Deluxe Small Business Collaborative

Producing Industry-Level Disruptive Experiences

Customer Segment Trauma

Deluxe Financial Services has taken a unique approach to business, partnering with its customers-financial institutions of the highest caliber who join a Knowledge Exchange Collaborative sponsored by Deluxe-to help them achieve their critical business objectives. Deluxe's philosophy is simple but powerful: if our customers succeed, then we succeed.

So what did financial institutions decide they needed to focus on in 2005? The consensus was they needed to look more carefully at the way they were working with the 26-million-strong population of small business owners. Attrition rates had skyrocketed in this segment and loyalty figures were surprisingly low at each of the collaborative members' financial institutions. These facts and figures were not surprising to the collaborative. Most banks and credit unions eyed small business accounts warily and tended to lead discussions with risk assessment in order to determine loan eligibility. In the eyes of the business customer, however, there was a lot more to the banking relationship than loans. They wanted a financial partner who believed in them the same way they were willing to believe in their own dreams. For the business customer who was being evaluated solely on the basis of loan worthiness:

DENIED LOANS = JUSTIFICATION FOR ABANDONMENT

The Mantel Method^SM

After trying other customer experience consultants, Deluxe turned to Stone Mantel to help the Collaborative team produce an innovative new approach for financial institutions to take with small business owners that would not only stop the bleeding, but would heal the patient.

We at Stone Mantel dig challenges like these. We put the Mantel Method to work to create and prove that our recommendations would result in a disruptive experience for small business banking of San Francisco Earthquake proportions.

Finding the experiences that matter

We quickly discovered two things: the Collaborative members admitted they knew little about small business owners and even less about meaningful brand experiences. But they were eager to learn about both. So we led them through a review of relevant, third-party research to educate and to identify the knowledge gaps. We developed and conducted ethnographic research which included activities and discussions designed to help small business owners talk about their dreams and their needs. Our activities ranged from day-in-the life observations to customer intercepts and games, from secret shopping to group discussion and ideation. We even shadowed bank employees to learn how they view and treat these small business customers. No processes or bank personnel were immune as we videotaped interviews with executives, branch employees and HR representatives.

Seven traits of small business owners surfaced. Each varied in importance, owner by owner. By understanding how each trait related to the needs of the small business owner, financial institutions could see how they could help.

• Revenue-What are the business revenue trends? Up? Down? Flat?
• Life stage-Of the business and the owner.
• Bank experience-The more they jump from bank to bank, the tougher the nut to crack.
• Staff size-How many? What are the growth plans?
• Assuredness-What level of confidence does the owner feel in his plan?
• Vision-Does the owner plan for future challenges and opportunities?
• Community involvement-Does the owner network?

Start simple and sweet

With all this new information, the Collaborative headed to Keystone, Colorado, the headquarters of Starizon, an experience design company, to ideate and conceptualize new possibilities. As part of the ideation process, Stone Mantel led the Collaborative through storyboarding a new experience concept-actually drawing the scenes of the customer experience. The results were good, but first drafts rarely hit the mark, and we know that. So we put the first concept through a series of group ideation sessions, online concept tests, and intensive reviews to make sure we understood the findings. After several iterations of evaluating the feedback and redesigning the storyboards, the concept blossomed into a program called The Blueprint of Belief.

A step worth taking: Stone Mantel took extra efforts to measure and track attitudes toward the concept and the financial institutions among all participants. Using the same set of questions, we took measurements both before and after participants saw the concepts. This is a critical step, because it provides the proof that the experience truly is disrupting the marketplace and provides the necessary cost justification for our clients' investment.

Creating time well spent

With the blessing of the concepts, the Collaborative was ready to implement the pilot program. 27 branches from different financial institutions across the United States were selected to participate. Stone Mantel and the Collaborative trained the branch employees responsible for the pilot and set timelines for implementation.

The Blueprint of Belief Pilot Program Description

Within each branch, the pilot program tasked independent business owner champions-called Relationship Architects (RA)-to select and contact business owners to participate in the pilot. Every customer has a story, so RAs visited business owners at their workplaces to gather those stories, take photos and learn of their dreams, desires and needs. They didn't interview business owners. They conversed with them.

RAs took the challenge to create the experience within their branches-space dedicated to the independent business owners-and held network meetings with the participants. The participants loved the meetings. From their interactions, RAs then assembled a Blueprint Crew for each participant comprised of hand-selected branch employees and other individuals with business expertise to advise the business owners on their specific needs. This group of advisors developed goals with the business owners that moved them toward achieving their dreams. The successes came rapidly, and RAs celebrated each by presenting a Blueprint of Belief document that accurately summarized the owner's dreams, desires and needs.

• A few elements proved critical to the success of the pilot program:
  Training-RA's were put through a vigorous two-day interactive training session to learn and brainstorm their roles, listening skills, storytelling, story-gathering techniques, and relationship-building skills. They weren't just told how to do these tasks; they were given the opportunity to role-play and perfect their skills before trying them out in the pilot.
• Piloting in multiple markets-We had to account for geographic, socio-economic, and corporate culture differences.
• Participant mix-Customers and non-customers alike were included in the pilot. We wanted to know if we could convert and retain customers with this disruptive new experience.
• Frequent measurements-In order to track attitudinal changes in the participants, identical surveys were administered at various points: before the concept presentation, after the concept presentation, before the pilot experience, and after the pilot experience. If we missed the mark along the way, we wanted to know the exact point.

Results

With results like these, it's no wonder the financial institutions deemed this a true success story!

Loyalty

Stone Mantel conducted loyalty surveys before and after the pilot program with all pilot participants, asking an identical set of questions in each survey. The chart below shows the results of those who would definitely do the listed action. In every instance, the results prove the pilot created a statistically significant percentage point change toward increased loyalty.

The following statistics represent all pilot participants after completing the pilot experience and also indicate strong loyalty:

• 97% of the small business owners said they were likely to recommend the host financial institution-a 6% increase as a result of the pilot program.
• 89% of the small business owners said they would likely use other products and services of the sponsoring financial institution-a 14% increase.
• 88% of the small business owners said they would likely remain a customer of the bank or credit union sponsoring the pilot-a 12% increase.
• Nearly 75% of the small business owners who participated in the pilot program considered it time well spent. This shows the pilot experience has value, particularly because the majority of small business owners in the pilot indicated they were time challenged.
• More than 8 in 10 found the pilot experience enjoyable-and a similar number of participants considered the host financial institution a trusted resource.

Additional Detail on Likelihood to Recommend

Customers may be loyal, but will they tell their friends? Prior to even seeing the new experience concept, only 32% of small business owners would definitely recommend their bank to colleagues and 7% said they would not recommend. After the pilot program, 75% said they would definitely recommend their bank and none said they would not recommend their bank.

Concept Success

Stone Mantel also assessed how well the brand experience concept met the needs of the business owners. The chart below indicates those who agree with the statements. Again, in each instance, the post-pilot surveys indicate a statistically significant positive shift toward the perception that the new brand experience will help their businesses.

Financial Results

Loyalty measurements are valuable indicators, but customers vote with their money. The financial results are equally impressive:

• Account values increased across all participating banks and credit unions.
  • At one sponsoring financial institution, deposits increased by $250K across 10 pilot participants.
• Previously declined loans were revisited and reversed.
  • At one financial institution, loans to 10 small business owners increased by $1.8 million as a result of the pilot.
• In numerous cases, loan officers informed Collaborative members that the pilot provided a rich source of information to help them make better loan decisions.
  • For example, one small business had been declined for a loan three times. During the pilot, that loan was issued because the loan officer finally felt confident granting the loan based on the comprehensive and meaningful information gathered about the business.
• Numerous prospects converted into customers. One-third of all participants were not customers prior to the pilot. The majority of these non-customers became customers.
  • One participant indicated the financial institution had given him "renewed energy for his business." He said, "You didn't focus on what you could sell to me; you focused on what you could do to help me."

Create cultural capital: Sustaining the experiences that set you apart

Stone Mantel is committed to the process until the end-until the cultural capital created by the pilot is implemented throughout the organization. So in order to sustain the momentum and excitement generated by the pilot program results, Deluxe now provides training materials and conducted interactive train-the-trainer seminars for use by any Collaborative members and others who seek similar results.