly. Pull together your existing customers, inbound leads, those business cards collecting in desk drawers and put them into a spreadsheet or, better yet, a CRM system. Categorize them by contact type and where they are in the lifecycle.

Then develop one or two pieces of interesting content and send it to your list via one of the many email marketing service providers (I use and recommend MyEmma.) The goal should be to segment this program by sending content that appeals to each contact type.

If all this sounds awfully basic, then why doesn’t every organization have a house list and market to it regularly?

Also, in addition to the 45% open rate, I received several direct email replies from prospects who had been “stuck” at various stages in the pipeline for various reasons. All told, as of this writing the first edition of Executive Perspectives resulted in three new proposals valued well into the six figures.

I’ll keep you posted on the results after the 2nd edition of Executive Perspectives.

 

Bob London is president of London, Ink, a Maryland-based marketing and communications consulting firm, and serves as a Virtual VP of Marketing for growth stage companies that need an injection of marketing experience and leadership to drive key initiatives and results.