PALM DESERT, Calif.-It’s a “moment in time to think differently.” And credit unions would very much benefit from doing so, according to one person.
Speaking to the California and Nevada leagues’ REACH Conference, Mitch Joel, the founder of Six Pixels Group and an author and speaker known for his insights into brands, digital solutions and innovation, told credit unions everyone keeps talking about “the big bad wolf of disruption” brought about by the COVID pandemic, when in reality that disruption was already underway long before 2020.
What COVID has done, he said, is compress all of that disruption and create a changed marketplace available for the taking by those organizations that understand what is really occurring.
“I was looking for inspiration, and where does one go for inspiration these days? You go to places like Instagram and you scroll through little flowery things with great quotes, and sure enough I found an amazing quote that I thought completely encapsulated what I was trying to say about disruption, but it wasn't from a business leader, it was actually from a fiction author,” said Joel referring to the quote from Cynthia Ocelli that appears below.
What to Be Thinking About
“What I want you to do is spend your days here thinking about the journey you've been on, all the challenges you have, and what I really hope is you do not confuse destruction and disruption,” said Joel. “They're not the same thing. I think if we really learned anything during this pandemic it is that we are resilient and that we can think about innovation and technology in a much healthier way. It's been a challenge for many things, but it’s also been a great moment in time. So, if you don't confuse disruption for destruction, you’re going to have a much better experience.”
While economists and others expressed worries in the early days of COVID that it would lead to another Great Depression, what has really occurred is what Joel called the “Great Compression.”
“Things were already changing. What I think happened in this moment in time was a little different. We had an amplification and a distribution. We had an amplification where some companies and credit unions realized this was moment in time for digital transformation and it made things louder. And we had distribution, where all this change was distributed more widely.
“The reality of how you can readjust is you can look at what’s happening in your organization--is this big change really troubling? I want you to switch that whole view and think about it from the consumer perspective or from your employees’ perspective. They adapted quickly. They didn’t struggle. They figured things out quickly. If you think about it from the corporate level, this was an amazing time to think about new technologies deploying.”
No Hands Raised
The first idea Joel asked his audience to think about as part of the Great Compression has to do with streaming services and subscriptions. When he asked anyone in the credit union audience who did not have at least one streaming service subscription to raise their hands, no hands were raised.
“What is the connection to running a credit union? How has this changed consumer behavior? Netflix has close to 250 million subscribers, a billion hours streamed,” said Joel. “We are in a place where consumers have said, ‘I don’t want to buy one thing; I would rather pay a small monthly fee for access to a whole library.’ You need to figure out how that applies to you as a financial institution, otherwise it’s good night and God bless. Where are the opportunities for you to offer these subscription-like models?”
As a humorous aside, Joel noted how it wasn’t that long ago that parents cautioned their children to never talk to strangers and never get in strange cars. Now parents use apps to contact people they don’t know for cars into which to put their kids.
Something to Talk About
A second trend to watch, Joel said, is voice-activated devices and transactions.
“We’re seeing something happen here that will really affect your business,” said Joel. “Consumers who actually have these speakers and devices spend more. Why? If you think the ‘buy’ button was easy, how easy is this to use? The ease of use leads to adoption increases and you see changes in how people buy. It’s not about the speaker or the watch; it’s the underlying technology, the voice-enabled technology.”
What credit union leaders should take away from those examples, according to Joel, is plenty of reasons to ask “what if?” questions.
“It makes a connected Internet much more profound and your jobs as credit unions as you interact with members a little bit different,” he said. “They might look at paying a loan or their account in a different way. It’s a very different engagement for them. It’s natural and organic to speak to technology and we are on the precipice of this.”
The Age of Efficiency
But none of that is about technology, Joel told the meeting.
“We are living in this age of efficiency. How can we be more efficient? How can we use these things consumers have already adopted to make it easier for them? If you can, that’s where the wins take place,” he said.
The Three S’s
The last two years are marked by what Joel described as the “three S’s,” which are:
- Survival Mode. Survival mode began in March of 2020, according to Joel. “It was pretty scary for everyone. Productivity went through the roof because everyone was afraid of being fired.”
- Sustain Mode. Sustain mode occurred in August/September 2020. “We realized we have to do more now to connect with our members/customers. We realized this was going to be a longer haul. It wasn’t just engaging with members, it was about engaging with our employees, especially those living at home and stuck in a 1,000 square-foot-place who really need to get out of there.”
- Strive Mode. “I think we are still reacting to this K-shaped recovery.”
The Retail Model
If there’s a model credit unions should look to and learn from, especially around the three S’s, Joel said it’s the retail industry.
“Prior to pandemic, ecommerce was about 15% of all commerce,” said Joel. “Then the pandemic strikes and it goes to 70%-80% and now at 30% or so. It’s buying vs. shopping. Physical shopping is really a social business.
Buying, and this includes credit unions, is very transactional. It has created a paradox. With the transactional, we made sure it was get in and out quickly. The online players were thinking how do I make this more engaging, more social? They retailers were sanitizing for my health, but killing my experience. You really have to think about what that paradox switch means to you. Where does this leave companies? When I work with credit unions, it does feel more like you are trying to create an experience.”
That paradox is best summed up in the quote from Jeff Bezos, below, Joel said.
The New Experience
So, what is a great experience like?
According to Joel, credit unions need to recognize that experience doesn’t happen in physical spaces now, it happens on devices.
“You feel it a lot more during this Great Compression. Is your credit union mobile first? Or do you still design for the web first?” Joel asked. “If the pandemic has shown anything it is that services are the new experience. This includes the subscription model as the future of financial services. Apple generates about $55 billion in services now, or about 20% of total sales annually. It also keeps customers on their devices longer.”
Forcing Innovation
Joel advised credit union leaders to take a step back, look at what they are doing, and ask if there are other ways to create a better member service experience.
“This will be a moment in time when we will see which businesses really built equity with their customers,” he said. “If you start ripping away experiences that made it easier for the customer, you will be the loser. Make your complexity invisible to everybody else.
“What do you really see in your business that your digitized that might become a new service, or a service on top of a service, or a new business line? One way to define your way against a competitor is to think about these services as the new experience.”