by Stella Fayman on May 21, 2012
Hidden away in the Gold Coast lies an experiment in marketing that is gaining momentum in scope. ING Direct, known before its acquisition by CapitalOne to be the irreverent, “cool” online bank, has a bank branch. This isn’t just any bank branch…in fact it’s a coffeeshop with free WiFi, computers, cheap coffee, and good food. It’s also a community educational space with workshops on financial literacy, social media, etc. held regularly. Schools are welcomed to hold workshops in the classroom space with TVs blaring CNBC, all wrapped in ING’s signature orange color.
In the back, there is a transparent room where the actual business happens: customers sign up for accounts. See, the “baristas” double as bankers, and try to sell you on ING savings and checking accounts while you order your latte. It’s all very laid back and cool. ING has 75 locations of this cafe concept across the US, and the primary purpose is brand building.
The obvious question here is ROI. Does this concept convert?
Nestled next to a college, I can say I’ve seen students convert with the promise of $100 for coffee. I’ve also seen almost every person ahead of me in line nod politely and decline while hearing the baristas try sell accounts. As one data point, I can say that exposure to this brand and the cool coffeeshop converted me: I caved and got a savings account about one year after becoming a regular customer at the cafe.
The concept of thinking about spaces to build brands is building steam: companies see the success Apple has experienced branding their stores as places to come hang out, play with their products, and have free internet. Attention to design and user experience in these stores is paramount, as is the consistent emphasis of having friendly customer service folks on hand to shoot the shit…or talk about products.
Recently, State Farm ventured in community brand building by opening a coffeeshop/hang out/event space called Next Door on Clark and Diversey. State Farm’s logo is seen almost everywhere, but it’s definitely not egregious, and the spot has grown in popularity as being a neighborhood staple since its opening. State Farm is clearly trying to label itself as the “cool” brand for the younger generation with efforts such as this (and sponsoring OK Go videos) in addition to their regular advertising aimed at an older demographic.
So back to ROI. Here are three ways this concept (cool, community focused) is boosting ROI for brands better known for stodgier folk (insurance? banks? come on.):
The mere-exposure effect is a psychological phenomenon by which people tend to develop a preference for things merely because they are familiar with them.
In essence, we may pick State Farm insurance not because they are the best insurance agency for our needs, but because we have coffee and inadvertently stare at their logo twice a week. I fell prey to this phenomenon when it was time to choose a savings account: ING, in addition to having the best rate, was also the first bank I thought of because I hang out at their cafe a great deal.
2) Social Benefits- As branding themselves as welcome and helpful to the communities they serve, these brands are establishing a foothold as companies who care. Though others may have outreach programs, these do no get the visibility that a popular, physical location has. Not only is State Farm using the outlet to build its brand, but it’s positioned as a community space first and foremost therefore giving State Farm a sense of moral hierarchy over other brands.
3) Targeting a hard to reach audience- It’s getting harder and harder to mass advertise. Fewer and fewer people watch television, and social media ads tend to foster opting in (for example, “liking” a bran on Facebook or “following” them on Twitter). This means that you choose to be exposed to the brand’s messaging instead of being blasted unwillingly. How do more “boring” products like insurance compete in an opt-in platform? This is where positioning its brand as a cool community resource comes in. State Farm can get all of the people to opt into community messaging, while forwarding their agenda along the way.
And yes, in case you’re wondering, I am sitting at ING Direct writing this right now.