The Irony of Members: They Want Everything, And Want 1 Thing

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Consumers have more than 13,000 mutual funds to choose from. On top of 69 menu items at McDonalds, 47 flavors of Crest to use afterward, more than 6,000 distinct VISA cards to finance the toothpaste and in excess of 300 digital TV channels on which to see advertising for even more ways to clean one's teeth.

Too much? The answer's a big, obvious yes, according to Dr. Peter Sealey, founder and CEO with Los Altos Group. Speaking to CUES' Marketing, Operations & Technology Conference here, Sealey urged credit unions to be watchful of how changing tides can drown a company.

"GM: a great corporation caught in the past with a business model that just makes no sense today," he said.

The theme of Sealey's remarks was the overwhelming feeling of "decisions, decisions, decisions." He pointed to demands on consumers' minds to stay on top of lease mileage, frequent flier status, cell phone minutes and more.

Capacity For Choice Is Finite

"Human capacity for choice is not an infinitely expandable commodity," noted Sealey.

Sealey noted that when he worked for Proctor & Gamble in the 1960s, the average household spent two hours, 11 minutes preparing food every day. Today that figure is 17 minutes. "I think many marketers are still caught back in that period when people had that kind of time. You can't do that anymore. I sense there is a movement toward simplicity."

According to Sealey, the four "R's" of Simplicity Marketing are: replace, repackage, reposition and replenish.

"It's not taking away choice, but using consolidation and substitution," he said. "If I introduce a new package that is really better is there an old one that can be taken away? Repositioning is the ability to communicate what the new package stands for. The question for you is how to position yourself to really allow people to understand, compare and make an intelligent decision."

The ultimate goal, said Sealey, is "replenishment marketing," which he described as "zero defects at an everyday low price that rewards loyalty."

"Think in your home of the products you'd be willing to have a manufacturer keep in stock at your home," he told the CUES audience. "I've made my decision and I just want to see (the product) appear. I think most of us are going to find ourselves establishing relationships with a few institutions to do that, and I think you have that opportunity in financial services with your members. You want to be the place that takes the part of the life for the member that requires shopping around and replace that."

Alliances Called 'Critical'

Not surprisingly, Sealey said it is the Internet that will enable much of that to occur, saying the old limits of time and distance have been destroyed. One result, he suggested, is that alliances and joint ventures will be critical for credit unions as they outsource functions-outsourcing that's invisible to the member.

"If you go back to 1902, we had one-to-one marketing. As mass media allowed us to reach more and more people, it became one-to-millions-marketing," he said. "I think that reached a peak in 1979, when Ted Turner put WTBS on cable. Now, as media has started to fragment, we're moving back to one-to-one marketing. But the difference now is this: where the marketer used to have the power, the consumer now has the power, the knowledge and the information."

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