Archive for May, 2016

Five Ways For Banks To Boost Credit Card Use

Friday, May 27th, 2016

credit-cards-04-fiEver since I got my first credit card in the late ’80s, I’ve been a major fan of plastic. Rewards, deferred payment and a built-in line of defence from fraud – these are some of the reasons I pay with credit cards as far as possible.

That said, during the same period, I’ve come across many people who’re wary of using credit cards. When I ask them why they eschew plastic, they give me several reasons, some of which are genuine (e.g. fear of incurring hefty fees if they forget to pay the bill on time) and others, rooted in misconceptions (e.g. credit card implies debt).

Banks earn interchange fees when their customers pay with credit cards. On the other hand, when consumers pay with cash, banks are hit with a double-whammy: They incur a cost on the ATM withdrawal but they don’t earn any interchange revenue on the cash transaction. Therefore, it’s in their interest to increase credit card usage (and reduce cash usage).

There are many ways by which banks can stimulate credit card volumes by helping fencesitters among their customer base to shed their inhibitions towards credit cards. Some of them are outlined below.

#1. Reiterate Deferred Payment

The average customer knows that they get up to 45 days to pay off a credit card purchase without incurring any charge. This is unlike debit card purchases where the money is taken off from the payer’s bank account within a day or two. It would help if banks reiterate this message, especially to convert debit card usage to credit card.

#2. Stop Nickel And Diming

nickeldimeAs far as I can recollect, all my credit card statements have always specified the payable amount to the second decimal place viz. ? 48,758.78. Since the 78 paise seems to be such a big deal for the bank, it can go ahead and round up the payable amount to the next higher ? (or £ or € or $, as the case may be) viz. 48,759. I’d rather overpay by 22 paise than incur late payment fees and interest charges if I miss out the 78 and pay only ? 48758.

#3. Alert Due Date

I normally pay my credit card bills well before they’re due, so I shouldn’t expect to get a reminder for payment deadline from my card issuer. But, on the one occasion that I forgot to make the payment – more on that in Credit Where Credit Is Due – HSBC Case Study – I didn’t get any alert from the bank. Therefore, I’m assuming that issuing reminders is not an industry practice du jour. It should become one. By sending an alert a couple of days before the due date, banks can assuage the common anxiety many people have of incurring hefty fees if they forget to pay the bill on time.

#4. Make Redemption Frictionless

The rewards redemption process is fraught with friction at several steps: Accessing the gift portal via SSO from Online Banking fails half the time; gift portal is unwieldly, so by the time you select your gifts and add them to the shopping cart, the portal times out and you have to start all over again. Once you’ve placed the order, you’ve to follow up with the bank and / or courier company to prevent theft, which is not such a rare occurrence as I’d highlighted in Beware of Credit Card Reward Redemption Theft and Bank Insources Credit Card Reward Redemption Theft.

Instead of making customers jump through so many hoops to get what’s rightfully theirs, banks should make sure that cardholders can order and receive their gifts in a painless manner.

#5. Increase Credit Limit

According to Balance Due: Credit Card Debit Nears $1 Trillion As Banks Push Plastic in Wall Street Journal, CapitalOne, the fourth largest credit card issuer in the USA, increased credit card spend 20% year-on-year by raising spending limits. So can other card issuers.



The above list is by no means exhaustive. I’m sure readers can think up of a few more ways to stimulate credit card use.

I’m also sure that skeptics among readers will be wondering why a bank shouldn’t just continue with the status quo. After all,

  • by making the gift redemption process cumbersome, banks discourage cardholders from claiming their gifts, which leads to breakage, which in turn saves money for banks
  • by specifying the payable amount to the second decimal place, banks will earn late payment charges and interest charges when cardholders pay only the amount before the decimal place, which would count as shortpayment.

I wouldn’t disagree with the skeptics: Banks do have a vested interest in ignoring my above suggestions.

That said, I’m quite optimistic that there are banks out there who’re more customer-centric (or at least wish to appear that way!). By implementing one or more of the above measures, they can potentially

  • earn greater interchange revenues when credit card volumes go up
  • save cash handling and ATM costs when cash volumes come down
  • regain the trust that they’d lost in the wake of the Great Financial Crisis

If my optimism is misplaced, there’s always regulation!

Should You Ask Your Customers What They Want While Designing A New Product?

Friday, May 20th, 2016

ask-fiOne perennial question that startups and even product managers of established companies face while designing a new product is whether they should ask customers what they want.

I’m no Fanboy but I’m with Steve Jobs on this subject:

“It’s really hard to design products by focus groups. A lot of times, people don’t know what they want until you show it to them.”

There are a few problems with asking customers what they want:

  • Your customers won’t always be able to tell you what they want (even if they can immediately like or dislike what you give them). As the famous saying attributed to Henry Ford goes, “If I had asked people what they wanted, they would have said faster horses.” (rather than automobiles)
  • Methodologies like surveys and focus groups employed to find what customers want depend on observation. As a result, they suffer from the marketing variant of quantum mechanics’ famous Heisenberg Uncertainty Principle: The act of being observed affects the subject’s behavior. In other words, what customers say when they’re asked about something is not necessarily the same as what they think otherwise.

Even if you manage to overcome these hurdles, you’d still only get ideas for a Minimum Viable Product.


To go beyond an MVP and create a truly pathbreaking product, you must study live customer experiences, conduct thought experiments to envision the full potential of what is possible and develop your product to achieve that potential.

Let me take Apple Pay as an example.

Before and after Apple Pay, most mobile wallets work as follows:

Reach checkout; take out smartphone; enter lockscreen password; reach homescreen; locate mobile wallet app; locate card.

While all this sounds fine on paper, this design is not fit for purpose in a real-life environment because of the following reasons:

  1. There’s a lot of friction in locating the mobile wallet app from among the scores of other apps installed in the smartphone
  2. It’s not easy to find the specific card with which you want to pay at a given store (think Card A for business expenses and Card B for personal expenses)
  3. You’d hold up the queue while doing the above
  4. Patchy network connection will scupper the whole process.

apple0286In sharp contrast, with Apple Pay, there’s no fumbling at the checkout to find the mobile wallet app or the appropriate card because they both happen automatically. There’s no need for network connectivity or GPS at the Point of Sale. As highlighted in my previous post Apple Pay Puts Banks Squarely At The Center Of Mobile Payments, Apple Pay solves many of the hurdles that come in the way of mainstream adoption of mobile payments.

I know that’s Apple. You may be justified in thinking that Apple is too much of an outlier to serve as a lighthouse for the whole technology industry.

So let me give you another example: SalezShark.

SalezShark-The-New-Age-CRM-Your-Business-can-not-Ignore-featured-750x300India’s IT industry association NASSCOM recently selected this relatively unknown SAAS solution to power its sales operations. The startup behind this product attributes this prestigious win to its efforts at going beyond its more established rivals and offering the Relationship Intelligence and Recommendation Engine functionalities in its product. According to the NASSCOM executive quoted in SalezShark to handle Nasscom sales operations, these two modules are “not offered by any other product”.

So, whether it’s the tech powerhouse Apple or novice SalezShark, envisioning the full potential of what is possible and delivering a product to achieve that potential is key to creating pathbreaking products. Not asking customers what they want.

While this blog post is centered around new products, the same approach is also applicable for building enhancements to existing products.

3 Ways To Get Approvals For Case Studies From Reluctant Customers

Friday, May 13th, 2016

In Right And Wrong Ways Of Using Case Studies, we saw when to use case studies and when not to.

Let’s now assume that a technology vendor has reached a certain stage in the sales cycle when it is appropriate to use case studies to progress the case. Building an inventory of ready-to-use case studies is often a challenge since many customers are reluctant to issue approvals for case studies. This post is about overcoming this challenge.

There are three common ways of securing a reluctant customer’s approval for a case study:

  1. Restrict circulation channel
  2. Alter benefit proposition
  3. Masking


casestudy-approval-formCustomers generally tend to think that a case study will be put out in the public domain. Based off that perception, many of them decline case studies for several reasons like “I’m not authorized to talk to the press on my company’s behalf”, etc.

You can win over such reluctant customers by offering to restrict the channels in which the case study would be circulated.

Send them the case study with an approval form (simple template given on the right). In the form, list all channels viz. website, newsletter, DM, media stories, journal articles, ads, etc. Ask the customer to check which channels they’re okay with.

You’ll be pleasantly surprised to find that even the most reluctant of customers will check at least one or two boxes in the approval form.


In a Digital Marketing campaign conducted for a Bank, the ROAS (Return On Advertising Spend) delivered by various channels is given below:

  • Retargeted Ads: 30
  • Search Engine Marketing: 14
  • Email Marketing: 12
  • Social Media Marketing: 5

NOTE: We’ve changed the customer’s name and industry in order to preserve confidentiality but the figures mentioned above are factual.

We wrote up the case study with the following two variants of the benefit statement, one in which the customer company and contact were identified, the other in which they were masked:

  • Statement A (Identified): Ms. Jane Doe, the head of marketing of ACME Bank, found that Retargeted Ad delivered an ROAS of 30, which was 2X of their next best performing channel.
  • Statement B (Masked): The head of marketing of a leading Bank found that Retargeted Ad delivered an ROAS of 30, which was 2X of their next best performing channel.

casestudy-approval-01We sent both versions to Ms. Jane Doe. She came back with the following statement:

Statement C: Ms. Jane Doe, the head of marketing of ACME Bank, found that Retargeted Ad delivered twice the ROAS of their second best performing channel.

If you notice, Statement C is more powerful than Statement B because it identifies the customer and contact by name although it is less detailed than Statement B since it skips the ROAS figure of 30.

In an ideal world, everyone would love to have Statement A in their marketing arsenal. However, in the real world, there are many extraneous factors driving case study approvals. Therefore, even if the benefit proposition is slightly diluted in Statement C, it’s still very useful.

In any case, a case study with some benefit propositon is better than one without any.


There are times when a customer is simply not prepared to draw attention to their company in any form. For example, when they use a certain technology to gain competitive advantage and wouldn’t like to prematurely alert its competitors to its plans.

All is not lost.

Even in these situations, marketers can develop case studies. They can do so by masking the case study. In this technique, you don’t reveal the name of the customer at all. Instead, you use a “surrogate” expression to refer to the company. For example, if you’ve supplied a payments software to Barclays Bank, you’d say “payments software for a Top 5 UK Bank”. Note that we’ve said “Top 5” even though the bank in question is the largest bank in the United Kingdom. This is the key in using the masking technique – you need to strike the right balance between being totally vague (“UK company”) and totally specific (“largest UK Bank”) about the customer.

There’s no question that a masked case study is less effective than a named case study but it’s the only way forward at times and a masked case study is still better than no case study.

Which is why even leading companies resort to masked case studies from time to time. Take Infosys for example. There are 16 case studies under Financial Services. Fourteen of them are masked, with Nomura and UBS being the only two companies identified by name. Airtel is another example: In a print ad, the leading MNO uses the rather plain-sounding surrogate “a leading bank” to mask a customer for its Intelligent Connectivity Solutions.


That said, marketers should constantly strive to gain approvals to disclose the names of even their masked customers on a selective basis.


There are even more ways to secure a reluctant customer’s approval for case studies such as “time-shifting”, and so on. However, since the exact way to use them is determined on a case-by-case basis, we haven’t covered all of them in this post. If you’re facing a challenge with a specific case study situation, please feel free to contact us for guidance.

Just Because Customers Can Find Their Own Solutions Doesn’t Mean They Will

Friday, May 6th, 2016

hbr-quoteThere’s lot of information in the public domain. Buyer 2.0 is Internet-savvy. So they will find solutions to their pain areas by themselves. Ergo salespersons should stop trying to sell solutions to potential customers.

This is the sum of essence of one current school of thought in B2B sales (cf. this LinkedIn Discussion Thread).

We beg to differ.

We don’t deny that there’s lot of data in the public domain about pain areas, solutions and individual vendor offerings, along with ratings, reviews and social proof. But most B2B technology buyers expect – and gladly accept – external assistance to figure out how all this information applies to their specific circumstances.

We’ve come across many reasons for this behavior:

#1. Research Is Not Free

There’s a huge amount of effort required to compile and analyze the information available on the Internet. This costs a lot of time and / or money. If vendors clamor to do this for free, why should prospects decline the help?

In our experience, most savvy buyers accept free-of-cost help from sales, while continuing to tap other sources in parallel for validation.

#2. Self-Service Is Painful

Many vendor websites suck. Prospects go round-and-round without being to find what they want.

Take Bose for example. The combination of its banner ad and landing page was a huge conversion killer when I was shopping for headphones recently.


Since I couldn’t figure out what to do on Bose’s website, I decided to postpone the purchase of the headphones until I found the time to visit its store.

The situation is even worse in B2B. MTS, the leading MNO, recently advertised a new plan on my Yahoo Mail! homepage. When I clicked through to its landing page, the advertised plan was not available for my state (Maharashtra). I started pulling my hair.


Not surprisingly, a lot of B2B content is wasted.

#3. Can’t Find My Solution

Now, prospects who labor on and overcome the above hurdles will find the proverbial pot of gold at the end of rainbow, right?


Quite often, prospects might find multiple solutions for the same pain point. For example, after detailed research, a retailer suffering from pilferage from their warehouse may see more than one way to solve their problem. Their options could be (A) Double down on security staff at the warehouse (B) Install CCTV at the warehouse (C) Monitor movement of items in the warehouse by tagging them with RFID.

How does this retailer select one of the three options?

I guess they would conduct some more research. Even if they manage to lay their hands on pros and cons of each alternative on the public domain, they’re still quite likely to be undecided.

An RFID solutions provider has a great opportunity to engage with the retailer and steer the retailer towards Option C.

Per contra, if the vendor does not engage with the retailer, it might find that the retailer has chosen Option A or B. Once this has happened, it would become terribly difficult for the vendor to make the retailer reverse their decision and opt for Option C instead.


If all else fails, there’s always schmoozing.

Until Google Search and all the online data and tools learn how to schmooze prospects, only sales can sell this “solution”!