Banking on Digital Growth
Banking on Digital Growth

Episode · 1 year ago

18) #ByTheBook: Lessons from a Digitally-Disrupted Music Industry

ABOUT THIS EPISODE

Some of you are old enough to remember CDs, right?

You know, those $15 frisbees we used to get music on?

Well, your financial brand can learn a lot from their decline. 

In today’s By the Book episode, I take a look at the 3 Ds of digital disruption and how to find opportunities in the chaos of the digital revolution.

In this episode, I explain:

-What we can learn from the disruption in the music and film industries.

-How my youthful indiscretions prove there are always opportunities in times of technological upheaval

-How to position your financial brand to take advantage of these opportunities

You can find this interview, and many more, by subscribing to Banking on Digital Growth on Apple Podcasts, on Spotify, or here.

You 're listening to banking on digitalgrowth, with James Robert Lay a podcast that impowers financial brand marketingsales and leadership teams to maximize theiir digital growth potential bygenerating ten times more loans and deposits. Today's episode is part ofthe by the book series where James Robert unlocks and shares the secretsof Digital Marketing and sale strategies for financial brands fromhis best selling book banking on Digital Growth, the strategic marketingmanifesto to transform financial brands that is now available on Amazon. Let'sget into the shell greetings in hello. I am James Abelatand welcome to the eighteenth episode of the banking on digit growth bodcast.Today's episode is part of the buy the book series where I share insights frommy best selling book banking on digital growth, which is the strategicmarketing manifest so to transform financial brands. Today's episode, I'm we get a bitpersonal with you and share my passion around music, along with some of Thee,shall I say, shady business that I used to conduct in my past during my senioryear in high school and no, I was not dealing drugs, but instead I was, let'scall it moving MP threes, but before we get into today's conversation, I wantto shout out and thank MARLA fields for her review of banking on digital growth,on Amazon, Marla rites. This is one of the best books on the topic ofdigitization for financial services out there. If you're in sells marketing ourmanagement for a regional bank or creditiing, or you do business withthem, Marla says this is a must read and shecontinues. The lessons are clear and relevant, and the examples really drivethe learnings home after reading the book, I'm rethinking everything we aredoing and marketing, starting with creating a purpose statement to go withoir mission and vision. Marler recommends do yourself a favor pick upa copy, it is worth every penny and more and she ends. She can't wait forthe next one. Omarla really appreciate the review andthe kind words as we continue to dive into theinsights. I do share in the book to educate, to empower and to elevatefinancial brand marketing cells and leadership teams. What I want you to do right now, I'd like for you to close your eyesjust for a moment. I want to take you back to the year twothousand, a seven think to yourself what was life like for you back then for me personally, I had been marriedjust a little bit. Over a year, the business was growing. We were advising financial brands anddigital looked really different, but it was still what I saw s thefuture, strategically important. When I think about digital at the time.I want you to just for context purposes. Remember in two thousand and seven you two was just a little. Over twoyears old facebook had just opened up to thepublic. After being a platform that was exclusively limited to college,students and Netflix had just delivered their Billianth d vdin two thousand and seven, while at the same time they were introduciing thestreaming service that we've all come to know in this postcoved world. Sowell, Andas big as these three events were aneven bigger event, took place in two...

...thousand and seven when a man who was known for his gensand black turtlenecks stepped onto the stage and introduced his company's new product, the EYEFOAM. Now this revolutionarypiece of technology combined at the time, it was three different tools allinto one. Yes, there was a cellular phone, butjust like his earlier breakthrough, product Steve Jobs brought us the eyepod. He now had the music player combinedwith a phone and most transformative of all was that we have a phone with amusic player and what it was called at the time, anInternet communication device that included email and web browsing, and somuch more so just think for a moment how much ourworld has transformed since Steve Job stepped on that stage, because what has transformed the mostand really forever is the way that we communicate with oneanother and is communication that is at the heart of marketing incells. It is communication that is the key forfuture growth for any financial brand, so go ahead and open up your eyes andFlash Fortune today and now think about where we are as anindustry where you are on a marketing team or cells, team or leadership team.Not only is technology evolved at an exponential rate since two thousand andseven since the introduction of the IFOAM, but so to is consumerexpectations. Onthe opposite in of the spectrum. Competition has also changedas well, and it's competition that has changed to keep up with technology and,more importantly, to keep up with changing consumer demands, changingconsumer expectations, expectations that are being set digitally by Amazonby apple by Google. I want to look inside really lookoutside at another industry, where consumerexpectations and demands have changed over the last we'll just call themtwenty years. Let's look at the music industry now there were certainly changesalready happening in th in the music industry before two thousand and seven.But in retrospect, when Steve Jobs introduced the EPHONE, he put the death knell in the old modelof the music industry, because the iphone sped up the rate ofchange enormously at the mackrel level when it came to music, and this speed of change can now beseen across all industries. The financial marketplace in particularly,is being transformed and disrupted by changes in technology, consumerexpectations and competition, and even now covet so when any industryexperiences disruption. As Peter diamadus wrote in the book, bold, alongwith Stephen Culter, there are a series of six events that occur. Both authors go on to explain, quotethe six ds or a chain reaction of technological progression, a roadmap ofrapid development that always leads to...

...enormous upheaval and opportunity. Think about that for a moment of wherewe are todays, we are continuing to navigate through thispost covet world and and it's funny I I always reference postcovated andsomeone onlinken called me out the other day saying: Are we postcoved yet'cause? They didn't get the note. I say that we're postcoved, because I look atthis is a binary perspective. There's precoved our life before we'll call itFebruary march of thousand and twenty there's postcoved life after FebruaryMarch, two thosand and twenty, because post coved is what we're moving through, butprecovet. We will never go back to what the world was before and when you thinkabout this idea of rapid development that always leads so enormous, bothupheaval and opportunity. That's what we're moving through right now. Yes,we're seeing upheaval, we're seeing frustration, we're seeing friction andeven when e, when we go back to the ideas that I'll write about in the bookbanking on Digital Growth- and I talk about moving into this fourth ingestialrevolution in every previous industrial revolution that we've moved through. Wehave seen massive upheaval, but we've also seen the biggest progress andjumps of innovation in all different areas, and that's what I want to focuson with today's conversation. Coming back to this idea that digital growthreally is about communication, specifically around marketing and cells,and I'd like to zoom in and focus on, three of the sixties that Peter andStephen Righe about in their book, bold, that being dematerialization, democratization and Demoditization, and the way that I want to frame thisup is from one of my personal passions, which is music. I love music of all kinds. Music brings people together, music,ovokes, amotion music can inspire. It can lift you up.I can also mellow you out and whan. A lot of people don't knowabout me is when I was growing up. I was in the orchestra from my sixthgrade year in junior high through my senior year of high school. I playedthe Viola and I was good. I was so good that I was the first chair, the Violus Nthe Varsy Orchestra, my freshman yearin high school, and the ironic thing about this idea ofof being good at the Viola being first char, my freshman year. Actually Ihated it. I hated playing in the orchestra for a multitude of reasons, and I thinkyou know if, if, if I was a kid growing up today and seeing what I see on youtube with ats, like Tucellos and Lindsey Sterling and bond, they wouldhave given me a whole ifferent perspective about what was possibleplaying the Viola and it wasn't just about classical music. It was. It wasabout music and you could set music to to rock. There was a band, and this isreally what inspired me. When I graduated high school, I started a punkrock band, which is a story for another day, but there 's a band around thattime called yellow card thatt on the West Coast, punk rock band, who whointroduced a violin as part of their act, and it was just so so differentand but what we're seeing is is music and the music industry. The olutionthat music has taken going from the vinyl to the eight track to thecassette to the C D and Now to streaming that same trend is also evident inother industries like film and movies...

...has followed a similar trajectory fromthe big rils to the VHS, to the dbd, to Netflix, Amazon and so on was streaming media. What I want you to be aware of is the shift from larger pieces oftechnology and media to smaller N and really eventually to to nothing at allor, to say the least, nothing tangible in the physical world, because witheach shift, the new technology in media becomes a standardized part of theculture, the new operating norm and society, and what has happened isdematerialization for both music and really film media has become the norm.Dematerialization has become the status quo and in banking we seedematerialization playing out on multiple fronts, but primarily up tothis point, dematerialization has only happened on the tranactional side ofbanking, the service side of banking, for example, consumers continue to moveaway from going into the physical branch, even more so nowpost coved, totake care of the transactional pieces of banking for ex depositing a check moving money around and instead they'reusing their mobile device to make those deposits digitally through the APP orto move money around or to pay. Someone else with Petep transvers technology has transformed our worldand digital has changed the way consumers shop for and buy financialservices forever. Now consumers make purchase decisions long before theywalk into a branch if they walk into a branch at all, but your financial brandstill wants to grow loans and deposits. We get it. Digital growth can feelconfusing, frustrating and overwhelming for any financial brand marketing ansales leader, but it doesn't have to because James Robert wrote the bookthat guides you every step of the way along your digital growth journey visit,www, dot, digital growth docom to get a preview of his best selling bookbanking on digital growth, or order a copy right now for you, and your teamfrom Amazon inside you'll find a strategic marketing manifesto that waswritten to transform financial brands and it is packed full of practicalandprovent insights. You can start using today to confidently generate tentimes more loans and deposits. Now back to the show. Even the very concept of thetraditional physical check is going through the dematerialization processas p a DP payment APS grown popularity to replace physical payment systems,and if you have young kids like me, you think it is the most amazing thingin the world when you can pay your babysitter with Zel or with Vin milerwith papal, and you don't have to worry about writing a check, R or worse, not having any cash on hand and havingto make that extra. Stop at the ATM on the way home life is so good because ofthose platforms like Zel and Vinmoand paypald. When you can pay yourbabysitter, I think you know when you're at the grocery store and someoneis in the check, outline of t of the fifteen items or less it's supposed tobe t the speedy check outline D, and then someone pulls out that check thatdreaded, checkbook and you're, like Oh, my gosh. Why why? But, understandablyit's the dematerialization process that makes those who have built their entirecareers around the physical rold of branch cells of broadcast marketing? It's the dematerialization that makesthem feel confused. It makes them feel...

...frustrated and makes them feeloverwhelmed about digital and digital growth, because no longer can they seetouch or feel the wirl around them. It can be very scary for people to seetheir physical world taken away from them before their eyes, and I get it.Digital comes with the perceived good as well as the bad, and that brings usto the second part of digital disruption, which is democratization.So let's go back to the music industry, because we know record labels andproduction houses used to control the process of production from front toback back. In the day they were the hitmakers. They were the gatekeeperswho pulled the strings. They controlled everything, but in contrasts. We nowhave digital platforms. Coming back to my example, with like outube andLindsey stirling and two cellos to where total nobodies can strike a cordwith a mass audience become global stars, because without you tube, Iguarantee without you to there would be no just and beaver now whether that particular exampleresignates with you and he's not my musical taste for sure, but he's just one great example of Miny whohave gained the capability to create and here's this word again,communicate directly with audiences through new technologies anddistribution channels. Coming back to movies, we're seeing theplatforms like netflixs, Holo, Amazon, prime democratizing the film world, by offering diverse options to manydifferent niche audiences and what's import to note, is thatthese brands, Netflix and Amazon and Hulu are not traditional productionstudios, but they are now making their very own content and they're using thepower of digital to serve a much wider market than the old school Hollywoodentertainment giants. Finally, as it relates to banking, wesee the democratization in the rise of financial brands, those brands that aredigital first, that are mobile first, with their business model, the FINTEC,the neobics that are popping up left and right really by the thousands whoare communicating directly, as well as creating valuedirectly for Nich market segments through digital and mobile technologies, whether it be banking, whether it beentertainment, whether it be music digital, has given power to the people,the power to connect the power to communicate at scale, but again and TNOT. Everyone thinksthese changes are great and where a lot of that disconnectisfelt is among legacy. Brands who used to hold all the power are now being stripped of that powerand control, and particularly theyare, losing the power to control the pricingmodels, to make money to control the profits in the same way that theyalways have. And that's where a lot of this, this upheaval, this unrest comesfrom that bubbles up really to the macro scale. 'CAUSE demonitization isthe third part of digital disruption. Record labels felt this pain in a bigway in the Hay Day of recorded music andfor context in in the modern air. I'm talking about the peak cell of CDs inthe mid nineties before the bottom fell...

...out record labels were raking. It in Imean think think back if you can to those days and if you didn't grow up in that timeperiod, the world was very different when you had to pay fifteen to twentydollars. PERCD and the production costs to producethose CDs was was really pennies on the dollar, but here's the thing and if you grew upduring that time period, you know exactly what I'm talking about when youwanted to buy. Maybe one or two songs that you that you heard, but you had to buy the entire CD forfifteen and twenty dollars the record companies controlled the pricing model. I coulddo whatever they want and we s the consumers got screwed and this wholemodel, and we all know what happened next. Therise of digital and broadbrand brought about the democratization of music, and this led to huge shift in the industry's power.ballats record labels lost their abillitess at prices and no longercould they, because the listeners had control of how theyreceived and paid for music. The disruption from digital technologyswept away a lot of the money, the prophits the revenue that hadpreviously been taken for granted. There was one brand in particular, who sped a lotof this along and that's. When Napster came on the scene, some had predicted this demodifizationwould virtually become absolute. That listeners were never going to pay forrecorded music again, and this is where I can tell a storyabout my my shady business dealings. I was a senior in high school and, let's just say, I was allergic topaying for music. I remember how I would download musicnonstop and I'm talking twenty four seven back. Then my parents would beoutside of my bedroom late at night, telling me to go to sleep or getting onto me. If we're always sucking the the broad band weere, one of the very firsttinwas that have broadband in our community in in high school, and Iwould always get in trouble for s tbringing the Internet, to a crawl. ButI wasn't just downloading music for me, because I saw an opportunity as a young,encrpreneur or criminal. Depending upon your point of view, I saw thepossibilities that this new technology would bring because being one of the first kids with DSLand at the time it was only one hundred and twenty eight kilobites per second,which was just twice the speed of dial up, which was fifty six k. We combinethat DSL connection with a CD burner and I'm often ready for business,because what I would do as I would. I would doubtit all this music and burnfully customized disk from all those songs. I was grabbing off of Napsterand then sell them to students for ten dollars for the for the entire disk ofof customized music kids at school loved. It andistead of having to youknow Plop Down Fifteen, to twenty bucks at say best by or target to buy a sitwith only two to three songs that they actually like. Now they were payinghalf price and could get twenty of the oudest jams from like nineteen. Ninetynine and it was. It- was an amazing business model but youthfulindiscretions aside, I bring this story up because it shows how I tookadvantage as an individual in these three crucial elements of digitaldisruption, the dematerialization, the democratization, the demoditization ofthe music industry. Of course, today there would't be thesame appetite for those customize CDs...

...nor whald. I argue. Is there the sameconsumer frustration that we used to see back in the late nineties, becausefor the most part we don't feel like we're being gouged anymore by therecord labels we have much more say and control as individuals as consumers forour personal entertainment dollars, because with streaming services, we cannow pay eight to fifteen dollars a month and unluck the entire library ofmusic or the entire library of music way more than we could ever consume. So that creates opportunities that createsnew business models, and these are the things that I'd likeFr, Eou to think about as we wrap up today's conversation. I want you to toask yourself a question and to think about and have some deep strategicconversations internally with your team, as you wonder aloud, what are you doing right now, postcoved to take itvantageof the dematerialization, the democratization and the demoditizationof banking? What are the opportunities but on theflipside idintify? What are the road blocks andwhat are the challenges that threatend to hold you back? Just like there's a interview of theCEO of tower records on Youtube that I highly recommend you look up as helamented the disruption that took place in thebanking industry. It's important to identify the roadblocks and thechallenges that threaten to hold you back, because what happened in musicand film those exact patterns are very much what is happening right now in thebanking space, even more so because of covet and just like, with those underother industries. The entire banking model. Up to this point has been builtaround the physical world of brick and morter. Just like the tower recordsstores were and thanks, Tho coveed everything is changing consumerscompetition at a faster pace. I get it. This change can be scary for some, butI do see tremendous amounts of opportunities, four financial brands tocreate and capture that have the courage to lean into those fears, thesame fears that threaten to hold them back, but I am greatly concerned, as amajority in our industry still remains trapped and what I call digital denialand digital denial as a topic that we'll discuss on the next episode bythe book, so that you can help those you know that might be trapped indigital nial escape and get on a path of digital growth until next time bewell, do good and wash your hands. Thank you for listening to anotherepisode of banking on digital growth with James Robert Lay like what youhear tell a friend about the podcast and leave us a review on apple podcast,Google, podcast or spotify, and subscribe, while you're there to geteven more practical. improven insights is it w ww Don digital growth dcom tograb a preview of James Robert's, best selling book banking on digital growth,or order a copy right now for you and your team from Amazon inside you'llfind a strategic marketing and sales blueprint framed around twelve keyareas of focus that empower you to confidently generate ten times moreloans and deposits until next time be well and do good.

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