Selling and the Customer
When it comes to designing marketing campaigns, the marketing staff tends to view compliance with some skepticism - if not outright hostility. In fact, many marketers simply see compliance and the compliance manager as a barrier to getting the job done. They'd much rather not involve you because that means "ruining" their ads. After all, compliance people tend to bring up problems like trigger terms or insisting on including APRs that tend to be less attractive than the teaser rate featured prominently in the ad.
It usually seems that compliance is one thing and marketing quite another. When marketers see it this way, they may miss the point. If marketing ignores the spirit of compliance, to say nothing of the technicalities, the resulting campaigns may have unfortunate results.
As a bottom line, the goal of the marketer is to sell. Unfortunately, the emphasis is all too often on selling and not often enough on the targeted purchaser. Marketing becomes too much like war, going only for the count and not considering the long-term harm or benefits.
Marketers tend to measure success by how much an ad pulls - measuring the number of responses or inquiries to an ad. Or they measure success by the actual number of sales that were made or closed in response to the ad or campaign.
When was the last time a marketer measured the success of advertising by measuring the satisfaction of the consumer with the product and/or the purchasing process? How often is marketing success measured by long term relationships developed? Granted, this is almost impossible to measure, but shouldn't we at least try to take it into account?
Selling should focus on the customer and what the customer wants. It should not be viewed as a competition with the sole goal of making the sale. When the only goal is to make targets, the sales people are forced to pay more attention to the sale than to the customer. The sales person becomes pushy - and pushier to make the goal.
The ultimate in goal-measured pushy selling is predatory lending and unfair or deceptive practices. Just look at the cases such as Providian or the Associates. The goal was to sell, make fee income, and not to care what happened to the customer - or to the loan. What did happen was disaster - to the customer and to the lenders.
Compliance is designed, piece by piece, to balance the tendency to push sales over nurturing long-term customer relationships. As it does this, it also serves a long-term marketing purpose of building strong, lasting customer relationships. It is from those long-term relationships that the most reliable income is generated.
Several compliance regulations, such as the Truth-ins, establish tricky technical requirements that drive creative people nuts. Situations involving marketing and these regulations have to be handled with creativity by the compliance specialist. Otherwise the gap between those who sell products and those who try to sell compliance simply grows.
Other regulations, such as Fair Lending and CRA, carry different messages. These regulations focus on the needs and capabilities of the consumer. They require the lender to look for credit needs and meet them. They require the creditor to match products with customer capabilities. They require the creditor to focus on the long term relationship.
In a sales environment, with the business of banking placing emphasis on income, the industry cannot afford to forget the purpose of compliance. Neither can the marketers. So the next time you review an ad, think of ways to persuade the marketing staff that you are helping them rather than throwing obstacles at them.When you think about how compliance can support the advertiser's objective you accomplish more than compliance. You support sales and long-term customer relationships.
Copyright © 2004 Compliance Action. Originally appeared in Compliance Action, Vol. 9, No. 7, 7/04
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