I think one of the purposes of this blog, and your education, is to learn a variety of viewpoints and understanding that there are often many solutions to the same problem. File this one under ‘broadening your horizons.”
I remembered an article in the International Herald Tribune about a bank choosing a design consulting firm to handle their expansion.
When Umpqua, a small community bank in southern Oregon, decided to move into the big-city market of Portland in 1998, its executives figured that they would need a change of strategy. They also figured that they would need help.
Instead of turning to a traditional management consulting firm, they hired ZIBA Design, a local firm with offices around the globe that specializes in industrial design and branding…
…When the firm assessed Umpqua’s identity and roots - by, among other things, observing customer behavior - it found that, contrary to prevailing market wisdom, customers did not want faster service. What they wanted was what Vossoughi calls “slow banking” - the ability to “take time to think about their financial future and feel relaxed, not just go and deposit money.” They also felt that reaching financial goals meant being able to savor the small things in life.
Which is why the new Umpqua branches provide free designer coffee and encourage customers to surf on the bank’s free Internet service. Bank employees go to the Ritz-Carlton hotel training school to improve their service skills, which are delivered from behind concierge-style desks.
Since the makeover, which cost $250,000 in design consulting fees, Umpqua has completed seven takeovers. With $4.8 billion in assets, up from $140 million in the mid-1980s, it claims to be the largest community bank on the U.S. West Coast. The bank’s stock has gone from $10 five years ago, before the stock market bubble burst, to $23 recently.
Rather than following the growth models that Bank of America and Wachovia were using, Umpqua chose customer experience over customer acquisition. The article gives a review of the major players in industrial design and some other success stories. One of the themes that emerges is business making a choice, low cost or high service.
On a similar note, Wired recently interviewed Jeff Bezos of Amazon.com. When asked about allocating advertising dollars to other functions, such as customer experience, he said this:
Is this a trend?
Yes, more and more money will go into making a great customer experience, and less will go into shouting about the service. Word of mouth is becoming more powerful. If you offer a great service, people find out.In the magazine world, we rely on ads. Should we be terrified?
I’m not saying that advertising is going away. But the balance is shifting. If today the successful recipe is to put 70 percent of your energy into shouting about your service and 30 percent into making it great, over the next 20 years I think that’s going to invert.
