Blue Ocean Strategy Innovation in Transactional Banking

Through one of my LinkedIn groups a fellow group member – Munib Karavdic raised a question as to whether a new St George product is an example of a Blue Ocean product. I originally set out to review the site in question and draft a quick response but ended up turning it into a blog post…

So I had a good look through the promo site. I can see a number of BOS principles reflected in this product.

Before I share my thoughts lets look at the existing Australian market space of transactional banking – largely a vacuum of innovation – bitter red oceans of competition. I suspect the last really innovative move was ING launching their internet only transaction accounts which has since been eroded into a red ocean. In reality it’s nothing more than poor tit for tat incremental changes. I think even NAB’s recent elimination of fees is simply a red ocean reaction.

Given the information at hand, I can see some clear elements of Blue Ocean thinking in this product; though some aspects of it might not qualify (i.e. the flat $5 fee per month – is that really lowering costs for the customer? If so, how is this communicated by presenting it as a flat fee when their competitors are promoting fee removal?).

What I find interesting is that I can see how they are appealing to their tiers of non-customers in a couple of interesting ways – primarily through 3 key strategies:

Savings Targets

Helping customers develop good savings habits

I see this as a really interesting attempt to move the idea of a transaction account away from being something you get in the mail every month to an interactive tool that you want to receive.

As we all know, setting up young people with good savings behaviours is important for their financial future. I think this is a reasonable attempt by St George to promote and support positive financial behaviour (as opposed to the disgraceful behaviour of some banks – ‘oh you’ve maxed your credit cards – let me give you more credit).

Budgeting Tools

Simple graphical tools for those customers who aren't numerically minded

This is the bit I think has real traction. This appears to be a legitimate attempt to help non-financially minded people make sense of the flows of money in and out of their lives. Whilst many of us might think it’s a simplistic representation of a financial situation – if it works for the customer then – it works. This isn’t new as some credit card companies already to this – but providing it as a service on a transaction account is. What I see here is the bank realising they have this data anyway to so why not aggregate and package the data so that their customers can use it and potentially modify their behaviours. What’s that you say? Banks and altruistic behaviour make strange bedfellows…

Round Up

An interesting approach to rounding...

I’m not sure what they are thinking with this feature. Whilst I get the virtual coin jar idea I’m not sure it’s solving a problem. But if this feature is another way of forced saving by stealth then in reality it’s a positive. Personally, I think there is more merit in rewarding account holders with bonus interest for every coin deposit they make over a certain amount.

Is this a Blue Ocean product?

Tough question to answer given the information provided – as I can’t help but feel they’ve missed some critical factors that (if included) would have created massive barriers for their competitors – chief amongst these is any form of measure of engagement and contribution. Deep down, this still smells like a bank product. I’m not quite seeing how they understand or recognise participation – and in my opinion – this is the holy grail

Have they really erected competitive barriers – I don’t have enough information to say yes or no. Maybe they have if you look at it in the context of their 3 peers. But I would argue not if you were to look into say the second tier of banks or more importantly the mutual sector (i.e. Credit Unions) where engagement measurement is more natural and intrinsic.

I think St George deserves praise for launching this initiative – but I can’t help but feel someone – more than likely a credit union is going to see this and really seize the day – particularly in terms of engagement that isn’t based on traditional bank metrics (i.e. share of wallet). I guess time will tell!

Drupal Content Management System Project Finished

We wrapped up another Drupal CMS project today for Brisbane customer – Mobicon Systems.

Tom Schults and his team had a good site that was doing an OK job for them but wasn’t built on a content management system.

We recommended they migrate their site to Drupal – the world’s leading open source CMS.

Mobicon Systems has developed a world leading mobile freight container lifter and handling vehicle – in other words a Straddle Carrier.

Wondering what a Mobicon Straddle Carrier is?

Here’s a picture

The new way to move freight containers

Basically these are a versatile, self-powered container handling machine that are changing the way shipping containers are managed in a variety of environments – including defence. The Mobicon units are a great example of Australian innovation – looking at a limitation with current container lifters and developing a cost effective alternative.

I’d argue that what Tom has developed is a great example of Blue Ocean Strategy thinking.

Blue Ocean Strategy – An Australian Case Study

Earlier this week I published a case study about how we used Blue Ocean Strategy for Smartpen here in Australia.

This was a really interesting project for us to undertake as it allowed us to utilise the skills we developed following our training with UCSI-BOSRC.

This presentation is the first in a series that we’re producing around this project and what we’ve learnt from it.

We’ve focused on the basics of Blue Ocean Strategy and how the core outcome of the work was the development and execution of a detailed social media strategy. The social media strategy is the key bit, as this underpins how we created the uncontested blue oceans.

Sports Teams and Social Media – are they doing it right?

The immersion of sport and social media continues with Sports Illustrated recently publishing an article recently regarding sports stars using Twitter. Whilst it’s interesting to watch a tool like Twitter being used by sports stars like Cadel Evans, Eli Manning, Lance, and the Shaq etc; I’ve had this nagging thought that the bigger opportunity is being missed by the players, clubs, and sporting leagues. Are they doing the right thing?

Wanting to kick this around further, I took the opportunity to sit down and chat social media with former AFL premiership winning player – David Thorpe. David is an astute businessman, a legend salesman and a guy who can see the big picture quickly. I was explaining the basics of social media and to help David I put it into a sports context – how could his former team in the AFL – the Bulldogs use social media to grow membership and game day attendance.

Two things emerged from my conversation with David that would help crystallise my view of the missing link.
Firstly David made the comment:

AFL clubs have the best membership base of any code in the country. They’re very good at getting and keeping members. It’s a very tribal sport.

This is an interesting point. They have a strong base of customers; they don’t need another tool to market to their members/customers.

David made a further comment that has proved crucial

In my day (the late 60’s and early 70’s) we would be out on school visits conducting clinics with the kids. The club would give us tickets to give away to the kids at the clinic. These weren’t just single tickets – they were family tickets as our goal was to get the family to the game and get everyone into the sport.

Our goal was to NOT give away the tickets to just the kids in our teams jerseys. We were under instructions to target kids in opposition jerseys along with girls – giving them tickets to the game.

This was when the light bulb came on for me (and is in fact the key second point). Their unstated aim at the time was to attract “non-customers” – this bit is important, as examining how you can attract non-customers is a core premise of Blue Ocean Strategy. This link explains non-customers.

So now I was thinking about how a team could use social media as an innovation tool so as to break down the barriers for non-customers?

So I took this defining thought and got the team together – this wasn’t just one idea but two:

1. Create an integrated social media strategy that connects to the broader community; and
2. Utilise this platform to engage with non-customers

We know a lot of clubs are publishing newsletters, have their key players writing blog-type articles. Many of the teams in our national competitions have multi-media rich sites – but they still follow the monologue model of communication. We wanted to go beyond this and develop a strategy that would give a club or league a clear sustainable advantage in how they connect with the community.

In most cases where a sports star is using a tool like Twitter (or Facebook), the model looks like this:

The intersection of sports stars and community via Twitter

If we look at the major leagues and teams around Australia, the model looks like this:

The Sports Club intersection with their communities

A good example being the Brisbane Bronco’s website – rich in multi-media and information but engagement is limited to signing up for an email newsletter. This is a monologue. Dialogue is left to the community via the numerous sports forums and communities.

The real potential for clubs and players is where they bring everything together and use social media to develop a dialogue with the community. In simple terms the model might look like this:

Social media will allow the club and players to connect to the community and have a dialogue

The intersection points (all 4 of them) is where social media delivers for everyone. Using tools like Twitter, Facebook, and blogs, the club can deliver a consistent message and provide the opportunity for the community to contribute and engage at a much deeper level than we’ve seen so far.  The goal is to move beyond the monologue and the use of canned blogs.

Objective #1 – A practical example

The first thing we need to do is have a high level strategy that makes sense and could be executed by a team or league. As a test case we looked at Brisbane based sports team – Logan Thunder. Logan Thunder participates in the Women’s National Basketball League in Australia. They’re new to the competition having been admitted in 2008. They already have a reasonably strong following and are located in the middle of large pool of prospective customers. What was interesting for us is that women’s basketball generates a lot of forum traffic as followers dissect games, players, and coaching performances so it seems we have a community that has some level of familiarity with social media tools.

The tools that I can see as being relevant for Logan Thunder include:

1. Creating a blog or blogs and using these as the first point of information distribution
2. Using a Twitter account to further distribute information about games, clinics, player updates, sponsor mentions, and community announcements
3. Using Facebook for the team, players, and coaching staff; creating fan pages, distributing team, player, and competition information. Facebook could also be used to allow fans to vote for their favourite player post-game

Because these tools can all be integrated, it becomes relatively simple to deliver consistent information for the community to absorb and engage with. This is the dialogue bit.

How would Logan Thunder put this into action? The ideas that we noted aren’t exhaustive by any means but we could see real value in such activities as

• Any time a player is in the community or at a school running a clinic they encourage the participants to follow them on Facebook and Twitter
• Newsletters, game information, community activities originate from Facebook and are then cross populated into Twitter, the team blog, and into the forums
• Involve the sponsors within these tools – for example a sponsor focused Facebook app that allows fans to vote for their favourite player – a fan who votes gets a prize along with the most popular player
• Get the coach involved in blogging with pre and post game reports, coaching tips, and mentor sessions for up and coming coaches
• Allow fans to Tweet from the games and feed these tweets into Facebook, and the team blog – this is already happening in Super 14 rugby
• Promote the teams social media footprint into the forums – encouraging the active contributors to engage with the team – Remember: make them love you or dislike you – just don’t leave them indifferent

These are our early thoughts and ideas and they’re by no means exhaustive. We can see some really interesting benefits coming out of this approach and given the cost is so low, we’d like to see teams and leagues get on the social media train because it’s not going away.

As I noted way back at the beginning of this post, we identified two key objectives in terms of how sports teams and players can take social media participation to the next level.

Objective 1 – Develop and execute a social media strategy – we’ve covered that here

Objective 2 – Utilising Blue Ocean Strategy and Social Media to attract non-customers – So we’ve connected to our members/fans, now what? How do we attract the non-customers? What does research on Facebook show? What groups of non-customers use social media tools and how could we reach out to them?

Workload permitting I’ll publish part 2 around the middle of June. Ideally we’d like to workshop some of the Blue Ocean Strategy ideas with a team – we’ll have to see if anyone’s interested.

Blue Ocean Strategy – Helping Sales Leaders move out of the red ocean

Through my business relationship with Smartpen and BigAnt I’ve been introduced to Blue Ocean Strategy.

I read about Blue Ocean Strategy sometime ago (I think via Harvard Business Review). It’s a very exciting approach to strategy and business thinking and one that has much to offer organisations throughout Australia and New Zealand who are looking to excel and differentiate themselves.

My interest in Blue Ocean Strategy is around how the strategy can be applied to help sales organisations overcome many of the self-limiting beliefs that pervade the profession.

The local team – Blue Ocean Strategy Regional Centre has kindly invited me to a 2- day workshop on the 15th and 16th of December in Melbourne.

I’ll be posting my thoughts after the workshop. You’ll also be able to follow my Twitter updates @markpk