Been having several Edward Filene Moments over the last few days as the discussion gains heat on monkeyshine mergers and the rise of the "me/me/me" credit union. Everyone associated with credit unions knows that Mr. Filene was the principal benefactor and key driving force behind the creation of the credit union movement in the U.S.
What many forget is that Mr. Filene was also a truly world class innovator in "merchandize -zing" - the Steve Jobs-like retailing sensation of his era. His flagship store was Filene's in Boston and his "guy in a garage", retailing innovation-incubator was the famous Filene's Basement.Edward Filene was a creative genius with an entrepreneurial spirit, who introduced many of the core sales and marketing techniques still used today. As a marketeer extraordinaire, Filene invented concepts like "fixed price/same price for all" , "XX% OFF" discounts, "two-fers", BOGO's, closeout sales, and the lay-away plan. The store also bought seasonal "close-outs" from high-end retailers and resold them for a fraction of the sticker price. Fashionistas scoured 'the Basement' for great values, and there were lots of them.
The store was most notorious for its annual wedding
gown sale, which featured the same high-end apparel, and came to be
known as "the Annual Running of the Brides"; because of the large crowds
that would form at the door, and the mad dash
that would take place toward the racks, when the doors
swung open. Filene knew how to
create sales excitement and shopping
frenzies in the department store space!
Part of Mr. Filene's great interest in the credit union movement was to help create a source of credit for working men and women, so that they could purchase some of the "small luxuries" in life "on installments." Fair and reasonably priced credit gave workers greater purchasing power... at places like Filene's Basement! Filene most certainly understood his
business, but more importantly he understood human nature, which made
his fortune!
In 1928 Filene was ousted from store management by his fellow
stockholders who were "troubled by his liberal management policies" ["like same price for all"]. Edward Filene was not "industry standard"! He died in 1937 and President Roosevelt had this (and more!) to say about him:
"Mr. Filene was more
than a champion of popular rights. He was a prophet who perceived the
true meaning of these changing times. He was able to make plain to us that our modern
mechanism of abundance cannot be kept in operation unless the masses of
our people are enabled to live abundantly. His democracy was more than a tradition. He did not repudiate the past, after the
fashion of some reformers, nor did he repudiate the future after the
fashion of those who fear reform. He believed in learning and searching
out the ways of human progress."
The store, on the other hand, became a victim of its initial success. Ultimately, Filene's was milked and me/me/me'd into oblivion by profiteers who "rebranded" Filene's from something quite different... into something which made no difference at all.
No presidential eulogy has been found praising their efforts...
A business no longer works, if it no longer really matters.
... especially credit unions.
Which retailers have different prices for each person? What was unique about same price for all? The rest are marketing gimmicks that you apparently don't believe in. You're so naive.. Indeed, Filene wanted his customers to finance his products, but like a modern day charge card or BNPL model. Not so altruistic actually.. The, Filene thrived for decades without him. Lasted for 83 years after they ousted him. Not the most compelling example of becoming me/me..
ReplyDelete2:45pm Guess you haven't heard of dynamic pricing?... also known as exploitative pricing. If you like to discriminate against your members, this is race-based pricing on super-steroids.
DeleteActually, it may become the solution to racial discrimination in lending. Now everyone can enjoy the benefits of discrimination - even you!
“Market-of-one” loan pricing represents the “holy grail” of profit maximization. In market-of-one pricing, all profile information on a member - provided by AI from all across the internet - is used for maximizing the loan rate charged. A different price is set for each member, for each loan product, through each channel.
A rate "tier" for each member! That can't be discrimination! We treat everyone equally... poorly!
"Thank AI for the many opportunities "we" will have to "know you better" !
2:45pm Also, has your CU passed the 83 year "subject-to-extinction" anniversary? Just asking...
Delete"...because of the large crowds that would form at the door, and the mad dash that would take place toward the racks, when the doors swung open."
ReplyDeleteAKA Black Friday now-a-days (before the internet) ...
You praise a Credit Union benefactor for being a marketeer extraordinaire and then bash a credit union for marketing. You are talking out of the both sides of your mouth.
ReplyDelete9:18pm Not sure how a person speaks out of one side of their mouth, interesting idea!
DeleteAdmit not being a fan of "industry standard" CU marketing... not much to it. Often looks identical to a Wells Fargo ad, sans stage coach!
Sort of an expensive, self-congratulatory selfie, no longer with the interests of the member top of mind.
Most of it is "me too" blather with the emphasis on the "me" (as in me/me/me!), while the "you" (what's in it for the member) is increasingly hard to find.
All together now: "We Are (????)" .... fill in the blank.
In the original income statement of credit unions there was not category for marketing. There was a category for education expenses. There seems to be two types of approaches to marketing. There is marketing by promotion and marketing by attraction. Attraction is a much more difficult way to market, but it does not cause the complications that promotion causes. Attraction cultivates members, and promotion gives you feckless customers!
ReplyDeleteOver the years, I refused to use promotion as a marketing tool. My credit unions were profitable and usually grew faster than the peers.
My credit union employees were educated about their unique role in the financial economy. Never did I care to have a customer-based relationship
because they were shallow. Employees tended to like the narrow product offerings that tended to be more cost effective and a simple sell. They enjoyed the fact that they did not have an ever-changing line of products that made identifying the product that met the member's need.
Truly, credit union will crash and burn on the cross of marketing by promotion because there are too many wild programs to keep up with, and if you are the same as everyone else, you are on the road to irrelevance. Enjoy the trip while it lasts! B