Marketing To Banks: The Mgm Approach

by Michael Manes

The best definition of marketing is adapted from a quote in God's Little Instruction Book: 'If you want a glass of milk, you don't sit on a stool in the middle of the pasture and expect a cow to back up to you-you go find a cow!'

The purpose of marketing is best explained by this story: A rookie producer went on her first sales call. She'd researched carefully and was certain she had the best product at the best price. Soon she came back dejected. When the sales manager asked her about the call, she answered, 'I had the best product and the best price-I guess you can lead a horse to water, but you can't make it drink.'

The sales manager corrected, 'Your job isn't to make the horse drink. Your job is to make the horse thirsty!'

This idea is the foundation of the Michael G. Manes (MGM) Marketing Process. The following steps in the process are based on that foundation:

1. Where/who are the prospects? Consider banks, agents, and associations (American Bankers Associations, state bankers associations, correspondent banks and their associations, association of banks in insurance, insurance companies wanting to sell to/through banks). Who is the individual decision maker in each group?
2. How do you communicate with these prospects? Where do they get their information? What conventions do they attend? What magazines do they read? Which decisions makers can you contact on a one-on-one basis? Where can you get their names? Can you reach them through the Web? How? Who will refer you to them? What's the best way to sell them?
3. What's the best way to sell them? What makes them thirsty? How does your product benefit them? Don't get lost in explaining features!
4. How do you best service them? How do you keep them happy after they've bought? What keeps them from leaving you?
5. How can you compete for each prospect category? Who else is doing what you're doing? Who's doing something different that you might do better with your products? How can you innovate to compete better?
6. What compensation systems or rewards do you need to motivate individuals or organizations to help you? For example, could you create a free or low-cost monthly newsletter for the American Bankers Association that would make them look good to their state chapters and also help market your services to the chapters and their member banks? If you paid agents a commission per newletter to get banks to use your newsletters, might you make more sales?
7. How do you manage/report/monitor (measure results)? Are all these efforts working? If yes, why? If not, why not?

To use the MGM Marketing Process to market your products and services to, say, an independent agency you need to ask yourself these questions:

1. Who is your customer? Banks, agents working with banks, joint ventures, vendors and suppliers to these new systems. What kind of information do they want or need? Distinguish between the external customer and the internal customer, such as an employee or the board.
2. What products do you offer that meet these wants and needs?
3. At what price will this product or service sell? This is the most important step! Henry Ford's genius lay not in the creation of the assembly line, but in his discovery that at $500 he could sell an unlimited number of cars. The assembly line evolved as the only way to build a $500 car.

   A change in pricing is creating a revolution. We've been operating under the old process of cost-based pricing, in which manufacturers and distributors add up all of their costs, add a profit to the total-and arrive at their price. In reality, a limited number of providers offered products to a mass market, and they could charge what they wanted.

   Now we're moving from cost-based pricing to price-driven costing. By establishing a price, the marketplace will dictate the qualityof the product. Technology, a more sophisticated consumer, intense competition, and a global marketplace are driving this change. We'll have a target-market system in which providers will have to meet the needs of a 'niche of one'-the basis of mass customization.

   The price the market is willing to pay is the only benchmark that matters. It will require innovations in the process! It might mean discounting the price, adding value, some combination of the two.

4. How can you profitably deliver at this price? Innovate, innovate, and innovate! What's your assembly line? Do you need to streamline delivery or strengthen the relationship side of the process? Will people pay more for your product if it reduces the hassle in their lives? This answer is often yes.