2020 Marketing Strategy #1 "Don't Kill the Goose That Laid the Golden Eggs"

Pretty clear no one who worked for Wells Fargo had ever heard that"To kill the Goose That Laid the Golden Eggs" is an idiom used of an unprofitable action motivated by greed.

Both the NY Times and WSJ reported that Wells Fargo would be fined $1B by the Consumer Financial Protection Bureau for its fake accounts scandal.

According to the Times: “…regulators are poised to impose a $1B penalty on the bank for infractions related to mortgage rate extensions, auto loans, risk compliance, and other matters.”

The Times continues: “that comes on top of the $4.25B set aside last year and a $145 fine in 2016.”  “It’s a windfall for the legal sector, the bank had to hire a horde of expensive lawyers…”

If only the marketing folks ran Wells Fargo rather than the bankers; they wouldn’t have violated the 10 Laws of Marketing:

1.    The Platinum Rule:  Go beyond treating customers how you would want to be treated. According to Dr. Tony Alessandra in his book “The Platinum Rule:”  treat customers the way they want to be treated.  Customers expect their bank to be looking out for them, not, looking into them.

2.    The Category Promise:  Every category has a promise, every brand in that category needs to deliver that promise.  If you are selling MBA’s, you align to the category promise of accelerated professional growth. Your “brand promise” is the way your brand distinguishes itself in its category.  The banking category promises trust. The banks that Wells Fargo lost market share to over the past 5 years delivered on the category promise.

3.    Reason for Being = Reason for Need:  Your Reason for Being has to be in alignment with your Customer’s Reason for Need; Disney World promises “magical memories” to the millions of visitors who are looking for a magical vacation. You don’t ever believe your bank will be the bank robber.

4.    Customer Lifetime Value:  Turn into Shark Tank and you will hear the sharks ask each contestant: “How much is a customer worth?” This is a question that is based on how much the company will “earn” from each customer over their lifetime.  It doesn’t refer to how much you can swindle out of your customers in the short term.

5.    Value Proposition:  My students struggle with this concept, but it essentially means the value you provide for the money given.  When Olive Garden advertises unlimited salad, unlimited bread sticks, and a second order of pasta to take home- it’s clear their value proposition is very competitive in the mid-priced family restaurant category.  Banks all sell commodity “rates” and have to distinguish on service, so “how” they do what they do is where their value proposition is earned.  Stealing from your customers lowers your value proposition.

6.    The Employee Rule:  Most successful companies (that have both employees and customers) have figured out that there is a direct correlation between how the employees are treated and how the customers get treated.  We’ve all been on a “friendly skies” flight with grumpy United attendants suffering their 8th round of merger-related company mandated givebacks. Wells Fargo had a unique approach to treating their employees, those that spoke up on behalf of their customers were fired.

7.    Knowledge Loop:  All companies need a method to capture data and insights from their customers, turn that into actionable knowledge so management can develop strategies  more relevant, compelling, believable, and persuasive. Tide was quick to uncover teens were eating their detergent pods and quickly took action. Wells Fargo didn’t use their knowledge loop to uncover and inform the C-Suite the sales branches were stealing from their customers.  The branches did use their knowledge loop to play a 3-card monte shell game with their customers.

8.    Repeat Business:  Every marketer knows you can fool someone once.  I used to work with an ad agency CEO who said: “I can always fill a car dealership lot full of people by promising they can see the world’s only living unicorn.”  Unfortunately, when they realize it’s a spray-painted goat with a horn taped to its forehead, everyone leaves and no one comes back.  When sales departments run unchecked, performance bonuses exceed the laws of gravity, and no one is focused beyond the immediate sale,then customers are seen as pigeons to be fleeced instead of annuities to be invested in. According to the NY Times: “Carrie Tolstedt, who led the community banking division responsible for the fake accounts...had to give back $67 million, but left Wells Fargo with $134 million before claw backs.” 

9.    Two Strategies:  There are fundamentally only two growth strategies.  Grow from acquiring new customers or grow from earning more from existing customers. Home Depot has devoted space, services, product, and systems to reach beyond their “weekend warrior” customers and successfully build an incredible contractor business.  Apple stores added a “Genius Bar” to help passionate customer base learn how to use more of the technology designed into products. When customers learn how to use their products more, they commit to more of Apple’s ecosystem. Wells Fargo pursued a strategy of stealing from their most valuable customers.  According to the Times, in this booming stock marketing, Wells Fargo market equity is off 16% while their peer group has doubled over the past 5 years. (Carrie Tolstedt needs to give back more).

10.  MVP’s: The core fundamental principle of marketing (retailing, sales, and business) is find out who your most valuable customers are, understand them (12 ways to Sunday), uncover why they use you and love you (above all of your competitors), understand what their value is, nurture and grow them, and recruit others that look just like them.  

"A cottager and his wife had a Hen that laid a golden egg every day. They supposed that the Hen must contain a great lump of gold in its inside, and in order to get the gold they killed [her]. Having done so, they found to their surprise that the Hen differed in no respect from their other hens. The foolish pair, thus hoping to become rich all at once, deprived themselves of the gain of which they were assured day by day." -The Brothers Grimm

It’s not too late for smarter, more effective marketing in 2020 . Develop a strategic road map of “What” needs to be done, “How” it will get done; “Where you’re at now” vs. “Where you need to be.” As you begin to build, go beyond the conversation of “let’s keep what’s working, and kill what isn’t.”

Specifically, don’t update last year’s plan. Do the hard work of starting with a blank sheet of paper, define where you need to be and create the plan that gets you there.

Instead, ask what will get you to purposeful strategy that creates customers, value, demand, revenue, traffic, growth, and profit.

Getting Your Marketing to a Better Place

If your marketing conversations aren’t going beyond “we need more customers,” consider High Performance Marketing Boot Camp. This is our third year with over 400 attendees. This next boot camp (September – October 2019) consists of small group workshops.  Each session is “customized and focused on your company.

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This is active learning, not speeches. It’s proven tools and templates focused on your company. You do the work; we solve your challenges with a personal trainer working on solutions you take with you. This isn’t the 4P’s. You will leave understanding how all your marketing and sales work together, strategically, to drive your business.

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If you are interested in learning more, we offer customized workshops inBusiness, Growth, Sales, Marketing, and Brand strategy. Each workshop is limited to 8 participants.

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Dave Patrick teaches advanced brand strategy, marketing, and entrepreneurship in the MBA programs at the University of Missouri and University of Kansas. He’s the CEO and Co-founder of High Performance Marketing Boot Camps which helps companies improve their marketing effectiveness. He’s also the President of WizeWebz (www.wizewebz.com) a business growth consultancy that helps clients with marketing and technology solutions.