Banking on Digital Growth
Banking on Digital Growth

Episode · 8 months ago

122) #ClarityCalls: How to Maintain Your Brand’s Humanity in a Digital World

ABOUT THIS EPISODE

After COVID rapidly accelerated everyone’s digital transformation timeline, many have come to expect digital-first… well, everything. 

But how do you maintain true human relationships without human-to-human interaction?

In this Clarity Calls episode, that’s the problem today’s guest, Jon Voorhees , Director, Distribution Strategy & Business Development at TerraStrat Group, and I wrestle with.

We discuss:

Why there will always have to be a human component in finance

The education component of creating more human interactions

How digital tools can help us be more human when a problem arises

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

Listening on a desktop & can’t see the links? Just search for Banking on Digital Growth in your favorite podcast player.

...john ask how can banks and credit and to create quote unquote true relationships without human contact. Well that's a great question john and one that I look forward to talking through with you on this episode of banking on digital growth. You're listening to banking on digital growth With James robert lay a podcast that empowers financial brand marketing, sales and leadership Teams to maximize their digital growth potential by generating 10 times more loans and deposits. Today's episode is part of the clarity calls series where James roberts sits down for a conversation with someone in the digital growth community to provide clarity into the biggest digital marketing sales and leadership questions others have. If you'd like to join James Robert for a future conversation texture question right now to 8 3 to 5495, seven and 92. And remember the only bad question is the question that goes unasked. Let's get into today's clarity calls conversation greetings and hello I am James robert, ley and welcome to the 122nd episode of the Banking on digital growth podcast. Today's episode is part of the brand new clarity call series and I'm excited to welcome john Voorhees to the podcast, john is the director of distribution strategy and business development at Terror strap, a new kind of strategy firm where human intelligence meets artificial intelligence. Welcome to the show, john, it is good to have you today. Yeah, great being here before we get into your question and a mighty good question it is for for this clarity calls, I'm always like to start out on a positive note, what is going well for you, what is what is just good and positive in your world right now, personally or professionally it's it's your pick man. So I'll give you two a personal note. I became a grandfather 20 months ago for the very first. Uh thank you. And two weeks ago my granddaughter and her brought her parents but my granddaughter came up and visited for a week and she's basically grown up during Covid, which is severely limited her interactions with other people and the like. And every time we've gotten together it's as if we're strangers and she understands the danger stranger kind of concept. But this last time she let me pick her up and hold her and walk around she took me by the hand and went and showed the animals at a park we went to, it was heavenly, you know, being able to make that breakthrough and then professional, I think the thing that I'm most blessed with is I'm a trained geographer, my degrees in Economic Geography And you know, it's one of those degrees that people go well how do you make money at that? I've made a career over 40 years doing distribution strategy, which is economic geography, right? It's the...

...retail side of urban planning and I've been able to use it for my entire 40-year career. And so every morning I wake up doing the thing that I love to do and I'm planning on continuing to work as long as I continue to love what I could do if you can find that in your career, go with it. But if you wake up every morning hating your job, you got to go do something else. I have the same sense that you love what you do. I, you know, I do, and it's such a blessing because it's not work like I'm in an executive coaching program and they've always talked about retirement. Like, and I see this with people, I see people that retire and things just don't go as well as they thought or they had expected. And so for me, my mind set and I think that's a unique opportunity because if when you're working with your mind say more than your body, you as long as your mind stays healthy, you can do this as long as as possible. So my people have always asked, well, when you want to retire, it's like, I don't I don't, I want to keep doing this as long as I'm having fun and, you know, creating value and finding enjoyment because it it comes back to the point of your question here and and and the question that you would ask me, It's about relationships and and to me that's what this is all about. Just uh the amount of people that I've been able to meet through this podcast, we're almost, you know, we're approaching 150 episodes now and a little bit over a year. The just to to be able to meet new people and have good conversations. It's it's fantastic. And your question that you ask that and we'll talk through this is you said, how can banks and credit unions create quote unquote true relationships without human contact? And can you provide some context into this question for for some modest additional clarity here? Sure. So, you know, you're talking about loving what you do. So, I I've spent some time, 80,000 hours studying distribution strategy and there's always new things to learn. So, I I basically wake up in the morning and I get to read, I do research, I write craft speeches and I think that's that's my job. So keeping my brain focused on those things, on whatever the new topic is always keeps me charged. So, when I was thinking about what's happened over the last couple of years, so when you think about the banking and credit union industry, um, and so I'm all about the physical channel, right? The physical channel branches exist together. Low cost deposits, which can then be used to fund lending in a variety of other ways, right? You don't always have to do alone through a physical channel. It's easier to give money to people digitally than it is to gather money from people, right? But what's happened is that there are factors that are...

...influencing your ability to do that. In fact, I'm working on an article reminiscent. So think about like this, you've got, how do you grow a new branch? Well, you acquire new customers, you cross sell existing customers additional accounts try to get more and more of their business. And by keeping your customers longer, you grow their balances over time as their incomes go up and things like that. Right? So those are the three principal drivers. Well, in the last 20 years, The number of people who move change residences, which is the number one driver people change in the bank has gone from 16% a year to 9% a year. So there's far fewer people moving. Therefore this far less turn, therefore it's harder to acquire customer. Right? And then the industry has done it. We keep introducing digital channels to drive people away from us. Right? Well, we really don't want to talk to you. You can just do it on your own. And in fact, if you try to talk to them, as I did recently with a financial services firm, you call up the 1 800 number And you have to answer 27 layers of questions. And while you're waiting for each of the next layers that keep reminding you, you can do this on our online or mobile channel. It's like, I don't want to do that. So they're doing things to drive traffic away. Well, number one reason, Number one way you cross sell accounts is through teller referrals. That's what telephones going away. So it's harder to get new customers. It's harder to cross sell. And then the third is growing balances well in the last two years, all of a sudden we've seen huge stimulus payments being pushed out so balances but it's artificial. It's not gonna last. It's basically it's covering an underlying issue which is your ability to drive sales to gather people is getting harder and harder and then you layer in external things like all these Syntex and neo banks that are coming in and what they're doing is they're stripping off the front is right they're going after. So chime there. Our target audience is younger, lower income people living paycheck to paycheck in the link. So all of these factors going on and yet everyone is saying the future is digit, the future is digital banking. I often get into debates about branches going away. They're not going away. So that that it was all that context. I kept thinking about it because if people really want to create a relationship with their customers, which is what everyone, if you listen to them relationship banking is the key to do this, then how do you do that when you don't actually want to talk to me? Yeah, it's a it's a fantastic question and it's one of the reasons why I wrote banking on digital growth and have a formulaic approach, D. X plus H X equals growth. The digital...

...experience plus the human experience will lead to growth because I'm a I don't believe digital alone digital in a silo it will lead to any growth. I I I'm even seeing now in doing research around the digital only experience and like you know why people keep coming back and saying oh amazon's a threat and I'm like but are they have you tried to get in touch with a human being at amazon? Even time research is now coming out showing time there's a level of friction and frustration when everything's fine and dandy, everything's fine and dandy. But when you need to get in touch with a human being at chime chime is sending them through chatbots, china's sending them through email and that's frustrating a lot of people who well wait a minute. The grass isn't necessarily greener on the other side. I even take a step back further and learning through the covid experience. That formulaic approach of DX plus Hx equals growth. I want to re I want to add another variable in there. E. X. E X plus Hx plus D. X equals growth meaning the employee experience must proceed. A positive employee experience must proceed. A positive human experience that may or may not be delivered through a positive digital experience because it could be a face to face, it could be video but the human element still has to be very very real, particularly in a complex buying journey, like a financial product. It's it's like health care, you can have remote digital health care up to a certain point, but then you're going to have to actually sit down and Have some heart to heart conversations, you some diagnostic work and really dies. You're gonna have to be hands on at some point at some point. Exactly. And we've, you know, financial, there's $6 billion dollar bank and they're looking at maximizing their digital growth capabilities. And I said it's not going to be done by digital alone. You're gonna have to build this human element into this. And what they said, well what do you mean? I said, well you've got lead generation who's going to pick up those leads. A human being has to pick up those leads. You got to actually talk to them, schedule an appointment, whether that be through a zoom or in person, it doesn't matter. You still have to bring that human connection. What we have found through our studies is the faster that you can get one human being in contact with another human being through a digital medium. There's a higher natural propensity for and it's a human element.

I would, I would say right here, technology has transformed our world and digital has changed the way consumers shop for and buy financial services forever. Now, consumers make purchase decisions long before they walk into a branch if they walk into a branch at all, but your financial brand still wants to grow loans and deposits, we get it. Digital growth can feel confusing, frustrating and overwhelming for any financial brand, marketing and sales leader, but it doesn't have to because James robert wrote the book that guides you every step of the way along your digital growth journey, visit www dot digital growth dot com to get a preview of his best selling book banking on digital growth or order a copy right now for you and your team from amazon inside, you'll find a strategic marketing manifesto that was written to transform financial brands and it is packed full of practical and proven insights. You can start using today to confidently generate 10 times more loans and deposits Now back to the show, I agree with you 100% that the, the answer to the question is our future digital or physical is Both they have to compliment because so here's here's a couple of different things. One is you mentioned China right China's, you know, I think there are 12 million customers or something like that. And so if you go back and look at chimes advertising of a year or so ago. Right. It was all about, we'll get your paycheck early, you get a debit card, your life is easy, no fees, all that kind of stuff. And what they were fighting at the time though is that through different research companies have come back to conclude that yes, but the customers of mobile or digital only banks hate their banks, right. They don't like them as much as they like. Break banks still got branches and the like and and the reason because they don't feel they have a relationship with them. Right. Right. It's very transactional, right? It's like, I don't really have a relationship with amazon but I probably order something three times a week. It's very transactional. And when I have a problem, they actually do make it easy for me to return something and things like that. So they've sold that account management side of the issue by making it easy on the back end. So you apply that to banks now we'll chime as they found out through all this growth. They haven't staffed up the human side of the equation enough. And so they actually had more consumer complaints to the consumer financial protection board than chased it. And chases got like five times the customers. So you start thinking about, well what are the ramifications? It's not an either or it can't be in either or and but it has to...

...be a both. Because what's happening is that as we've introduced from from a customer's perspective and this is where I do a lot of my thinking, I put myself in the customer's shoes as they've been afforded new ways to transact. They don't trade off what they do is they add the new channels to their menu of options and you've now given them a selection of options and depending upon what I'm doing during the day, what my need is, let's say it's to make a deposit. Well, I may choose to do with my phone. I may choose to drop that may tm and or if it's a big deposit, I may chose to go into a branch by having those options. That's that layer of convenience. Just like having a lot of branches and ATMs layer of convenience. That's what people want. They want to have choices for doing it. However, that deals with only the transactional side of the business. The number one reason people go to branches because they have a problem. Right. I screwed up. In fact, some of the research I recently did, it's hard to believe but gen Z uses branches as much as baby boomers. It's for different reasons. Right, gente. Does it because I screwed up, I don't know how any of this stuff works. How can I be out of money? I still have checks. Right. But whereas boomers do it for the security reasons. Yeah, I, I think that's, I think that's where the opportunity lies though, particularly with a new line of possible income, non interest income. And you see, you see Ally going away from NSF you see a lot of larger nationals starting to move that direction. So what's gonna that impact to drive down to say the community bank and the credit union level? Are they going to follow suite with that? Well then, how are they going to replace that? For me, it's almost financial coaching, financial, like actual coaching to where I have a coach, you got the financial Jim out of New York who's doing this to get a monthly membership fee of about $95 a month. That can, that coaching can be delivered digital remotely. Or maybe you sit down on a quarterly basis with your coach, a monthly basis, whatever the cadences and you go through and you solve the tough problems together and you give people a choice to maybe you charge a premium if they want that, that face to face in person experience. And then maybe if it's a digital or remote, well maybe it's a different level of membership. So to me, I totally agree. I'm sorry. I think in fact the way you do, so advice, right? People are talking about banks that the government advisory centres, but the type of advice, someone who's 25 needs different than the type of, someone who's 55. Absolutely. And the, the gym Z is looking to become educated, they...

...recognize they don't know everything. Millennials think they know everything and they want transactional convenience gen x is sitting there going, oh my God, retirement is coming up and I haven't saved anything, right, So they need, they're the ones who truly need advice, financial advice like investment advice and they're like, and, and and boomers are sitting there half the boomer, you know, I'm a peak baby boomer, right? And I'm the youngest of five kids. So all my siblings are the front edge of the boomers and you know, they're looking for security. Listen, I've built up enough wealth I can retire. I just don't want to screw it up and I want you to be there. I want you to have my back. Right? And so you need different things at different times. So thinking, I've been thinking about education, Well, how does it been taking information? Right. So why are banks and credit unions doing, you know, 90 seconds or three minutes? You know, short videos? If I, if I bought a new house recently. And so there's always new things to learn. Like how do you adjust these, you know, brackets on your kitchen shelves and things like that? Well, there you go to Youtube, you type it in and there's a little video about it, Right? So how do checking accounts work? How do late fees work? How do you know, all these different things. Could be a suite of educational things for, for the younger generations who wanted, but then you can think about as you go up, it could be one on one advice for gen x, right? It could be without having to sit down with a financial planner or something. It could be just help me understand these kinds of things, but it all gets back to, there's a human doing that right. You know, it's not a chat box, there's a there's a there's a human who is educating these, these folks. But the other big piece of this is if you put yourself in the issue of the consumer right, I'm willing to give up my contact with humans at my financial services provider for all the routine stuff. But when I have a problem and I choose to solve it by either picking up the phone or going into a physical building to talk to someone that better be a perfect experience, You better solve my problem and make me really happy because otherwise that's the only thing I'm going to think. Yes. And and that is where I believe that idea of experience the micro experience and micro experiences has the potential to beat the macro micro in a digital world can beat the macro. My wife ordered some towels off of an online retailer, not amazon it was, she was looking for something very specific mattock as I...

...believe the brand and brands been around for a very long time and ended up getting you know, handwritten thank you know, delivered with the towels beautifully wrapped like high end retail. But it was through an e. Com experience and it really left an impression Zappos for example, right? Digital aecom retailer but staffed by an amazing and Tony shea passed away too early. But he his mind was so far ahead of this idea of humanizing a digital shopping experience to where they wrote about it and delivering happiness. I even think about this idea of financial coaching, it's more than just showing someone what to do, but probably helping them re imagine their relationship with money because that you're getting into a whole psychological discussion rooted in, you know, family of origin and childhood and environment. But but it's something that, that we just can't do alone. We it's why we go to the gym, it's why we get that trainer. It's why we get that additional layer of expertise. But I think about the fitness industry and with the fitness industry has undergone, you've got political, political has been successful, not because of the bike, but because of the accessibility to a human being a coach. That that's why they have the live classes because and, and and also the community because there's that accountability factor too. I think that I'm more likely to be held accountable by john even if john you're through zoom the fact that john I know you're there, you're a real person. I can call on you, you can call on me and hold me accountable, I'm more likely to transform positive behaviors because I don't wanna let jOHn down versus say a chat bot. It's a chat bot, who cares, right? So I think I think that's the flesh and blood, even if it's not in the physical context, it's still knowing that john is going to be there and you said something to before we hit record, it's this idea of people say that, oh, I got all these friends on social media. But is that really a relationship? Is that is that someone who is going to be there for you in your most dire time of need? Yeah, the, you know what, what defines a relationship, right? So psychologists say that you can't have a relationship without human interaction and does even now you and I are looking at each other and we're talking and where many miles apart, you know, we have a relationship well, we made for this moment, right? If we do this enough, if we talk enough we may do that, but we'll see each other at conferences and the like, but it's not the same kind of relationship...

I think you have with, you know, say your family or you know, your friends or your people that you work within the life. I think the, the industry in total has been so cost avoidance, right? It's been it's been the matter and that's why digital has come in and all these other kind of things and and and it's been great. But there's a limit because the other side of it is this balancing act and I don't think Anyone's got it right yet. And then that I've mentored. So I was with bank of America for 17 years and so almost all my relationship with with Bank of America lots and lots of accounts and I know the products really well. So when I pick up the phone because I have a problem, you know, I've explored all the other options, right? And you know, and I'm one of their preferred clients and they send me all these nice notes and everything. It will take 10 minutes to get through their damn phone tree to be able to get to talk to a person. And then oftentimes the person I get on the other end of the line, I realize I may know more than they do. And it's like, no, no. When I choose to talk to a person, I want someone who's really good operationally, right? They know how things work and because I want them to fix something, right? And and so that I may have no issues at all all year. You know, and I might interact with the bank every day via the mobile device or my my computer. But that one bad experience, it's going to stick with me. And I had one of those earlier this year and I can't keep letting it go. It got me to the point of should I go through the pain and suffering of changing all my relationships right? And it was like, you know what I ended up doing was I call the people I know within the organization still. And I said listen, I think you've got a problem, you may not be aware of and I told them the story and we'll see if they do anything with it. But The new firm that I joined, reason I joined is because we have some amazing AI-based programming tools that help make the decisions about where you put branches in 18. So much more scientific than we could in the past. But even within that part of my role at the firm is I bring in 47 years of experience. You know, I think I've opened over 1000 branches and I've closed over a couple of 1000. I've analyzed pretty much every market in the country. So I'm a sounding board for the models, right? So when the models generated output, it's john do they make sense? You know, this market really well? And so combining the human intelligence or human experience with the ai intelligence and a experiences, I can't do what the models can do and the models can't do what I can do. It's that combination. It's your it's your...

...formula. But for each of those interactions there has to be an easy and comfortable itty with it. And so I think there's going to be a smart bank out there who's gonna be heavy digital but they're gonna say we're gonna build up the biggest baddest staffed call center that's ever existed and were already going, we're going to pay more so we're going to get pros we're going to get the best people we possibly get right there. Yeah. And so when, when, when a call comes in, The call gets routed from the first ring, not from, you know, 87 the layers to get it to the right person, it's going to go to the person and they're going to say, how can I help you? And when you tell them what the problem is, they help you, that's where we have to be. And someone's going to say it's worth it to build that model because I can take out some physical costs because I'm going to be able to serve those issues via the phone, which should still be cheaper than the physical. But I'm not gonna sacrifice the experience we used to have when you would walk into the bank and sit down and talk to marry your banker. Absolutely. And we were just having that conversation in a peer group this morning talking about how we must become more proactive in these relationships, whether they be in the real physical world or in the digital world when someone and that's where the data and the a I can come back into play because I can utilize some of that context, that history of who that person is and their behaviors and they're where they're at where they're looking to go to facilitate a dialogue to facilitate a conversation and then take a proactive stance in their life to provide that level of guidance and maybe even accountability. Because I'm being reminded that I need to do an outbound outreach just to check in on john to see how his progress is going based upon, what we had talked about three months ago. That type of an experience, I think you're right. It's to me those that can solve that problem will be far ahead than those who are just thinking about digital alone or thinking about physical alone. But they're bringing the best of both worlds together as a hybrid. You when you win, imagine a future where you call and you talked to someone at your bank and they resolve a problem for you and then two weeks later you get a call from them asking did everything work out right? And the like now you've got a friend relationship who's checking up on you and and you are much more receptive to having a second conversation with them and that's how you end up doing cross selling, like you acquire more of the business. One...

...of the research things that I still remember, it was early in my career, we were studying what happens when someone walks into a branch on how do you place advertising in a branch? And we did in depth studies with people, we'd have someone stand inside and outside the branch and we'd interview people as they're going in, coming out. Like what we found was when someone's coming into use a teller, Their mind is engaged in one purpose. How long is the q how do we get to the teller that kind of stuff. All our advertising was facing the door so people would see it when they walk in. Well what we learned was they don't take it in at all. We flip the signs so they would see it as they're leaving the teller station. We found that recall from those people with significantly higher because there might have cleared of the task and now they're open to something. The same thing happens when you're on the phone, you've got a problem, right? If you've made a problem, a positive experience for me by solving it quickly and correctly, then my mind is going to be open to all sorts of ideas, but I don't I don't see that happening at least at the big players and it could be a scale issue with the like they've got to solve it because if they if they want to keep reducing branches to limit your options with people and they want to make it almost impossible to get someone on the phone. They're basically saying, well, we value your business, we just don't value you, right? And because we really don't want you to talk to us, we want you to go away and just, you know, it's a friend of mine was at shopping at walmart and posted a picture of their local walmart, they had closed down all the manned checkout lanes and everything was self service checkout and her comment. And so she was showing pictures of huge lines, people which big shopping carts doing self checkout and she goes, whoever thought this was going to be more efficient has to be fired because I didn't know when I came in her shopping, I didn't know I was going to become an employee of walmart. Right, right. So it's the does the technique fit the expectation of your customer? And you know, I think it's people need to really step back and say human interactions are getting fewer and fewer. How do I make them the best possible interactions? Because those moments of truth are what people will remember and that's what we'll talk about. I still talk about my bad customer phone experience months after it's happened and because it just ticked me off so much. And when you think about those moments of truth, five pop to the top of my head and this...

...has been such a fantastic conversation with a great question today, john but for the dear listener to really go back and review you obviously you have the in person physical experience, you have the phone call center experience, you have the video experience, you also have email and SmS, you've got chat and and and and then there's that the Ai component. But but but I think that's that's only one half of the equation because even then, how many times do those Ai chatbots end up connecting over to a real life person to resolve that situation? To provide that help to provide that hope john this has been a fantastic conversation and I appreciate you joining me on another episode of banking on digital growth. Mr Lay, thank you. If anyone is listening has a question like john about digital marketing, digital sales, digital leadership please reach out to me, text me that question to gain clarity at 283 to 5495792. And I look forward to answering and talking together with you on a future episode of banking on digital growth until then and as always be well, do good and make your bed, thank you for listening to another episode of banking on digital growth with James robert. Ley like what you hear, tell a friend about the podcast and leave us a review on apple podcasts, google podcasts or Spotify and subscribe while you're there to get even more practical improvement insights visit www dot digital growth dot com To grab a preview of James roberts, best selling book banking on digital growth or order a copy right now for you and your team from amazon inside you'll find a strategic marketing and sales blueprint framed around 12 key areas of focus That empower you to confidently generate 10 times more loans and deposits until next time. Be well and do good. Yeah.

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