Royal Bank of Canada (RBC)
Marketing is a discipline that thrives on ideas — ideas for new markets, better products, more effective promotional campaigns; ideas concerning smoother administration and better customer service. However, no financial company (or any company for that matter) can survive solely on one good idea; you need a constant flow.
How do you nurture this steady stream of creativity, or is it even possible to do so? Sources for good ideas are plentiful — financial and marketing journals, business newspapers, suppliers, customers, employees, and even competitors. This chapter explores just a few examples of how some companies found their best marketing notions.
FROM THE MOUTHS OF BABES
Traditionally, management sessions and competitor copycatting have been the only sources of new marketing ideas. However, there is another way — go to your employees.
James Shanahan, sector vice president of Marketing for MasterCard International, believes that employees can be a goldmine of new ideas, particularly those who are in close daily contact with customers. His belief is based on experience: “Staff who have contact with customers in a service organization are a fantastic source of ideas about what can be done better or about new products. These people have probably been the best source I’ve ever had for new ideas.”
Shanahan recalls a specific example of employee input during his days with a large U.S. full-service bank. The bank’s customer-service people had noted that clients were constantly seeking answers to basic investment questions such as, What kind of certificate of deposit should 1 buy? or, Should I consider a money-market account instead? With no official bank support, staff were trying to serve these people by providing financial planning advice based on the employee’s own personal experiences.
“Customers want this service,” stressed the hank’s stall, “so let’s give them what they want and formalize what we’re doing already.” That is exactly what their employer did. Financial Plans were offered to hank customers at a cost of $20 each. And to encourage stall participation in the project, $20 cash bonuses were handed out to employees for each plan sold. The final tally at the end of a six month lest phase in eight branches reached 750 completed plans at an average asset value of $45.000.
Shanahan also saw employee idea generation work well in a former position with a rival credit card company. Me recalls, “We did focus groups with customer-service people on an ongoing basis.” The firm also developed an idea prize catalogue, targeted at those employees who had a lot of customer expertise, for example, the company’s sale- force. Points were given for each new idea submitted, with additional points accruing as the idea moved through the various stages of new product development.
If an employee’s idea actually made it to the last phase and was introduced to the public, he or she would receive 100 points. Points could be traded in for increasingly more attractive gifts from the catalogue-. “Not only did it work in terms of creating new ideas but it was a great morale builder as well.” says Shanahan.
THE ROYAL BANK OF CANADA (RBC)
‘ “GREYPANTHFHS’ AN EMPLOYEE IDEA
The Royal Bank’s Grey Panther Project grew from an employee idea. Substantial customer assets were flowing out of the bank due to a missed selling opportunity by bank staff. Many Canadians hold large- amounts of money with their financial institutions in a pre retirement vehicle; called a Registered Retirement Savings Plan or RRSP. However, under Canadian tax legislation, at the age of 71. consumers must terminate: their RRSP plans, with only a limited number of options to choose from in disposing of these funds.
The Royal B ml- would have preferred that its RRSP clients transfer retirement funds to an option known as a Registered Retirement Income bund (RRIF), a product available through the bank. Unfortunately, due, to its complexity, a RRIF is time con sinning and difficult to sell at the branch level so Royal employee’s were neglecting to inform clients of this option.
This left customers with no choice but to take their RRSP funds out of the bank for options offered elsewhere. Putting this problem into a numbers perspective, this is how things shaped up: by 1985, Royal’s total RRSP deposit volumes exceeded $3 billion, yet only $11 million in RRIFs had been sold during that year. Quite obviously, such a trend could not be considered a healthy one for the bank.
But fate took a hand. A letter from an ex-branch manager bemoaning the waste of good banking talent as a result of employee retirement arrived at head office. The bank’s marketing team saw a glimmer of light in this criticism. Why not use retired bank employees to sell RRIFs to pensioners like themselves?
Seven willing ex-employees were tracked down, put through a regular sales training program and sent on their way. Sales of $500,000 during the test phase encouraged the bank to commit additional funding to the Grey Panthers Project, a name chosen for this non-traditional selling team by the participants themselves. Larry Wyse, then manager, Sales Programs, Personal Banking, recalls the very positive response from customers to the program: “They identified very closely with our representatives.”
In response to information gleaned through debriefing sessions with the initial seven Panthers, a special one-week training program was devised, catering to the specific needs of the Grey Panthers sales force.
The Royal had no intention of making the Grey Panthers a stand-alone sales force. Explains Wyse, “We did not want to upset the branches by taking away their responsibility for business generation.” Thus, each team member was assigned to a branch and had access to RRSP files as a source of potential customers. These files identified RRSP customers who would turn 71 within a year. Branch managers sent a personalized letter to each of these prospects, introducing the pensioner who would subsequently come calling.
Twenty thousand dollars of newspaper arid magazine advertising in local media supported the retirees’ direct selling activities throughout 1986. A typical ad, for example, showed nine of the pensioners under the headline, “Our retirement planning team can help your retirement savings go the distance.”
The Royal celebrated the initial success of The Grey Panthers through its many branch employee newsletters (Fig. 5-1), including a special write-up praising the gentleman who had provided the idea in the first place. However, the bank didn’t stop at just thanking the fellow. “We awarded him a: check for $1,000 initially, plus an additional $9,000 when the project was so successful,” recalls Jim Walker, vice president of Marketing and Sales, Personal .Banking.
In 1986, during its first full year in operation, Grey Panthers sales reached nearly $32 million, followed by a $130 million inflow for 1987 — a profitable testament to the innovative use of
a non-traditional sales force,
ON THE CATTAILS OF THE COMPETITION
Taking advantage of ideas generated by your competitors is still 3 a profitable pasttirne, as Midland Doherty Financial Corporation can affirm,
MIDLAND DOHERTY FINANCIAL CORPORATION
SELLING “THE REAL THING”
Just a few years ago, most Canadians were unfamiliar with the U government debt security known as the Treasury Bill (T-bill). However, when one of the country’s largest trust companies, Canada Trust, introduced a new T-bill account, Midland Doherty Financial Corporation’s former marketing manager, John Vivash, saw a chance for his company to ride on the trust company’s coattails.
“They were going to make a product from my industry very acceptable,” recalls Vivash. : Midland capitalized on this happy turn of events by launching a newspaper advertising campaign for ‘””the real tiling,” offering a better rate than the Canada Trust product. These ads emphasized rates, pure and simple. “Normally, we speak in a soft voice but this was one of the few times we shouted our message,” says- Vivash.
“We shouted loudly and; it was incredibly successful.” The gamble did indeed pay off handsomely — not only did the firm acquire $73 million of new money but the accounts of their new customers were 30% larger than the company’s average. Proclaims Vivash, “It was a real win in terms of quality of accounts to the firm.”