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2010 © Copyrights Protected
InnovationAhead of the Curve
Arkadi Kuhlmann
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What if the Idea Had a Name?
ING DIRECT was born in an age of broken promises. If we were going to earn people’s trust, we had to do it by turning our backs on
what marketing had become.
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What if We Started Over?
When you’re trying to re-invent something, nothing can be sacred.
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Banking or Retailing?
“Do not go where the path may lead; go instead where there is no path and leave a trail”- Ralph Waldo Emerson
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How Do We Innovate?
Leading Americans Back to Saving
What are we doing?
We Simplify Financial Products
How we do it?
Save Your Money TM
Our Brand Promise
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Value Based Differentiation
EmployeeEngagement
Cost EfficientOperational Excellence
CustomerAdvocacy
BrandExperience
CompetitiveAdvantage
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• Short Term Focus
• Rules Driven
• Supply Focused
• Follow Best Practice Industry Models
• “Hire for Skill”
• Hide Behind Bundled Offers
• Long Term Focus
• Behavior Driven
• Leapfrog Standards
• Demand Focused
• Retail Model
• “Hire for Attitude”
• TransparentStandalone Value
• Make Money
• Multiple Products
• Out-source Work
• Back-end Focused
• Serve Everyone
• Rigid & HierarchicalOrganization Structure
• M&A Focused
• Driven by Financial Targets
• Innovate Once
• Maintain Status Quo
• Opportunistic Growth inDisjointed Areas
• React to Technological Changes
• Strong Organic Growth
• Stable Profits
• Constant Innovation
• No Entitlement Culture
• Strategic Growth inNew & Selected Areas
• Exploit TechnologicalOpportunities
• United by a Cause
• Build a Franchise
• Few High Value Products for Select Customers
• In-house Work
• Front-end Focused
• Marketing & ITDrive Company
• Nimble & AdaptiveOrganization Structure
Sustained Innovation Stimulus Execution
Tra
ditio
nal
Dis
rup
tors
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What if Everyone Could Win?
That was the impossible question that gave birth to this idea called ING DIRECT.
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Building a Track Record – Consumers Love a Winner
► # 1 Direct Bank
► # 1 Savings Bank
► # 9 Bank (residential mortgages)
► #15 Bank (domestic deposits)
► #19 Bank (assets)
► 7.6M Customers
► 8 Cafes
SeattleSt. Cloud
Minnesota Café New York Café
President Obama Inauguration Event, Delaware Office
Source: FDIC Q3’09
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Innovate Products
Savings Interest Checking
Mortgages Investment
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Innovate Every Moment of Truth
• 3,989EO ATM transactions
• 36,474Purchases using EO
• 9,179Billpay transactions
• 11,912ShareBuilder trades
• 104,279Web transactions
• 60,000ACH pushes
• 149,000ACH pulls
• 690Emails received from customers
• 2,405Sharebuilder Mobile Views
• 10,134Customer calls
• 6,500Customer calls answered in 20 seconds
• 16,363Clicks on our web banners
• 304,228Customer web logins
• $4,523,193Interest paid
• $43,000,000 Gross mortgages funded
• $47,253,000Net deposits inflow
• 955New Sharebuilder Accounts
• 7,120Web Impressions on WeTheSavers.com
• 2,933Cups of coffee served
• 4,443Café customers
• 3,181New OSA accounts
• 1,256New customers
• 93,000Sharebuilder log ins
• 3,000,000People watching our TV ads
• 360,791Cross-Sell Emails
• 454,548Acquisition Emails
• 1,716Website Password Recovery
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Branding
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Engaging Messages
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Continuous Innovation Rewarded
DisruptorsSoul SearchersOnce Golden Boys
AppleSouthwest Palm
Source: Yahoo Finance
Apple 3M Google
Southwest Microsoft Starbucks Borders
Palm Kodak Xerox Yahoo AOL Chrysler Ford
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Marketing
Experience marketing in Manhattan with live promoters
Orange Brand Driver campaign
Savings promotion on Black Friday
Marketing campaign on Hulu.com
TM
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Keep Your Customers Connected
Websites our Customers Visit
Facebook, 61%
LinkedIn, 31%
MySpace, 11%
Twitter, 9%
Others, 3%
None, 30%
You Tube
Hulu
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Customers’ Vote of Confidence
Wins Returning BusinessDelivering on Brand Promise
Thinks ING DIRECT is overall better than others
Planning to increase balancewith ING DIRECT
Thinks ING DIRECT website better than others
Ease of becoming customer of ING DIRECT
91%Satisfaction with
ING DIRECT
82%
75%
9 out of 10
9 out of 10
80%
100%
120%
140%
160%
180%
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8
Length of Customer Relationship
Dep
osit
Bal
ance
Gro
wth
(%
of Y
ear
1 O
peni
ng B
alan
ce)
7.6% Average Balance CAGR
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What if We Gave Something Back?
This has never been just a business. It’s a cause.
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ING DIRECT is Customers and Their Communities…
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We, the Savers
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New Normal
► Price conscious consumers
► Growing federal deficit & public debt
So who will win ?
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
Dec-85 Dec-88 Dec-91 Dec-94 Dec-97 Dec-00 Dec-03 Dec-06 Dec-09
3mth Treasury Unemployment
► Higher natural unemployment
► Threats of inflation/ stagflation
0%
2%
4%
6%
8%
10%
1990 1995 2000 2005 2010
Savings Rate
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Think Greenfield
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Re-engineer
The Product
Innovate
The Process
The Customer
Supply-driven InnovationFinancial services’ need for profit
Demand-driven InnovationConsumers’ need for value
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What if We Aren’t Finished?
There is always going to be a better way to do this.
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Road to HappinessLessons from Innovation
►Build Innovation-centered Culture: Hire for Attitude and Reward Failure
►Create Cycles of Creative Destruction: You will Never be Finished!
►An Inventor’s Kryptonite: Financial Planning and Marginal Optimization
►Be Demand-side Driven: Avoid Supply-driven Thinking
►Facing the Brutal Truth: An Organization’s Capabilities Define its Deficiencies
►Markets that Don’t Exist Cannot be Analyzed
►Outside Forces Control Allocation of Your Internal Resources: Align Them!