Seven months ago, best-selling author and marketing guru Seth Godin published a blog post called On Pricing Power that said this:
Then a week ago, Ted Thames of Gonzo Banker, in a post similarly called The Power of Price, said something very nearly the opposite:
Thames' post is a thought-provoking counter-point to Godin's pithy advice from seven months earlier, primarily arguing that for bankers it all comes down to a lower priced product, whether it's a free checking account or a no-fee CD.
Godin, meanwhile, who is revered among marketing professionals, argues that it works better to create something indispensable rather than something cheap, but does he really know what it takes for a bank to do well? As a marketing guru, Godin consistently argues in favor of creating something special rather than commoditizing. In the same post, Godin writes:
It's hard to imagine a bank taking Godin to heart and deciding to "create art," but Thames might not necessarily disagree. He credits two banks in particular - Capital One and Ally Bank - for crafting a more compelling brand than their competitors, and for creating smart advertising. Thames writes that a bank's marketing person should be upper management and advises investing in quality marketing.
Ultimately, though, Thames thinks it's price that closes the deal: "Creativity and message design can gain customer attention long enough to deliver the price punch."
Both Godin and Thames are worth listening to. We know that a superior user experience, particularly in online banking, can both attract customers and make them more loyal. But so can a free checking account.
Cheaper is the last refuge of the marketer unable to invent a better product and tell a better story.
Then a week ago, Ted Thames of Gonzo Banker, in a post similarly called The Power of Price, said something very nearly the opposite:
The leap from seeing the advertising to signing up online and buying the product is a long jump. Without the aggressive pricing, nothing happens.
Thames' post is a thought-provoking counter-point to Godin's pithy advice from seven months earlier, primarily arguing that for bankers it all comes down to a lower priced product, whether it's a free checking account or a no-fee CD.
Godin, meanwhile, who is revered among marketing professionals, argues that it works better to create something indispensable rather than something cheap, but does he really know what it takes for a bank to do well? As a marketing guru, Godin consistently argues in favor of creating something special rather than commoditizing. In the same post, Godin writes:
The goal, no matter what you sell, is to be seen as irreplaceable, essential and priceless... Of course, the realization of what it takes to create value might break your heart, because it means you have to specialize, take risks, create art, leave a positive impact and adopt generosity in all you do.
It's hard to imagine a bank taking Godin to heart and deciding to "create art," but Thames might not necessarily disagree. He credits two banks in particular - Capital One and Ally Bank - for crafting a more compelling brand than their competitors, and for creating smart advertising. Thames writes that a bank's marketing person should be upper management and advises investing in quality marketing.
Ultimately, though, Thames thinks it's price that closes the deal: "Creativity and message design can gain customer attention long enough to deliver the price punch."
Both Godin and Thames are worth listening to. We know that a superior user experience, particularly in online banking, can both attract customers and make them more loyal. But so can a free checking account.
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