Shaking up the UK Banking Sector – I’m cautiously optimistic

So Virgin Money are having a showcase week following their acquisition of the ‘good’ Northern Rock.

I am personally very excited about

a) Virgin Money’s ‘full’ entrance to the market
b) The next 5 years of the UK Banking sector

Virgin have been hankering after the opportunity to transform this industry for a long time now and they stand a very good chance of being able to do so… but they are not the only change shifters around and they are not ‘automatically’ going to be THE people to change the industry necessarily!

What IS wrong with UK Banking?
When bankers or those in the industry survey customers about their opinions about banking we get answers back about interest rates, charges and fat-cats.

What we don’t get is what are people trying to do with their money (that means they want better interest rates), how are people managing their money (such that they incur charges) and what do people understand about the banking industry such that they perceive ‘Fat Cats’ as being unfairly paid…

The banking industry is just generally not used to being customer-centred in it’s thinking. It has never had to be.

Well that is certainly changing now. Rightly or wrongly the banking crisis has made us all say “Enough is enough… something has to change” and there are now new entrants to the industry who are clamouring to offer us alternatives in an industry numbed by sameness.

When I look at the new entrants the ones that excite me are the ones that I know are thinking about us as human beings (and yes consumers), our lives and what we want to achieve ‘through’ banking – as opposed to those who are just thinking ‘what is a better banking product’ or ‘what does mobile banking mean for a customer’.

The lens of change has to be wider than this.

My pick of ones to watch… and why some obvious names don’t make the list

  • [my out on a limb prediction] – Royal Bank of Scotland
  • [the favourite but with caveats] – Virgin Money
  • [The Industry Usurpers] – Apple/Amazon/Paypal
  • [The Surprising Innovator] – Standard Chartered
  • [The disrupter] – Yodlee

Who didn’t make the list

  • Aggregators/Online ‘layers’ – Bank Simple/Moneydashboard/Mint
  • The incumbants – The other high-street banks

So why is the perpetrator (as defined by the red-tops) top of my list?  Not just because the only way is up ;-) but because

  1. The new starts are struggling with actually implementing the technology behind a bank.  Don’t expect current accounts or mortgages from Tesco Bank anytime soon the FSA is far too busy scrutinising them on why they couldn’t robustly deliver Savings and Credit Cards [their core business]Virgin Money remain on the list because they have at least acquired a fully working bank but they may still have serious integration challenges (based on the same technology Tesco Bank is struggling with)
  2. The incumbants have already got a fully working bank system, are experienced at delivering change into it and rolling that out to their staff.Their challenge is a cultural and organisational one – their key change they need to make is to decide to be more customer centred and do everything they already know how to do – but with THAT focus.  They COULD move very quickly and deliver to their already hefty market share a great experience.

The disruptors may well be the ones that kick one or two of the incumbants into action (the jungle drums of customer experience suggest this is happening within at least three major UK retail banks)

There are so many ways to cut your predictions – and I may well change my mind in a years time – there is one thing that for me remains absolute though.  The winner will be one who works out what it really means to be customer-led from the inside-out, who can demonstrate a genuine sense of connection and understanding with their customers.

Steve Jobs – Don’t Settle

Today the world lost a truly inspirational leader who has changed the lives of everyone whether directly or indirectly.

My friend Richard Harris had the pleasure of working with him and shared today a great summary of what made the man the man…

I can think of no higher praise than to remember him as a deeply and inspiringly unreasonable man, one who would never take, “…because that’s how things are” as an answer – there was always a better way.

He had the inspiration to think differently, the tenacity to not accept anything less than his vision and the charisma to attract talented people around him to deliver that vision.

On a professional front I think it’s worth taking a moment to consider how much can be achieved when you are truly uncompromising about the importance of excellence in product design and customer experience.  Apple is not without it’s flaws, it does not produce ‘perfect’ experiences or products but when the world wants to benchmark against you… you’re clearly doing something right.

On a personal front I would encourage everyone to take 15 minutes to watch his Stanford Commencement Address and gain some inspiration in your own life to not “Settle” for anything less than your dreams.

We will all continue to draw inspiration from his work for many decades to come and I’m sure that Apple will continue to provide new inspirations even now that their visionary leader has passed.  I’m looking forward to the future that he has contributed to so much to enabling.

Mike Butcher @ TechCrunch:- European Startups are not out to lunch – My speech at Le Web

European Startups are not out to lunch – My speech at Le Web:
Excellent Article from Mike Butcher@TechCrunch about the resilience of entrepreneurs, especially European ones! I have to agree.. I don’t remember the last time I was “out to lunch”…

The comments about the challenges for US business expansion are spot on…

There is a reason many US businesses hit a brick wall when they enter Europe – its complexity. They are used to a big, single market. The best European companies use this diversity to their advantage. If big US companies, grown fat on their large home market, are forced to buy the European player because they can’t break in, who is the winner here?

I’d like to see more European to US expansion though if this is the case… although with their federal system of states taxes and regulations can be difficult to sort out, especially where they fundamentally affect the consumer proposition (I’m thinking about GetThemIn for the States where Alcohol sales regulation/taxes can vary between states so much that it’s difficult to get a consistent pan-country proposition out – but we’re on it!!!)

Either way the message is clear – for Entrepreneurs – the downturn is just a different type of challenge to find innovative answers to…



My favourite hotel chain in the World – Morgans Hotel Group – have given the big finger to the Recession in fabulous style… they are throwing parties galore around the world to let the Recession know it’s just not welcome…

I’m loving the way they’ve taken on a thorny issue and turned it into a selling point!

We of course know the global recession will be forcing many to re-think their approach… the big question is who will learn from history and INVEST in marketing, brand building and customer engagement DURING the downturn? History shows that it is always those that invest that come out of the curve ahead of their competition and ready for the new spring that must inevitably follow this dark (but hopefully short) winter!

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Be-A-Magpie Is PayPerPost For Twitter

Be-A-Magpie Is PayPerPost For Twitter:
It was recently brought to my attention that one of my projects could benefit from advertising on Twitter through “Be A Magpie” which is something akin to PayPerPost for Twitter. My initial reaction was to imagine what it would be like for the Twitterers of this world to see adverts coming up in their Twitstream… and I thought it could be terribly annoying and make them feel like the people they were following were trying to monetize them… Surely this would break trust and potentially cause a rush of un-following…

A Rush to Unfollow?
Now I’m wondering if that is really what would happen? I think that the end-result will be a devaluing of the conversations on Twitter, however the effect may be more subtly noticed than immediate un-follows.

First of all…

  • Can I be bothered to unfollow?
  • If I’m generally finding Twitter useful/interesting will I allow some annoying adverts and just mentally block them out?
  • When do the adverts become too annoying such that I’m perceiving more ads than useful/interesting stuff?

At this point…

  • Is Twitter, in theory still useful if I could only see what I want to see?
  • Would I therefore pay to not see the useless stuff?

Should the Twitter guys be worried then or is there opportunity here? I mean I’m presuming they’re not worried about Magpie per se because they could just introduce their own similar service to protect themselves from externals. But are they worried about the impact on their user base of trying to monetise the service?

Personally I would pay to be part of a community such as Twitter where people were not allowed to advertise or use “Magpie” like services. Somewhere where I knew there was a cost to entry, and a cost to ongoing participation such that there was a shared sense of value-add (worth paying for!)… but of course it would take a freebie version to convince me of the usefulness…

So do you reach a certain volume of free users and then turn on the money taps, knowing that only a small percentage will pay while the remainder of the freebie users may continue to devalue the service? If you’re Twitter or Facebook even a small percentage can generate a lot of $$. If you don’t have any other money taps apart from “premium” though do you have to allow the devaluing of your free bit to make the “Freemium” model work? Twitter is such a simple service, unlike Facebook which has many more facets to it, that either it’s useful and interesting to receive a stream of updates… or it isn’t… is there much more to it?

Certainly Twitter’s lack of monetisation strategy has been reported by commentators to be a factor in the breakdown of the Facebook/Twitter dealings that have been going on this week (and if some techcrunch are to be believed have been going on/off for quite sometime). Apart from Ads and Ad-free premium service I’m still struggling to think of monetisation options (answers on a NDA to…)

Anyway… back to everyone’s favourite bird… I look forward to seeing how much of the shiny good bits the Magpie steals from the Twitter nest…

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Facebook Rolls Out Verified App Program – Revenue Model? Control Mechanism? Building Trust?

Facebook Rolls Out Verified App Program, Plus One Hell Of A Revenue Model For Themselves:
I disagree with Michael Arrington @ TechCrunch that the recent announcement of fb Verified App Program represents a new revenue model… I mean of course it DOES as in it will bring in revenue.

It just may not have high margin and may only be done by a certain proportion of the app marketplace.

I loved Michael’s comment that $9M was a lot of money where he came from, and it is where I come from too, however neither of us own one of the largest social media platforms in the world that is heavily invested in by Microsoft (did he forget the $240mn they put in??!!) $9M one-off SHOULD be small fry in fb-hq and if it isn’t then start worrying!

now if it was $9mn recurring and growing…. that might be a different matter as long as the margins were good… however $375 to test, verify an app – I’m sure there is automation but it does sound like a low-margin cost-covering exercise so there must be something else in it…

So imho what is more interesting is that fb want to get more involved in telling users which apps are good, and which aren’t.

fb’s Great Apps has already drawn a lot of criticism from, what might be sour grapes, commentators claiming nepotism, but hey I figure people that made a great platform probably have some friends who make some great stuff too… no biggie. Plus causes is a GOOD IDEA.

so whilst I don’t buy the big conspiracy theory of “great apps” I will entertain the possibility that being able to rank apps into badges of acceptability from fb will allow them to get more involved in how business is built on their platform. If you can introduce control on your platform you can certainly take a slice of the pie that other people are making in your playground. Fair Play

For those of us intending to roll-out serious business models with fun apps on social media $375 for the right to play in the playground shouldn’t be a big deal… the only thing is that we will expect a different kind of relationship with fb now… a little more serious now that we’re paying them money… are they ready?

Facebook Rolls Out Verified App Program, Plus One Hell Of A Revenue Model For Themselves:

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Motrin gets “Twittered”

An extraordinary thing happened this weekend. A major brand was “taken down” by Twitter. A good synopsis of the story can be found here

it includes the original add. But you should SEE the response on Twitter (#motrinmums). I myself first heard about from @dancingmango and a very good post on his blog which shows the spikes in activity. Marc’s post and the whole unfolding of this event makes, more than ever, the case for marketing to get out of their entrenched positions and get up to speed with the ways in which consumers are able to communicate now and to understand the importance of the power of the consumer to the future of their brands. More than just showing themselves up as an out of touch team they followed up with a classicly poor apology in which tehy didn’t even say sorry and skirted around the issue by apologising for disappointing their consumers. Geesh this isn’t your DAD telling you off for coming in late… this is your BOTTOM LINE telling you to because you took a liberty!

However is this a fair response to the situation? Some, but notably male, comments on the article point out the “Mobs are inherently unpredictable…” and is probably right. Do we believe that Motrin really wanted to create offense? Do we believe that Motrin DIDNT think they were genuinely connecting with their customers? When journalists get a bee in their bonnet about something in the UK we often blame the hacks for stirring up a storm in a tee cup… can we say the same about the Twitter Mobs… did they get themselves in a mess about nothing?

Does it matter if the end result is your web-site is down for a whole weekend and the whole world thinks you just took the michael out of Mothers worldwide?

I think it does matter if we are to have a sane world in which we all consider the impact of our conversations, the truth of our communication (both sending and receiving) and are going to truly understand each other…

but what certainly matters more is saying sorry properly…

Oh dear…

Starbucks’ Service Commitment, Starbucks Service Moment

Starbucks’ Service Commitment, Starbucks Service Moment:
An excellent quick overview of the commitment some companies are willing to make to improving their customer service and a great story from the frontline of the wider impact Magic Moments can have.

Whilst it is difficult to measure that impact it is certain the moments like this make customers feel more significant and the on the old hierarchy of needs that’s right up there. If I can have a retail experience that also makes me feel significant I’m going to get quite loyal to that brand. How else would Apple have survived the debacle that was the iPhone 3G launch without loyal customers who were looking for more than just a phone and so were willing to put up with the annoyances of getting the ‘phone’ bit right.

What Magic Moments are you creating for your customers now? What would need to happen for you to be able to take a “moment”, as Starbucks have done, to get with your front-line and get everyone motivated to create excellent experiences for your customers?

dancingmango » What is it that makes your product distinctive?

dancingmango » What is it that makes your product distinctive?:

My recently easternised friend and excellent customer experience dude, Marc McNeill, has found a fantastic interview with The Master Brewer for Guinness. In the world of technology and consumer products/services we might equate him to a Product Manager/Developer. He has an on the ground responsibility for producing the end-product.

Our Master brewer shows that his priorities lie with an overall customer experience and how his product features (flavour, colour etc) fit in with that… the actual product features are the last thing he mentions.

Marc challenges us to think about what this means for the way that we organise ourselves around defining the customer experience in the context of developing innovative and irresistible products

There are very few master brewers who go beyond just satisfying their customers with features and functionality, to focus upon delivering “a great all round experience”. To turn the mediocre and mundane into theatre. Like Apple have done with the iPhone. Like Guinness do with their stout. Yet something gets lost as you move away from the strategic owners of the Brand, to those responsible for tactical implementations. And this loss can obviously be costly. If the Guinness Master Brewer was only responsible for a drink that is an acquired taste, would it still be the sixth top ranked global Beer brand?

This is an example from a single product world, but in many companies we are dealing with developing individual products that bundle together to form the consumer proposition. Understanding how we can enable our Master Brewers to be responsible for excellent flavour that complements the rest of the products on our menu is key to being able to offer value at a consumer level and understand the profitability of our component products…

I would look to companies such as Apple, Telcos (where there are often many components to the end-bundle a customer might buy) and premium financial services to see how they organise themselves around understanding customer needs and delivering a selection of products to them that together create an overall experience. There is a lot an organisation needs to do to be able to deliver an end to end experience across a range of products and services. Guiness has the luxury of being fairly single-product minded… for the rest of us we need to make sure our organisation is lined up to deliver not just our product developers…

Can Payroll be linked to Increased Sales?

I was recently in our local B&Q DIY store and followed a classic strategy of mine to solve our “sanding and varnishing” challenge.

  • Research the product online
  • Check product availability
  • Check store location and opening times
  • Go to store to get more information and purchase

This store certainly had a large range of products in the section we needed, some were fully in stock and some weren’t however it wasn’t until I was able to talk to a very knowledgeable employee that I was able to be confident that what I needed…

  1. existed and
  2. was in stock in this store and could therefore
  3. make a purchase.

We had, to be fair, been in another store earlier and not found what we needed… but in that store there was no-one knowledgeable to help us. We left confident that there was no stock of what we wanted to purchase… and went to another store (fortunately for B&Q another of theirs…)

So I was interested to stumble upon a Wharton Business School article which links the satisfaction of customer experience especially around stock availability and making purchases with… yes you guessed it… knowledgeable staff.

In short, customers get lower satisfaction from their shopping experience when stores have too few employees and, more importantly, when stores lack employees who are knowledgeable about what’s in the store.

Further more the study actually links increases and reallocations of payroll (around staff availability and knowledgeable staff) to increase in sales via increased customer experience scores. At times they were able to show an $1 increase on a staff member to a $4-$28 increase in sales!!!

So before you jump straight to your supply chain technology, or customer relationship database to see where you can eak out a better bang for your buck, may be this week have a look at where you are investing in some of your most valuable assets and see how you can better leverage your staff to deliver a consistent, excellent customer experience…

I would be willing to bet that the store we finally purchased from, whilst bigger, was not more successful because of size of stock availability but actually because of the range of knowledgeable staff it was able to support in guiding customers through their in-store experience.

The full report is available on Knowledge@Wharton (free to register) which is an excellent resource for all Business related research including the many ways in which customer experience is becoming more and more integrated into boardroom level decision making strategies.