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74 posts categorized "Web/Tech"

April 18, 2014

Love, e-Merican Style!

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by Ron Daly

Loveemerican

Ahh, love. There's nothing like it in the world. Boy meets girl, boy loses girl, boy goes online to find a new girl, boy meets girl online, boy marries girl online, boy decides it was a doomed relationship from the start and gets divorced online...

Tale as old as time.

"BUT WAIT!" you cry, "You can't get married online, and you certainly can't get divorced online."

Well, I'm here to prove you wrong. Welcome to: 

LOVE, e-MERICAN STYLE! (You can write your own fancy theme music in your head.)

Americans are living their lives online, there's no two ways about it. It takes a certain degree of Internet obsession not only to date online (through eHarmony, Match.com, or any of the dating apps out there), but to get married online. 

There are only a few states in which you can be legally married online, but the posibility exists. A little money, a little wi-fi, an officiant and a Skype-kiss and bing bang boom...you're married. Typically this happens for religious reasons or for troops stationed overseas, but imagine what will happen when the e-Dating set gets hold of this idea. No muss, no fuss, and a heck of a lot cheaper than an actual wedding? It's a great idea. And all your registries can be on Amazon...

So you already took the plunge and it's five years later. The bloom is off the rose. Your once fiery passion you celebrated over the glow of your iPhone has fizzled. What do you do? Well, you already got an online marriage...maybe you need an online divorce.

WeVorce is a San Francisco-based startup that focuses on speeding unhappy couples through the divorce process. Run by a divorced husband/wife couple (no, this isn't The Onion, this is a real company), the goal is to save couples time, money, and the acrimony that often comes with a drawn-out court battle. 

"The average cost of a divorce in this country is $27,000. The average cost of Wevorce is $10,000," according to [Michelle] Crosby[, Founder and CEO]."

WeVorce is already helping couples who are seeking to separate. If Crosby's math is correct and a couple really does get divorced every thirteen seconds in this country, the company will surely see a steady stream of clients in the future.

Tie the Knot? Cut the Knot? Why Not?

I know I'm poking fun, but let me play Devil's Advocate here for just a minute. Let's say you really do want to get married online. If you have witnesses on either end and live where a wedding of that nature can happen, why not? Let's say you want to get divorced but you don't have a ton of money and you don't want to make it a huge production that upsets your family more than needed. Well, why not?

Why not just make it happen online?

It's the drum I've been beating for fourteen years now. If you can make things more efficient and less painful through digital means,  why wouldn't you? Sure, a big, fancy wedding is more fun than an online wedding. But if it's not practical or you don't really want it, why not go online? If you just want to break up and go on with your lives, why not use an online divorce service? If you want to do your banking simply or examine your finances or save your important files, why not use eServices to get it all done?

It's only when we accept that we don't have to have physical contact for these things that we start to overcome our sentimental attachment to the excess associated with them. We get more done and move on with our lives. And that, my friends, is...

LOVE, e-MERICAN STYLE!

January 28, 2014

The State of Credit Unions in 2014, As Predicted by The "Crystal Ball" of Google

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by Ron Daly

Let's face it - Googling stuff is fun. It has been from the very beginning and it's still a hoot.

Sometimes, Google can show you the future. I decided to put Google's "crystal ball" capabilities to the test and see what 2014 had in store for the industry. I simply put

  • "In 2014, credit unions will *"
  • "In 2014, credit unions must *"
  • "In 2014, credit unions should *"

into the search bar and hit return. And voila! all the interesting tidbits about what the industry should focus on this year. Some highlights: 

"[Credit Unions] must focus on enhancing members’ cross-channel experiences, says Belinda Caillouet, chair of the CUNA Technology Council..."

"Charting Your Course Through 2014", creditunionsmagazine.com

Agreed. Members are leaning hard on technology and demanding more channels that work well with one another. That includes mobile apps, online banking and ATM/branch services that all play well together and stay up-to-date and easy-to-use.

"Financial marketers will be accountable for analyzing the real results of content marketing strategies in 2014. Because every channel ultimately affects all of the others, attribution modeling allows marketers to credit a specific ad or touch point along a sales funnel rather than just the last material viewed or clicked."

"Digital Marketing Trends for Banks and Credit Unions in 2014", TheFinancialBrand.com

Yep, right on the money. The technology we're using to sell to members is getting better and we can start making sense of data and offering products and services that make the most sense for each individual member.

“In the next 12 months, mobile will overtake online in terms of number of users. It already has more transactions."

"5 Mobile Trends to Watch in 2014", cutimes.com

I'll be interested to see the outcome of this one. Mobile's a big part of people's lives, but can credit unions rise to that challenge and create great mobile app experiences in the space of a year? A year, mind you, that's already down to eleven months as of Saturday of this week?

"In 2014, the trusted role of banks and credit unions as the collector of funds, provider of loans, processor of payments and advisor of financial relationships will continue to come under fire from non-traditional players including new financial organizations (neobanks), hardware providers, third party payment processors, and mobile app developers that merchants and consumers are using to chip away at the traditional financial services model."

"Top Ten Banking Trends for 2014", bai.org

More sharks in a still-pretty-small tank? This is the moment CUs have been waiting for — the moment to set themselves apart from the upstarts and prove they can be valued, trusted financial partners by offering sensible services and can't-be-beat member interactions.

"To experience loan growth in 2014, credit unions will need to originate significantly more consumer loans to offset the expected declines in mortgage originations."

"Marketing Overview and Data Report", catalyststrategic.org

I'm really curious about what kinds of loans credit unions will be promoting in place of mortgages (assuming they cut back on mortgage promotions, which some won't). Credit cards? Student loans? Where's the "heat" in lending in 2014?

“Looking ahead to 2014, credit unions can expect to see the CFPB expand its fair lending focus,” said Bundy. “The CFPB’s regulatory agenda unmistakably signals that fair lending will be a focal point of new rule making starting in 2014.”

"CUNA Mutual Group Anticipates Broader Regulatory Focus in 2014", cunamutual.com

"...The CFPB has the luxury in 2014 to move on to topics other than mortgages, such as overdraft, prepaid cards, Reg CC disclosures, and debt collection. To keep track of all of it, take advantage of various resources out there—besides NAFCU, and the CFPB, many law firms have compliance blogs and news alerts you can subscribe to for free. Knowledge is power, so grab on!"

"Credit union industry experts: What’s in store for 2014", cuinsight.com

I bundled those together for a reason: the CFPB will be stepping up its game in 2014. Credit unions will need to arm themselves with information, as mentioned in the second story. There are plenty of great resources out there, both free and paid.

Any other big predictions for this year? Leave them in the comments section.

November 22, 2013

Have We Finally Had Enough of "Black Friday"?

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by Ron Daly

Thanksgiving? What's Thanksgiving? I scarcely remember.

The days of slaving over a hot stove to produce the perfect turkey and watching endless hours of football and falling asleep on the couch are gone. Now, it's all about sales.

Black Friday, that long-loved gem of the retail industry, is only a week away. Or is it actually less than a week away? Many stores are choosing to start their "Black Friday" on Thursday evening, so the deals are actually only six days out from now.

Why the bump-up? Because stores want to jump-start the frenzy that is the holiday shopping season, their busiest and most lucrative season of the year. Just like your local soft-rock station wants to start playing Christmas music earlier and earlier each year, stores are trying to get people frothing at the mouth over retail deals. I'd wager it won't be long before we have a "Black November" — an entire month of shopping and scrambling around stores as Halloween costumes get chucked out of major retail chains around October 15 and all the December Holiday decorations go up instead. What a nightmare. 

Maybe I'm not alone in my frustration with the ever-earlier holiday season. Nielsen reports that only 13% of shoppers are going to physical stores on Black Friday this year. There are conflicting reports from other sources, but this Time article corrects the confusion with a simple look at the numbers: while some 30-40% of all shoppers plan to shop on Black Friday (Black Thursday-into-Friday?), very few plan on doing it at a physical location. Most will be shopping online, from the warmth and comfort of home. 

They'll never even have to put down their turkey leg.

Plenty of Hustle, Not So Much Bustle

We've come to the age of "online-first" shopping. People are still snapping up those great deals and printing their coupons and getting the most for their money...they're just doing it from their living room. Why go get mobbed by a bunch of crazy people that are fighting over a toaster oven? Just order it and have it delivered. Amazon Prime pays for itself surprisingly quickly.

Retailers have the wrong idea, spreading the start-point of Black Friday over into Thursday. They should be making those hours smaller and tighter for physical shoppers and have in-store pickup for online shoppers. Now that would be handy - have a table where everything you ordered a few weeks before waits for you – already gift-wrapped, tagged, and ready to go. Then, if you're on your way out and you have an inkling, pick up some last-minute impulse items. That cuts down on labor-hours, upkeep, clean-up, parking frustrations and rowdy crowds.

Look at what stores like GameStop are doing with video game systems - pre-orders preferred and even rewarded with extras, yet the gaming nerds are still allowed to line up on the street. The online shoppers AND the physical shoppers get their just reward, without a lot of eye-gouging and body-blows. Better still, the store knows how many units to order in advance of the release of the product. Maybe that idea scales up easily, maybe it doesn't...but does ruining a bunch of people's Thanksgiving dinner really build excitement anymore?

People are more reliant than ever on the online channel to get things done. That goes for retailers and for credit unions. We can't just wish it was different and that people will like going to physical locations again. We have to meet demand where we find it.

And let me tell you, the only Friday event I care about after Thanksgiving is "Leftovers Day". Turkey sandwiches with stuffing and mashed potatoes, here I come.

October 29, 2013

Today's Not An Anniversary You Really Want to Celebrate.

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by Ron Daly

Torrential rain. Winds up to 115 mph. An estimated $68 billion in damages. Portions of the eastern seaboard still reeling.

It's hard to believe a year has already come and gone since Hurricane Sandy made landfall in New Jersey. It's not an anniversary you really want to celebrate but it's an important one to mark. It's a prime example of how credit unions are supposed to be rooted in their communities and how, as a community unto itself, credit unions reach out and help one another.

CUs help members

In the aftermath of the storm, stories came pouring in from New Jersey- and New York-area credit unions re-opening and powering through to help members. Some offered overdraft forgiveness, some offered low-rate loans for repairs; a brave and thoughtful few opened up their branches to those displaced by the storm, giving them a warm place to rest, recharge their portable electronics and get their finances in order for the displacement and for the recovery.

If there's a better example of "the credit union difference" than these community-based institutions offering the kindness and care that members need in a time of crisis, what might it be? Because this is the clearest indication to me of what makes credit unions special — a degree of true empathy. It's an empathy that applies to more than money; it applies to the human condition.

CUs help one another

In the wake of the destruction came the cleanup effort. Some issues were tackled quickly and with the kind of focus and calm needed to keep operations on the rails. Some issues have taken quite a long time to address, and some still go unresolved.

One good example of CUs lending themselves a hand? CUaid.coop, which sprang into action collecting donations from credit unions across the nation. The money got passed along to those credit unions that needed it the most. We started the rebuilding process almost immediately after the destruction took place. How many other industries get money going from company to company that quickly? How many other industries bother?

CUs could always do more

The Edelman Trust Barometer tells us that financial services is the least trusted industry worldwide. What can we do to counteract the skepticism and reticence in members and turn the "trust equation" back in our favor?

Stories like the ones above are a good starting place. Showing members that credit unions really do care about their safety and security goes a long way in building our credibility. But how do you really drive that home?

  1. Be Visible - Before, During, and After — If your service area is under threat, you need to be in communication with members throughout the process. When will branches close? Where should they go with concerns or questions? What should they do if they return home to extensive damage or, worse yet, outright destruction? While you're at it, reach out to disaster planning departments in your city or town and ask how you can contribute, volunteer and improve the conditions of those who get displaced or sheltered.

  2. Make Sure Issues are Well Documented — Did an ATM get destroyed in a tornado or flooded or burned up in a fire? Let members know. Did a branch need extensive repairs? Let members know. Do members that frequent one particular branch or area of service need aid and could that aid be provided by members in other locations? Let members know. Don't skirt the issue, don't "dummy up" - play straight, deal fair, do good.

    Recently,  the University of Michigan Health System encouraged doctors to admit to mistakes and bad calls. Surprisingly, the number malpractice suits went down. Why? Because people prefer a company, or a provider, that doesn't try to cover things up or fudge the facts. They want answers and clear communication. Give it to them.

  3.  Give Members the Tools They Need — Do your members know everything they need to know about direct deposit? If they don't, they might find themselves wanting when payday comes on the heels of a hurricane. Municipal CU learned that the hard way during Sandy and shared their insights. During a weather event, people might be lacking the resources they take for granted - mail stops being a priority, phone lines go down, the home computer might be done for due to electrical surges or fire or flood damage.

    But the chances are good that the members leaving their homes aren't leaving without a mobile device in-hand.

    Give members the tools they need most with your mobile offering. Check balances? That's a gimme. Transfer funds? Simple enough. Find branches and ATMs? Those tools are getting better all the time. Get copies of insurance policies, deeds, medical histories and wills? It's possible right this minute. If you're not offering these essential services, where is your operations budget going, exactly?

We hope that credit unions never have to deal with another "Hurricane Sandy". Unfortunately, we know they will. Here's hoping that they'll keep giving aid and comfort to the members that need it most. Here's hoping they'll keep looking out for each other and lending a hand in the spirit of cooperation and community building. Here's hoping that, when the crucial moment hits and it's time to be there for your members, you'll have given them all the information, attention, tools and time they need to get back on their feet. Here's hoping we can build more trust among our members and use that trust to turn them into lifelong members.

Here's hoping.

September 12, 2013

Introvert Media - What "Private" Social Networks Tell Us About the Future of Online Sharing

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by Ron Daly

It used to be that social media was all anyone talked about in business. "How do you use it? How can you grow an audience? Who should we hire to make it happen?"

With social media came a slew of new issues: people sharing photographs of their credit cards on Twitter (that account still exists, but the heck if I'M going to link to it); people sharing account information of every kind with newly-formed social phishing accounts; employees "over-sharing" or, in some cases, taking pictures of members' feet. And then, there's the marketing component. If there's a new medium out there, there must be some way to work in ads and direct sales/customer support, right? 

I don't know if that's true with the offspring of social media - introvert media.

Now, I know - there are nuances to what makes an introvert and an extrovert. I've been around a Myers-Briggs test before - I got a B+ (that's a joke, for any uptight psychologists reading this). But if social media is a more ideal environment for extroverts (lots of sharing, big crowds a must, plenty of feedback) then this new wave of private, shut-off social networks has got to be a big blessing for introverts (small crowds, not a lot of hubbub, not "open").

Take Snapchat, for instance. If you've never come across Snapchat before, ask your local teenager about it - they're likely to have it on their smartphone and use it to send pictures of God-knows-what to their friends. The idea behind Snapchat is pretty simple - take a picture, share with a friend, and a few seconds after they open it, the picture is deleted from their phone and from yours. Snapchat's programmers swear they can't see the pictures and that any attempt to screen-grab shared pictures alerts the photographer that the recipient tried to save the image. The entire point of Snapchat, according to their website, is to "share a moment". Users take pictures, send them to other users, and the pictures vanish. All that remains - at least according to Snapchat's privacy policy - is the memory.

Celly, a service that sends out mass text messages to registered users and is entirely closed off to advertisers and outsiders, is a favorite of plenty of people who are looking to stay in touch...from school systems to small businesses to protest groups. Similar functionality, but built for very small groups with phone access. The app now processes 550 million texts every month to members in 20,000 different groups. It's got nothing on Twitter's size...but it's not supposed to.

Want a better way to talk to your neighbors without having to...you know, actually talk to them? Nextdoor is Facebook for your block association. Users have to register their home addresses and verify they actually live in the community. It's a social network that's only a few "yards" wide.

I went poking around, trying to find an introvert network for people who want to better manage their finances. But let's face it, if you're managing your household's finances, you only want a few people involved in the discussion. Where does it start? What does a network that facilitates private, productive discussions about money look like? Who gets an invite? 

We've wrestled with this a lot in the creation and further development of My Virtual StrongBox. Forget about storage services that sit on your desktop and gobble up your many files and documents for sharing. My Virtual StrongBox is just for you and keeps your information safe and sound behind your online banking. Sure, you can share things with people (with a link that expires after a certain time/number of clicks), and they can send documents to your box if you need them to. But it's not meant to be a catchall - it's meant to be a private place. With all the movement toward introvert media, we see a growing need (as does Barclays, by the way) to present options that keep communications - and communicators - private.

In a world that's getting used to sharing everything, the real show-stoppers will be those that can keep a secret.

Are you getting into "Introvert Media"? Tell us about it in the comments.

March 20, 2013

eManners: What Does "Polite" Look Like Nowadays?

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by Ron Daly 

It's always interesting to read an article that challenges convention, then see the blow-back from that article, then see the author's response to the blow-back. With so much media to manage these days, conversations and commentary come out of the woodwork. If they don't reply on your blog, they'll reply on their blog. Or on Twitter. Or on Facebook. Or by phone. Or right up in your face. 

Take, for instance, this opinion piece by Nick Bilton in the New York Times. It's a piece that rails against the "Thank You!" email, the voice mail where a text message should go, the use of friends to answer a question that's made for Google. 

Really, who sends an e-mail or text message that just says “Thank you”? Who leaves a voice mail message when you don’t answer, rather than texting you? Who asks for a fact easily found on Google?

Don’t these people realize that they’re wasting your time?

As you might expect, the lament of a 36-year-old super-geek didn't sit well with readers, many of whom are from a generation removed - one that emphasized penmanship, greeting cards and always saying "please" and "thank you". 

Do I really care about "Thank You" emails? No, not really. They're nice to get, and if they have more information or want to continue a conversation, why not? But I'm not going to lose sleep, nor should anyone looking for a reply from me be upset if I just move forward with the next steps after I get an email with an "action item". 

Bilton again, with a worthwhile consideration: 

How to handle these differing standards? Easy: think of your audience. Some people, especially older ones, appreciate a thank-you message. Others, like me, want no reply. “It is important to think about who the relationship is with,” Mr. [Daniel Post] Senning said.

Audience, audience, audience. The number one consideration in marketing, business, sales, collections, consultations, etc. You have to remember to whom you're talking. 

Based on the reactions he got, you might think Mr. Bilton hasn't considered his audience's reaction. Spoiler alert: they got mad. They called Bilton a "sociopath" (no, really), irrational, impatient, sad...they really didn't like the idea that he didn't want to talk to his mother directly, but rather via Twitter. Bilton later explained that his mother lives in England and, as a San Francisco resident, he couldn't call her at any hour that was convenient for both of them, so they rely on Twitter to fill in the gaps. He talks about how he does, in fact, hand-write thank you notes to friends and relations. But too late - the audience had made up their minds.

Bilton says he doesn't mind being "the punching bag" for people his age. He did lament, however, the extremes people go to when they react to something they don't like. They talk about how disgustingly disconnected from reality he must be to dislike a "thank you" message. Bilton replies that the stewards of Emily Post's legacy of good manners insist that, yes, you should consider the audience when crafting a reply. Some people will love a "thanks!", some won't. Some people will want a voice mail, some will just delete it. 

And then Bilton made a really terrific point about who trains whom in our culture. It used to be that older people taught younger people everything. As technology advances and people develop skills at different ages, it's clear that education moves in two directions: up and down the years, each generation having something to offer the other. 

I had to learn to text if I wanted to get an answer to a simple question out of my kids. My younger employees come to me if they want my input about business or finance. We have many ways of communicating and we all have things we need to get done, so we all have to adjust our methods from time to time to make it work. 

Now...let's talk about "what you've always done" and member communication. 

The truth is, things change. People want to converse and conduct business in different ways, and the methods they use are changing all the time. But in embracing changes, consider the audience's reaction to your messages. Maybe one group really loves hearing from you every month. Maybe one group wants a phone call every once in a while. Maybe there are outliers - people who have adopted new ways of handling all of their inputs and have rolled with the changes. 

Pay attention. Knowing how to talk to people is critical to a credit union marketer/manager's livelihood. Knowing when to say something and what to say is so important, and just as important, knowing when to quit talking and let people get back to their lives. 

My Pet Peeve: When you use an online chat or a toll-free line for customer support and people keep pushing the script on you when you've made it very clear that you're done. 

Me: "Well, thank you, that's all."

Them: "Okay, Mr. Daly, is there anything else I can help you with today?"

Me (in my brain): "Are you not listening? Or are you just forced to do this, like a robot?"

Me: "No, that's it."

Them: "Okay, thank you for calling our help line. You can reach us online any time at www..."

Me (in my brain again): "Come ON, just say goodbye and hang up the phone."

I like dealing with people, not people ordered to act like a computer. Here's my dream customer service call.

Me: "Well, thank you, that's all I needed."

Them: "Okay, Mr. Daly. Have a good afternoon."

Me: "Okay, bye!"

I've had maybe three of these calls in my life. And I make a lot of calls. 

All it takes is a little listening. People unsubscribe from your newsletter? Fine, but make a note of that. Don't chalk it up as "this person's not interested"...find a way into their lives that works for them and you. It exists, I'm sure. 

And when they talk, listen. And when they reply, read it thoroughly. And when they care, you should care, too. 

Don't let technology fool you into thinking that etiquette and thoughtfulness don't mean anything, to any given age group. Treat members with respect and you'll earn theirs. 

And for what it's worth? You should call your mom on the phone. Unless she's totally into Facebook now. 

March 14, 2013

Google's Killing Its RSS Reader. How Will Your Readership Survive?

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Arrested-development

There are times when the leader of a business knows he or she has to kill off a product. In some cases, this is celebrated. In others, it's met with many loud groans and much sadness.

Google Reader is a perfect example of the latter. Widely used, widely adored, free to all - but on July 1, it gets the proverbial knock on the head from Google. This simple, lovable web service is going to that big farm upstate to chase rabbits. Yeah, that's it. Rabbits.

Hopefully, this won't affect the "CU Blogosphere" too much. Heaven knows there are plenty of places to get your fill, including CU Insight, the CU Watercooler, various Twitter feeds, Facebook feeds...the list goes on, but you get the point. Just because Google Reader dies, that doesn't mean the stories stop coming.

But for those RSS-heavies, it's going to be a rough few months. Where will they go for their stories, their thought pieces, their news?

Humbly, I submit a few suggestions.

  1. Outlook Users, Rejoice! - I'm forever in Outlook (Neil Diamond, where are you? I've got a song for you and you don't even need a new melody!), so the Reader news doesn't bother me that much - I had one of my Nerds-in-Residence set up my RSS feeds in my Outlook. It's a simple, painless process and it means you can use Outlook for more that just email churn and booking meetings. Here's the Outlook team on how to set it up for yourself.
  2. Mac Users, Hit the App Store - The Mac App store has a few dozen RSS-app options, a few of them free, the rest only a small amount. One thing I did notice - many apps are "Google Reader Apps", meaning they integrated with Google Reader. Wonder if their developers will try and adapt or simply close up shop.

    One highly recommended app, Fever, is $30 (yikes!) and its developer has stated, publicly, he really doesn't have the time to work on it. Plus, you self-host the service. A big turn-off for the non-technical.

    So what are our lonely Mac Lovers going to do? I turned to my go-to on things like this, Jimmy Marks, and - after several minutes of teasing him (he's a big-time Google Reader Believer) - asked what he planned on doing.

    "Feedly's probably the way to go. It's not as cut-and-dry as Reader is, but it focuses on the newest content and lets you navigate around on your terms. I don't use Mac's Mail app, or I'd do what you did and add the RSS feeds there. Now stop throwing paperclips at me, I'm in a bad enough mood as it is!"

    (Editor's Note -- I wasn't throwing paperclips at him. That you know of.) 

  3. See If Your Favorite Blogs Have Social Feeds/"Updates by Mail" Options - Many blogs have their RSS items go directly to their Twitter or Facebook feed. Others still use direct-to-inbox delivery to get the message out when it's time. The CU Soapbox's posts go to a mail audience in the hundreds, many of whom prefer to read their feed from the comfort of their email inbox. Giving people different points of entry doesn't do anything to the results - if they're reading and engaged, you're doing your job.
  4. Google's Cleaning Up, Why Don't You? - If you're anything like me, you've gathered quite a few blogs over the years. Many of them stop posting and you just sort of forget about them. Go ahead and delete those feeds. This frees you from the struggle of bothering with too many blogs and sets you up to find something new and exciting out there in the blogging world.

There are plenty of people who want to petition Google to save Reader. They're probably the same kind of folks who are waiting on that Arrested Development movie. Want my take? Let's give Reader a good send-off and then move on to bigger and better. There are always better apps out there, and if there aren't, it's our duty as lovers of technology to create them. Necessity is the mother of invention.

As far as how this applies to credit unions' blogs...you went to all that trouble to create a blog or a news feed or an events feed. Will people still follow it when Reader bites the dust? Better be sure they do. Find new ways to get the same content to the same people without the crutch of Google Reader and you're good to go.

February 15, 2013

Conventional Wisdom Vs. Real, Actual Wisdom

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by Ron Daly

There's what people know, and then there's what people "know". 

And whaddayaknow? Typically, they're complete opposites. 

 You see, there's "conventional wisdom" - what people think they know based on their personal experience - and then there's "real, actual wisdom". "Real, actual wisdom" typically shows up in the form of unbiased research with clear results. Is it more "trusted"? No, not likely, because nobody wants to feel like they're wrong. But it is a reflection of the truth. 

What got me going on all this is a recent Nielsen Group study on teens and technology. Now, "conventional wisdom" tells us that teens are wired and great with technology. What does the "real, actual wisdom" tell us? 

Teens are not technowizards who surf the web with abandon. And they don’t like sites laden with glitzy, blinking graphics. Teens are often stereotyped as only wanting things that are bold and different. They’re also often viewed as being fearless about technology and constantly connected to some form of media. Although this might be partially true, it’s an oversimplification and letting this steer your design can lead to disastrous outcomes.

The study Nielsen conducted focused on the ability of teenagers to gather information and see a process through online. What did the study find? That teens had poor patience and attention spans, poor reading skills, and bad research methods. They weren't as good at finding the info and making the right decisions based on what they found. 

The study goes on to talk about what works with teens and what fails. What works?

  • Smart, concise writing
  • Large, readable fonts and big images (to compensate for small screens)
  • Self-selecting social and email (yes, email) options. 

Wait, that sounds like a list of things older users would like!

Not to sound like a teen, but...DUH. 

Who doesn't like reading things that are easy to understand? Who doesn't like a website that's built large enough to read and use? Who doesn't like to have the option to not socialize every single online interaction? 

A little research goes a long way. For a while, when I would describe our newest product, My Virtual StrongBox, the people I talked to would tell me that their older users wouldn't like it. After pulling demographic information for  My Virtual StrongBox's users, we discovered that use was highest among ages 30-39, and second highest – yep, you guessed it – among users in their 40s and 50s. "Conventional wisdom" made it seem like a product built for Gen-Y. "Real, actual wisdom" proved the real market had a touch of gray. 

Long story short? Take the time to ask, to record, to report, to study – to really, truly know.

Then, act.

January 29, 2013

A Penny Saved is…Still Not Enough to Save the Post Office

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by Ron Daly 

Well, my plan to invest my retirement in forever stamps is paying off nicely.

Yesterday, the United States Postal Service increased the price of a stamp to $0.46. The rest of the postage prices jumped, too, but it's good news if you've got a bunch of forever stamps sitting around - they're gaining value all the time. 

The USPS has the right idea - postage prices should increase, considering the fact that letter volume's dropping the way it is (heading to about 150 billion pieces of mail - seems like a lot, but that's actually waaaay down). And, lest we forget, the post office is bleeding about $25 million every day according to the postmaster general. Some estimate they'll be out of money and out of service in the next six months to a year. Will a penny more per mailed letter really save them? No, but it's better than standing still. 

Wait a minute, Mr. Postman...

In 2006, the USPS turned a $900 million dollar profit - yeah, you read that correctly. A profit. Hard to believe about an organization that in 2012 lost $16 billion. Where's all that money going? Is the sharp drop-off in mail volume to blame? Is it all the Postal Service's fault?

No, it isn't. As with just about everything these days, you can blame Congress. 

See, 2006 was the year Congress passed a law requiring the USPS to fund pensions through the next 75 years. I can tell you, this is unheard of in business - nobody's shoring up that much cash to pay employee pensions. Nobody. It's suspected that $11 billion of that $16 billion lost in 2012 went to pension funds and labor. Add to that the fact that mail volume's dropping off and Congress has been inflexible on the idea of killing off Saturday delivery (a measure that could save the USPS about $2 billion annually), the USPS has been fighting with one hand tied behind its back.

So, what's the solution?

There are plenty of people nationwide who are eager to see the post office saved for future generations. This Esquire article goes in-depth about the problem's the USPS is facing and how a complete dissolution of the entire postal service would be a blow to the American way of life. There's a new petition on WhiteHouse.gov to "save the postal service". But how to save it?

One possible way out? Undo the curse of the pre-funded pensions and let the money in that fund be dispersed to the post offices and carriers that need it. But that would require Congress's action in undoing what's been done. 

Congress? Action? Hmm...what's our other option? 

Oh, right...a taxpayer funded bailout. Taxpayers would fund the pension program and alleviate the post office's responsibilities. 

Feel like bailing out one more industry that can't handle the future? 

And speaking of the future...how bad off would USPS retirees be without the pensions in question? 

Not that bad, says Jen Wieczner at SmartMoney

Despite the Postal Service's debt, its retiree benefit coffers are beyond full. Its pension funds are more than 100% funded, compared with 42% for all federal pension funds and 80% for the average Fortune 1000 pension plan. That "astonishingly high figure," according to Williams, amounts to a "war chest" of resources that will take care of older workers for decades to come. 

So either way, it comes down to Congress. Keep your eyes peeled, there'll be a brouhaha on the Hill about all this, likely before the summer rolls in.

And in the meantime, what should you be doing, oh weary credit union marketer? 

The Broken Window Problem

You might be thinking, "yes, let's save the post office - we'll send out more mail!" It turns into the old Broken Window Fallacy - someone breaks a window, the window gets replaced for a certain cost, everyone starts a window repair business, and then all of a sudden...no broken windows. So what do people do? Start breaking windows to save the window repair businesses. 

It's wasteful and stupid. And so is trying to inject more mail into a beleaguered system because you feel bad about its shortcomings. When Western Union announced it would stop delivering telegrams, where did all the protests occur? Where was the petition saying an outmoded form of communication must be saved? 

I like my postal carrier. I like getting a letter every so often. But I don't walk around with 400 pieces of mail in my pocket every day. I do walk around with a small, touch screen computer that manages all my email, sends me text messages and even places phone calls. 

Now, let's look at credit unions. In a time when many CUs are closing their doors or getting merged, who can afford to overlook the significant cost savings that come from online banking, online account opening, eStatements, electronic bill pay, debit cards...the list goes on, but I get the sense I'm not telling you anything new. 

We started  DigitalMailer 13 years ago because we knew that the two things credit unions really want (operationally speaking) are to A) generate revenue and B) cut costs. You can't do that when you're chained to the giant rock of printing and postage. We've delivered close to 60 million eStatements over the years. At $0.46 saved per eStatement, that's $27.6 million that would go out of the pocket of the Post Office (sorry we're not sorry) and back into the pockets of the credit unions we serve. We've created products like One-Click Enrollment to help make that transition easy, and most eStatement converts never look back. Promoting education and organization to members through online account and document management is part of the greater mission of credit unions.

Heed that call and stop worrying about whether or not the Postal Service can survive. It'll take a fight with Congress, but it can be done. And even when it is, don't be surprised if the USPS still cries foul at the drop in volume. They had the chance to latch on to emerging technologies and ignored it, favoring the old ways instead of a new path to profitability. They didn't take it. 

Time for you to consider that new path for yourself. We're famous for avoiding bailouts. 

As for me, I hope postage jumps to $1 - my all-forever-stamp portfolio is looking better and better.

January 23, 2013

People Are Lending Directly to One Another…So What Are We Doing Here?

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by Ron Daly 

Today on CreditUnions.com, I was drawn to an article titled "Beyond the Home Loan: What can credit unions learn from online crowdfunding platforms?" [Here's the Full Article.]

While the article doesn't spell out the overall lessons, there are a handful of examples. Good enough, I suppose, because it got me thinking - what are we missing? 

Credit unions, as best I understand them (and after 30+ years in the business, I can honeslty say I do), were created to give members a way to lend to and borrow from one another. They were created as an alternative to the system. Now, for consumers, it seems like we're just another part of that "system". 

Bank customers and credit union members know that good loans go to good paper. If you're trying to buy a home or a car and you have a good credit score, you won't need to look for too long to get what you need. But if what you're trying to do is create a movie about Linotype machines or start a small business selling weirdly-shaped candles, you'll likely go wanting. And for the people who have rough credit, quick, high-interest loans with fewer strings mean more than "relationships" with a bank or credit union. 

As far as peer-to-peer finance and technology goes, you're crazy if you don't go read "A Game of Leapfrog" by Brent Dixon. 

From the article, originally published on the CU Watercooler

But meanwhile, many credit unions still don't even offer online account opening. We're saddled by regulations. We're a weighty, slow-moving beast. We make excuses.

Consumer finance is not just begging for disruption, it's experiencing it. In a few short years, many traditional institutions will be passed over. Leapfrogged. It's easier to build than reform, and people are building.

So, what can credit unions learn from peer-to-peer finance today?

  1. Time to Re-evaluate the "People Helping People" Message -

    Everyone I talk to in the industry loves that phrase, but how many credit unions are interested in the proof of it? When a person lends to Kickstarter, they get a "thank you" in the form of a gift - maybe a version of the product the borrower is developing or a branded package of swag with the up-and-coming product or company logo. What's the "thank you" gift new members get at your credit union? A letter? A free pen? 

    Better yet, where are the booklets and brochures with member success stories? Show me the story of a member who joined and went from broke to flush thanks to the credit union. Show me the small businesses that have benefited from the CU's guidance. Those stories have got to be there. Otherwise, my fees and interest are going toward nothing, as far as I can tell.

  2.  Partner Big, Lend Small

    According to the CreditUnions.com article above, services such as Kiva and Fundly use proven tech platforms like Paypal and Amazon to process payments and securely move money to and from borrowers and lenders.  Why can't credit unions partner with tech providers for everything they need - better online banking and account opening, smart phone apps, tracking of the loan process, etc.?

    It's not that they can't, it's typically that they won't...or don't want to. Even when vendors provide all the due-dilligence and proven testimonials and case studies, credit unions will still look for ways to doubt results. Who does that help? Not the member, certainly, and not the loan portfolio.

    And look at the amounts certain people are requesting - $300? $500? They'll go to a payday lender before they walk through your front door, how is that a good thing? It's not because the money isn't expensive - the rates on these small, short-term loans are outrageous. But people see fewer barriers to entry. They don't know they're walking into a trap. Shouldn't being more accessible be a goal for every credit union?

  3.  Never Turn Away From Your Social Missions

    People value charity, philanthropy, benevolence - not because they're "trendy", but because they're the right thing to do. We know hundreds of credit unions that partner with great causes but rarely explain the depth and their level of involvement. Why shy away from talking about things like Credit Unions for Kids? Share the good news with more than just a parting shot in your newsletter - make it a cause that you champion, not just "support".

  4.  Play the Game, But Play to Win -

    Sure, LendingClub and Prosper.com are growing enterprises. But are they human enterprises?  Can they really lend and handle deposits the way you can? Are those prepay debit cards celebrities seem to love so much really a better alternative? The answer to all three of those questions is "no". 

    You can provide deposit insurance. You can provide security. You can provide convenience. You can do it all and, if you do it well, you can show everyone that you're not "just another bank" - you were facilitating "peer-to-peer" before it was cool. And you're still here now.

It's not just lending that's being overtaken by "the people" - it's debt forgiveness, too. The Rolling Jubilee raised half a million dollars, bought up thousands and thousands of dollars of debt from banks, and forgave it. These "gifts of forgiveness" went out to average consumers, bogged down by medical or educational debt, and told them their debt was forgiven in its entirety. 

Your average consumer now knows that there are multiple ways to manage one's money - there's the bank, there's the credit union, or there's "none of the above". 

We USED to be the way people loaned money to one another...now, we're a hinderance. We get our "people helping people" status back by being adaptable, affordable, approachable, and dependable. 

Let's get to it.