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Introducing Tribed: Banking experiences for niche communities October 17, 2011

Posted by nichebanking in Bank customer segmentation, Banking business model, Future of banking, Niche banking, Niche banking examples, Nicheruptive, the Bank for Dog Fanatics, The Long Tail of Banking, Tribed.
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After many anonymous, vague and philosophical blog posts and tweets over the last many, many months, I’m pleased to share with you what we’ve been working on.

First, let me introduce myself: I’m Jeff Stephens. Chances are, if you have been reading this blog, you may already know who I am. I’m founder and CEO of small brand consulting shop Creative Brand Communications, and its little buddy PSST! Word of Mouth Marketing for Banks and Credit Unions. I also blog a little bit about my ideas and entrepreneurship in general at www.jeff-stephens.com. In fact, I have posted a video message on that site today as well, if you’re interested.

I’m pleased to introduce my new business, Tribed: banking experiences for niche communities. We plan to develop an extensive series of small, highly targeted online-only ‘direct’ banks. Why? Because we want to make financial services more relevant to consumers. Our plan is to do this by providing banking member experiences that are tailored to extremely narrowly defined member segments, who share in a particular passion (“tribes”). You can read the official Tribed press release here.

As the first example of this concept, today we’ve also launched Wag, a new website aimed at the most avid dog fanatics, at www.dog-bank.com. The website is currently an online publication providing unique content about how personal finance topics intersect with and impact the lifestyle of the fanatical dog lover, and facilitating discussion with community members about these topics. Once we have completed the setup of our direct banking operations, the website will offer those services as well, while continuing to provide ongoing content. Currently accepting unlimited reservations for its service, Wag will cap initial membership at 1,500 members to maintain a high quality group of engaged dog fanatics. You can read the official press release for Wag here.

I hope you’ll take a few moments to poke around our sites and learn more about our concept. If you have questions, comments, etc., please be sure to share them. You can drop me a line at j@niche-banking.com.

Welcome to the long tail of banking!

Everyone’s passionate about something…and somehow, money relates April 29, 2011

Posted by nichebanking in Bank customer segmentation, Future of banking, Niche banking, Nicheruptive, The Long Tail of Banking.
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We all have our own interests and passions. We all have one topic, that if we were at a party with a group of our civilian friends, we would be the most expert in. For some people, it’s Star Wars trivia. For others it’s guitars. And for some, it’s wine, or coffee, or beer.

Everybody is a geek about something.

And somehow, money intersects with that passion; that “geekdom.” In some way–whether major or slight–money is involved with the person’s pursuit of that passion. Money might:

  • facilitate someone’s ability to pursue the passion (ex: funding the purchase of classic cars)
  • fund their ability to attend events with others who share the passion (ex: funding a trip to Comic-Con)
  • finance their dream to build a business around their passion (ex: funding a startup brewery)
  • serve the unique needs someone has when they pursue their passion (ex: managing money during a year-long trip around the world)
There are a million answers. And each answer is 100% unique to the specific passionate group of people it relates to (that long tail, niche community).
We tend to explore this critical intersection: where what you’re passionate about intersects with money.

A Terrible Fit For Most People May 15, 2010

Posted by nichebanking in Bank customer segmentation, Niche banking, Problems with traditional banking.
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One of the fairly universal things about today’s banks is that–while they may not admit it–they generally believe they can be everything to everyone…all varieties of needs, and all varieties of values.

Serving All Varieties of Needs…: You’re unbanked? We’ve got products to help you build a credit history. You own a small business? We can help you grow. You’re affluent? We’ve got private banking services!  Etc.

…And All Varieties of Values: You like to bank remotely without talking to anyone? We’ve got all the latest in remote deposit capture, mobile banking and more.  You like a lot of in-person hand holding? Great, because we’re relationship bankers!  You’d prefer better rates over personal service? Guess what, we can give you both! Yada yada.

When you’re a niche bank, it’s an understatement to say you don’t want to serve everyone.  In fact, you know you’re a flat out TERRIBLE fit for 99% of people…and even if those 99% wanted to bank with you, you wouldn’t let them.  You’d turn them away, because you know you’re not a fit for them, and that ultimately they’ll only be so-so customers at best.

But guess what?  Those 1% of people who you ARE a good fit for?  You’re not just a good fit, you are an AMAZING fit for them.  You are their dream come true, and they’re better customers than you could ever hope for.

Examples of Themes, Not Niches March 19, 2010

Posted by nichebanking in Bank customer segmentation, Niche banking, Niche banking examples, Nicheruptive.

To continue the conversation from our previous post, Themes vs. Niches, and to help understand the difference between themes and niches, let’s take a look at some examples of themes. Then, by comparison, when we look at niches, it will be clear how they differ.

A good example of themes can be found in Sin City. Take, for instance, the Paris casino and the Venetian casino in Las Vegas. These are essentially exactly the same product, just with different motifs. They are both still casino/hotel/resorts with the same business model.

Some people may incorrectly argue they are niches. That’s not the case for these companies–here’s why:

  • They make money the same way: they sell hospitality experiences, provide gambling, shopping and other activities. Their revenue and expense categories are very similar.
  • The experience they deliver is the same. Sure, things “look” like Paris or Venice at either venue, but the experience they are selling is the same.
  • The experience is not authentic–it’s cosmetic and faux.
  • The experience is not engineered specifically for customers of a certain segment.  People don’t come to The Venetian because they have a common love for Venice; they come because they want a fun Las Vegas experience…which is the same as what the Paris sells.

There are existing theme banks. Take Redneck Bank for instance. Catchy, funny and gets attention.  But does it create a true experience tailored to a certain group of people who align with being rednecks? And does it make money in a unique way that is centered around this redneck service?  Nope. It’s just like any other bank, but it comes in a different flavor.

The world deserves true niche banks.  That’s where Nicheruptive comes in.

Micro-segmentation: The basis of niche banking December 2, 2009

Posted by nichebanking in Bank customer segmentation, Microsegmentation, Niche banking, The Long Tail of Banking.

Earlier this week on Twitter, we were pleased to see some good conversation about niche banking (check out @miinsider, @jenshefner, @stacyliz and @matt_vance on 11/30/09 for some of the conversation exchanges).

@Matt_Vance used the term “micro-segmentation” in his tweet, asking if there was really a point to micro-segmentation in banking. Based on the concept of the long tail, the answer is a resounding yes! In fact, it’s micro-segmentation that is truly the basis of niche banking: dividing customers into tiny segments. (Special thanks to Matt for providing a great term, micro-segmentation, for us to use in explaining our concept.)

But the key for niche banking is in how the micro-segmentation happens. For long tail banking, customers must be micro-segmented by interest, passions and pursuits…not by demographics. I point this out explicitly, because the natural tendency in banking is to slice and dice customers and targets by criteria such as age (Gen Y), geography (within a region, or a credit union’s charter zone), social status (high net worth, etc.), race or profession (business owners, teachers, etc.). With niche banking, though, it’s important to tap into people’s passions, and become part of the communities that form around those passions. After all, it’s not “being a business owner” that brings people together into social communities, it’s a passion for being one’s own boss, or commiserating about cash flow woes, that brings people together.

Bye Bye Mass Appeal; Hello Niche Appeal November 24, 2009

Posted by nichebanking in Bank customer segmentation, Niche banking, Nicheruptive, The Long Tail of Banking.

In the last post, “Why Small Slices Didn’t Work…In the Past,” we discussed how in the “olden days” (like last year) a brick-and-mortar bank would need to have mass appeal in order to attract the critical mass of customers needed to make the bank viable.  This resulted in very bland, diluted brands that don’t offend anyone…but also don’t really resonate with anyone.

With the Internet, however, that’s no longer the case.  In fact, the Internet is making that approach totally obsolete.  You see, the web is amazing at delivering tailored, specific and relevant content to people, based on what they’re interested in.  You’re into left-handed crocheting?  No problem.  Love baking your own vegan dog biscuits? Easy to find others who share that passion.

In fact, not only has the Internet enabled this, it’s training us to expect this level of niche information.  It’s showing us that we no longer have to put up with boring, generic content or experiences.

Thanks to the Internet, banking today knows no geographic boundaries–and there’s no need to try targeting every-other-person in a specific region, in order to create a viable bank.

Let’s look at a rough, crude calculation, just to make a point.  Each US-based Internet direct bank has access to the 227 million Americans online.  If you assume an average $2 billion bank might have maybe 50,000 customers or so (just a ballpark), that means each of those banks needs 0.02% of the US population as its customer.  Two one-hundredths of a single percent.  That’s a pretty small and narrow slice of the population, and you don’t have to cast a very wide net to get that portion of the market.  So why are banks marketing as if they need to be attractive to everyone?

See–there is no need to be generic anymore.  In fact, there’s a need to NOT be generic anymore.  There’s a need to be so ridiculously focused that you can deliver a highly specialized niche experience that a certain group of people will LOVE, and all the others (the vast majority) will hate.  Today, mass appeal is almost off-putting.  It’s niche appeal that gets people fired up and passionate.

The question then, of course, is how exactly do you go about doing that?  The answer to that question is exactly why we formed Nicheruptive, and we look forward to sharing our plan with you.



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