Monday, August 31, 2009

New URL:

So as I have started blogging more regularly, I thought it will be worth to invest a little to develop my personal brand and get an easier URL for my blog.

After a lot of thought and search, I settled on

Please update your bookmarks and I look forward to seeing you

Thursday, August 27, 2009

My bank and my goal to heal the world...

What exactly is self-actualization? Located at the peak of Maslow’s hierarchy, he described this high-level need in the following way:

"What a man can be, he must be. This need we may call self-actualization…It refers to the desire for self-fulfillment, namely, to the tendency for him to become actualized in what he is potentially. This tendency might be phrased as the desire to become more and more what one is, to become everything that one is capable of becoming."

In the previous 4 posts, we discussed how banks can fulfill the physiological, security, psychological, individualization and self-esteem needs. In this last post, I will talk about my wish-list in how a bank can help in the greater good for the society.
  • Where to invest: Currently I have no transparency on how where my deposit money gets investment. I want to know and "choose" where my bank can invest my money: arts, developing countries, green sector, infrastructure. The rates may differ based on the return and risk associated with each sector.

  • Where to earn: I want to do business with a bank that cares about me and the planet we live in. So I want to know the energy impact my bank is having on the environment. GreenChoice Bank is leading the way in this sector with LEED certified buildings, near paperless back office, employee incentives on environmentally friendly choices.

  • Who to give: Banks are in the business of making money. But I want my bank to earmark a certain percentage to offer loans and deposits at more attractive rates to customers and businesses who are investing in Green or community development projects.

  • Where to spend: Last but not the least, I want my bank to be engaged in community development and spend part of their profits to give to non-profits and the disadvantaged.
That said, banks will think about all of this if it means more customers and more profits. Do you think a bank can create sustainable advantage over its competition by focusing on our self-actualization needs?

Wednesday, August 19, 2009

Can your bank affect your Self Esteem??

How can Banks influence Self Esteem? Aren't they too far away from the consumer and passive to influence them?

Then I came across the work of Nathaniel Branden and my thinking became clearer. Our self-evaluation is the basic context in which we act and react, choose our values, set our goals, meet the challenges that confront us. Our responses to events are shaped in part by whom and what we think we are -- our self-esteem.

This is the fourth post in the series to discuss online banking transformation.

Banks can spur self esteem by offering customers innovation, self-management and personal responsibility.
  • Innovation: Innovation can either be on WHAT banks sell to the customers or HOW they sell it or WHERE they sell it. If banks truly understand the needs and timing of the customer, they can provide the customer a full range of service from savings to credit cards to financial planning to insurance (auto, home, personal) to investment and brokerage services. Banks need to view the customer from a "transaction" to a "series of interactions" to make this possible.

  • Self Management: Currently Bank of America offers me alerts post event or in a reactive manner. It tells me I have hit a low balance AFTER I hit a low balance or when I am going over-limit on my credit card. What if banks were to predict and prevent the event from happening. Say the bank looks at all my scheduled bills and realizes I am $1000 short for my upcoming mortgage payment, it sends me an alert asking me to transfer funds into the account.

    Or taking this even further, what if the bank (based on a set of rules and my pre-authorization) automatically withdraws money from my external ING savings account. The bank should at all times keep track of all bills I need to pay either through the online bill pay suite or by checks or by electronic debits or credit cards so I am never hit by overdraft charges.

    And why should the bank forego the precious fee earned from overdraft charges? Well, if I have taken the pain to link all my external accounts with BOA for automatic debits, they can be certain I will not be leaving them for any other bank.

  • Personal Responsibility: Through the use of online communities and offering financial planning advice, banks can educate their customers to become more financially responsible. Furthermore, through personalized products and services, banks can help their customers achieve their financial and personal goals.
    Paypal recently launched an initiative where you can track if your kids are being responsible with their spending habits.
I would be interested in hearing your comments

Previous Posts in this series
Part 1. Online Banking and Maslow's Hierarchy of Needs
Part 2. Online Banking: Communities Help Meet Psychological Needs
Part 3: Banking for the myPOD Generation

Saturday, August 15, 2009

Banking for the myPod Generation

This is the third post to discuss the transformation in online banking. In the previous posts, we discussed how the transformation in online banking can be mapped to Maslow's hierarchy of needs model and what banks can do to meet the customer's psychological needs.

Here, I offer some thoughts on what banks can do to offer personalized service and custom products. The online retailer Amazon is best known for one-on-one marketing. Amazon makes recommendations based on my profile, past purchases, what I view on the site and what others like me have bought.
  • Stop Spamming Me: First, banks need to stop asking me to open accounts I already have or am not interested in. Bank of America needs to know that if I have clicked "No Thanks" a 100 times to the credit card offer that gets displayed once I log off my account, then I am not interested in their offer.

  • Personalized Products: In the last post, we had discussed the idea of launching consumer communities based on interest areas. Banks can offer customized products to community members.
    Say one of the goals that I have listed in the financial planning community is to save for a month long vacation in Hawaii. The bank can offer me a co-branded credit card with American Airlines with 25000 upfront miles for my Hawaii air-ticket.
    Or based on the analysis of my spend the bank figures that I like to dine out a lot at the NYC restaurants, the bank can offer me a Zagat loyalty card offering me 5% cashback for every dollar spent on dining.
  • Analysis and Planning: In a Gartner study, consumers listed the the ability to analyze spending and cash flow as one of the top features they are looking for in online banking. ING Direct allows you to create different based sub accounts. To take that a step further, banks should allow consumers to set up goal based accounts with contributions directly debited from salary. There should also be a tracker available that I can put on my bank home page.
    From a spend analysis standpoint, banks should allow me to tag the transactions and then search the transaction based on tagged info or merchant name or purchase date or item name.

  • Consolidated Reporting: Banks need to offer me the ability to link and view all my financial accounts & transactions across different institutions. I want to be able to look at my different savings and checking accounts, auto loan accounts, mortgage accounts, brokerage accounts, 401k and insurance accounts all from bank's portal.
    From the bank's perspective, having access to all this information is huge. This will give them a complete picture of my financial situation allowing them to offer me customized products and services. Also, banks can better assess their risk exposure on me and price their products accordingly.
    For the consumer, I don't have to sift through piles of paperwork and collect all the junk or go through the multitude of websites.

  • Customized Design & Layout: Banks can offer layout and site customization based on demographics, interests, user sophistication and age group. For instance, the younger audience may be interested in adding widgets related to student loan or getting specific feeds from the online communities they subscribe to or other financial planning tools added to their home page.
    However, people in the 50 plus age group may look for a simpler interface and easier communication, bigger font sizes, widgets for retirement and insurance and live online chat for any help needed.
    There may be another set of people who may want to set the background page to their favorite NFL team logo.
Finally, for new customers, make switching accounts easy. Banks need to assign a personal representative who will set up direct deposit with my employer, and transfer all the payee information and transactions where I have set up online bill pay and direct debits.

In the next post, we will discuss how banks can help consumers achieve their financial goals.

Previous Posts in this series

Part 1. Online Banking and Maslow's Hierarchy of Needs

Part 2. Online Banking: Communities Help Meet Psychological Needs

Monday, August 10, 2009

Online Banking: Communities Help Meet Psychological Needs

In my last post I introduced how the transformation within Internet Banking can be mapped to Maslow's hierarchy of needs model.

In this section, I offer some thoughts on what banks can do to tap into the Psychological Needs of the customer. Psychological need can be defined as the need for assimilation and for differentiation.

Assimilation refers to the desire to feel ‘inclusion within larger collectives’, whereas differentiation refers to a desire to ‘distinguish [oneself] from any other persons in the social context’.

Well, in the financial services context, banks can achieve a lot of this by creating communities of consumers (My previous post on creating communities is a good start). Following are some thoughts on the various activities community members can engage in:
  1. Financial Planning: Members can offer each other support and advise to meet their financial goals. To make it simple, each member (say A) will be allowed to post their top 3 goals on their profile with a tracker to see how they are doing to meet their goals. Other members can offer tips and support to keep the member A on path to achieving her goal. To create more value, the banks can "lend" their financial planners to provide professional guidance to the community members. Members can pay the bank for more tailored or 1:1 advice, creating a revenue stream for the bank.

  2. Peer to Peer lending: Banks can offer peer to peer lending services by allowing their community members to lend to each other. Banks already have enough information about the customer to assign members a credit score (based on account balances, number of missed payments, number of times account was overdrawn etc.) and ascertain credit worthiness of the borrower. Banks can also compete with individual lenders to offer credit to the most worthy borrowers.

  3. Comparison Budgeting: Nothing gives us more satisfaction than finding out how we did relative to our neighbor or co-worker or friends. Extending that to that financial context, banks can allow community members to compare their spend on particular items (grocery, utilities, entertainment, dining etc) to the average spend in each category by their community.

  4. Test Platform: From a bank's perspective, they can use the different communities to test out new products and service ideas before rolling them out in the market. The community members being the more engaged customers are more likely to give the bank quick and honest feedback.

  5. Special Interest Communities: Banks can create communities around different themes and interest areas. One such community could be "How I got out of debt": Community members can share real life examples on how they got out of the debt hole and are staying on a path of financial freedom. Another example could be a small business community. Open Forum is a good example of a social community sponsored by American Express that targets small business owners and provides videos, articles, expert blogs, success stories and advice from other business owners and limited networking opportunities. It functions as a hybrid between a networking community and a conventional portal.

    Banks can gain by offering customized products and services to such special interest communities, but more of that in the next post.
Previous Posts in this series

Part 1. Online Banking and Maslow's Hierarchy of Needs

Thursday, August 6, 2009

Online Banking and Maslow's Hierarchy of Needs

Internet banking is going through a transformation.

According to a study by Javelin Strategy & Research, eight out of ten US households now bank online, with 60 per cent using such services weekly and seven in ten utilizing them to pay their bills on a monthly basis. For banks, the opportunity is huge. Online banking customers are more profitable, carry more balances and have a lower probability to move to a competitor bank.

That said, banks need to do more. The banking customer has long evolved from the basic needs (Phase 1 and 2 below) in terms of ability to bank and pay bills anywhere, anytime via a secure and reliable network.

Firms like Zopa, Smartypig, Mint and Wesabe are pushing the envelope of what a traditional bank can or is expected to do.

To draw a parallel, I have adapted Maslow's hierarchy of needs to the banking model. I have divided the hierarchy model into 6 phases

- Phase 1: Physiological: the bank is available 24 X 7 X 365 and transactions are handled efficiently and effectively.

- Phase 2: Security: banking is simple and easy, secure and always on. The fee charges are clear, simple and fair.

- Phase 3: Psychological: develop a sense of belonging towards the bank. Am inspired by other people who have successfully managed their financials.

- Phase 4: Individualization: the bank provides me personal support and attention. I receive relevant and customized offers.

- Phase 5: Self Esteem: the bank helps me in achieving personal goals and alerts me on financial risks.

- Phase 6: Self Actualization: the bank supports me in my strive to improve the world.

Over the next 4 posts, I will cover Phases 3-6 at length and offer some thoughts on what banks can do to increase the lifetime value of a customer.

I would be interested in your thoughts and comments.

Tuesday, August 4, 2009

Size does matter: the secret sauce to building online communities

Why do we participate in online social communities? Well, to begin with, we are social animals and the social network provides us with a sense of affiliation, an opportunity to help and seek assistance; and finally boost our self esteem.

So what is the secret sauce to building a vibrant online community?

Mark Schaefer offers a formula to lay a good foundation for building an online social community: Connection + Meaningful Content + Authentic Helpfulness. If you feel connected with your network (sense of affiliation), exchange meaningful content and help each other (opportunity to help and seek assistance), then you are on track to build a successful community.

Well, then why do so many communities fail to deliver the promise? What goes wrong?

Groundswell classifies people into 6 different categories based on how they use the social technologies: Creators, Critics, Collectors, Joiners, Spectators and Inactives.

Most communities get started on the right foot: the members get to know each other and feel connected, they help each and offer meaningful content. Everyone seems to know each other and there is a healthy exchange of ideas. At this stage, most people are creators or critics with a few spectators. However, the problem creeps in when the communities become too big with too many diverse set of ideas, people and regions. Then it starts feeling like a waste of time.

Take any large LinkedIn or Yahoo group with thousands of followers and you will quickly realize that most of the people are either Joiners or Spectators or Inactives with a small minority of Creators or Critics.

So, my suggestion is to
  1. limit the size of groups (300-500 people): more of a manageable size.
  2. encourage likability: organize groups around a purpose or interests or themes; get people to know and like each other.
  3. give them a reason: give users a reason to keep coming back. Fresh and meaningful content, free exchange of ideas, seeking and providing assistance.
Diane Hessan, CEO of Communispace is a big proponent of small and interactive communities. In fact, she was the first person I started following on Twitter.

Finally, we need to look at a different set of metrics. We cannot simply look at the number of users or size of the community but have to consider the level of participation (percentage of users who are creators or critics), frequency of posts per user and length of posts (longer posts is directly correlated to more engaged users).

I am interested in your feedback. Please leave your comments

Monday, August 3, 2009

Monetizing Social Networks- will attribution be the answer?

Continuing on the topic of monetizing social networks, one of the problems in the industry is last touch attribution.

If you think about the purchase funnel, it starts from brand awareness to favorability to intent to action. Display advertising, the main form of advertising on social networks, is very powerful in creating brand awareness and moving the consumer to a favorable stage.

Click or Search advertising plays a big role in converting those leads into intent and action.

If we only follow the last touch attribution model, then all the work done by social networks to create brand awareness and purchase intent is lost. An interesting read on this topic is the keynote address delivered by Gian Fulgoni, chairman and co-founder of comScore, at the MediaPost OMMA Metrics & Measurement conference.

A potential answer for CMOs to measure their display advertising ROI on social networks and see what is being fed into the sales channel is marketing mix modeling (MMM). MMM uses multivariate regression techniques to analyze the sales and marketing time series data: it looks at how the different ad sources (display, search, video etc) contribute towards making a sale.

I don't think clicks are going away as a metric for ROI online. However, we will be shooting ourselves in the foot if we don't look at cross channel synergies and impacts.

Sunday, August 2, 2009

Monetizing Social Networks- what will the privacy advocates say?

A lot has been written and said about monetizing social networks. Investors are worried that sites like Facebook that has over 250 million users worldwide and is a market leader, don't have a clear business model.

Well, investors and marketers have to remember one thing that is different about social networks. When I go to say Facebook, I am interested in the conversations my friends are having and not really "looking" for something. However, when I do a search on Google, I am specifically looking for find something and am happy to click on the sponsored contextual ads that appear alongside.

As a result, social networks are mostly being used by companies to build a brand and engage with their customers and they are a great medium for that (building a brand and creating awareness is what we have been using the traditional media for since the beginning of time).

However, if you want to do anything more on a social network, keyword based contextual advertising is not the answer.

Jitendra Gupta talks about the concept of a universal profile that I found very interesting. Essentially, the concept is to create my unified persona based on my interactions on the web. And a universal profile combined with behavioral targeting can give very powerful results to advertisers and investors.

Think about this- If based on my interactions on the web, Facebook knows that I am married Indian male settled in New York with a wife and a son (and another on the way), it can serve me a good DR banner ad for a minivan I need to purchase. Ideally, they should also be able to bundle it with a good car insurance offer. And, who knows, I might click on it as well!!

Well, the privacy advocates may be up in arms against the concept of a universal profile getting combined with behavioral targeting. But I don't think my friends on FB who openly post their contact information on my wall care too much.

Thursday, July 30, 2009

Spokeo: Spooky as hell!

I recently came across Spokeo ( The website calls it a "unique people search engine specialized in finding online activities across various social networks and public databases. "

Unique it is for sure. But it is creepy. Spokeo crawls all your so called friends activities across the web (I found photos on Picasa and Photobucket that were never shared with me, Nanny wanted ads posted and activity across different social networks).

What makes it even more scary is that you can snoop on your friends without their knowledge or consent. AND the people you are spying on don't even need to be your friends. If you ever had an email exhange with them, Spokeo will use their email address to cross check over 40 sites including social networks, business databases, ecommerce stores, and other public databases. Think about that for a second.

Their new version also includes a business edition. Well it will certainly help the business of private investigators and stalkers.

Btw, if you ever visit their site (I know you are curious), don't enter your gmail or yahoo password.

Wednesday, July 29, 2009

The New Yahoo...the right direction, finally!!

Yahoo under Carol Bartz is definitely moving in the right direction. First the new and redesigned homepage and now the search deal with Microsoft.

I think the new Yahoo homepage ( is a lot better with the "My Favs" section that allows you to preview your favorites sites with a mouse-over and has a "Popular Searches" section. You can add any site you want I also like the uncluttered layout and "compact" view. One of the big improvements over iGoogle is that you add any site or email or social network or news feed (I added my blog) to the My Favs section thus making it totally personalized. Yes, there are some bugs in some of the widgets, but I think Yahoo will fix them eventually.

Considering that is the most trafficked site in the world, I think the new design is a big step forward. It will take more than a new layout or a search deal with Microsoft for Yahoo to pose as a real threat to Google. But hey, at least Yahoo is finally moving in the right direction.

Tuesday, July 28, 2009

Hire Smarter (or NOT) with Social Media

As marketing people, we love social media. And why not? Its comparatively inexpensive, has a broad reach and a variety of platforms available to establish thought leadership, demand generation and customer loyalty.

But one thing that companies need to understand before jumping onto the social media bandwagon is that social media is different from other online or traditional media. Social media is a sacred space. You get it right and you build long lasting customer loyalty. But if you get wrong, it is very hard to undo what you just did.

I recently came across this article on the Harvard blog about Hiring Smarter with Social Media ( While some of the ideas are good, I was astounded to read the following:
You can strike a balance by asking prospects to friend you for a limited time (24 or 48 hours) on any social network where they're personally identifiable, so you can see how they present themselves online and make sure there aren't any examples of bad judgement or online comments that could come back to haunt you (for example, griping about one of your clients).
Oh my god! A company who listens to this advice is not only limiting the pool of potential applicants but also exposing them to lawsuits related to discrimination. The info I share with my "friends" via Facebook or other such sites includes personal information that you would NEVER ask in an interview such as marital status, religious beliefs/affiliations, political views, etc.