By Tim Coco

President and Chief Executive Officer

The late Paul Rand, creator of successful logos for IBM, UPS, Westinghouse, ABC and others.

Company logos are usually among the most misunderstood and poorly implemented facets of an organization’s marketing efforts. Yet, they make or break success.

Dominant left-brained executives often become CEOs and managers because they are logical, analytical and objective. Unfortunately, these traits either lead them to see no value in icons at all, at one extreme, or think too much about meaning and rationale at the other. Right-brained people are said to be more intuitive, thoughtful and subjective. They value imagery and emotion—ideal for marketing to the masses, but also read too much into logo design. Late designer Paul Rand, creator of successful logos for IBM, UPS, Westinghouse, ABC and others, places the arguments in perspective.

“A logo is a flag, a signature, an escutcheon, a street sign. A logo does not sell (directly), it identifies. A logo is rarely a description of a business. A logo derives meaning from the quality of the thing it symbolizes, not the other way around. A logo is less important than the product it signifies; what it represents is more important than what it looks like. The subject matter of a logo can be almost anything,” Rand said.

Concept: egos, copycats and the big fail

A common mistake in creating a logo is to try to target all audiences and all messages at the same time. Such efforts result in oversized, complicated and confusing imagery. Examples of these excesses include a membership organization that places a star, dot or square for every location or audience segment. An attempt to include everyone and everything creates a confusing and fatiguing image that appeals to no one. It is easily forgotten.

Another fatal error is creation of a logo that addresses a contemporary or short-term need. After the September 11, 2001 attacks on the U.S., a flurry of red, white and blue logos—adorned with stars, stripes, eagles, etc.—overtook the landscape. The public viewed these with skepticism and contempt, believing those businesses were opportunists rather than patriots. Similarly, green-colored environmental imagery has likewise been dismissed by consumers as “green washing.”

Don’t be condescending or underestimate consumers’ savvy. As famed advertising agency head, David Ogilvy wrote, “The consumer is not a moron, she is your wife.”

Instead, aim for simple images or stylized (but easily readable) text. Keep logos audience-centered rather than boastful. Your targets want you to be thinking of them and not bragging about how big or important you think you are. Ego-driven businesses and managers are the first to suffer in the marketplace. They invite adversaries to try to bring them down. Also, try not to copy someone else’s trendy idea. Like copying quiz answers from your classmate in fourth grade, you may be copying mistakes. This is a sign of low self-esteem and may even raise legal issues.

The most important benefit of a logo is its consistent and repetitive use. It becomes a shortcut for the business or organization in the public’s mind. The ugliest logos—Coca-Cola and General Electric, as examples—still work not because of their beauty, but rather because of their consistent usage.

Design: if it’s fun, you’re doing it wrong

As indicated above, distance yourself from contemporary considerations or you will be recreating your logo every year and losing the benefits of repetition. Just look at those dated “avocado green” or “harvest gold” kitchens if you need proof. Similarly, the characteristics of some new tool in a design program tend to result in a proliferation of copycat inventions.

Stay away from such clichés as scales of justice, clocks, columns, tree branches, etc. Seek originality and classic timelessness otherwise targets will view you as more of the same or be unable to distinguish you from your competition.

One of most important considerations in logo design is creating a piece that works in every iteration from signage, letterheads, envelopes, business cards, trade show displays, tall and/or wide ads, billboards, TV ads, websites, fax cover sheets, and even Web favicons (those little insignias next to your Web address in a browser bar). All too often a wide logo intended to be used across the top of letterheads or on a website either must be shrunken to near invisibility when used in a narrow advertisement or cut up and reassembled, sacrificing consistency.

Many managers and designers naturally enjoy the fun part of creating something and often don’t want to be bothered with science, research results or technical considerations. As boring and time-consuming as it may seem, consider all of the ways logos will be displayed. Create or require a Brand Identity Manual specifying how the logo should appear in every instance, what fonts are to be used, exact representations of color (Pantone Matching System, CMYK, spot, black and white, RGB, foil stamping, etc.), minimum sizes (for readability), whether reverse uses of the logo (white-only logo on a black background, for example) are allowed and what options are available when the logo must be reproduced in only grayscale (program books, for example) or solid black (fax cover sheets, etc.)

While full color (four-color process) printing is much more economical than it used to be, consider whether you can afford to constantly print a color logo or whether you should restrict designs to one or two colors. Raised (business cards), embossed or foil stamping (invitations, awards, etc.) are other considerations.

Microsoft and pals have dumbed down desktop publishing, but outputs are limited. Avoid do-it-yourself designing in Word, PowerPoint, Publisher, CorelDraw, etc. Logos should be designed in professional programs that support vector images. Vector images are those that can be scaled as large as a billboard without becoming distorted. File extensions such as JPG, GIF, TIF, etc. are not vector formats. Many such desktop publishing programs support only the red, green and blue (RGB) model intended for computer monitors. They will not properly display when given to a printer using the standard cyan, magenta, yellow and black (CMYK) print separations model.

Finally, advanced software programs are best placed in the hands of professionals. It’s easy to make certain elements invisible or transparent on the screen by placing white boxes over elements to be hidden. However, there is typically no white ink on a printing press and those little boxes will suddenly become visible. This is also true if you plan to have your logo appear transparent over a colored background on a website.

It’s more complicated than it first appears and perhaps not so much fun after all.

Execution: the logo goes to the bottom

Here’s a homework assignment: thumb through a major national magazine and see where company logos usually appear. You’ll find they are almost always at the bottom.

Good advertising is designed like an upside down pyramid that recognizes western human beings tend to read left to right and top to bottom. Graphics tend to be the first place the eye tends to land. As such, you’ll find most professional ads, billboards and other print materials train the eye to read from graphic to headline to body copy and then, lastly, logo. Consumers need to see or be convinced of an offer before they are told where to buy. Compared side-by-side, every scientific study has shown ads with logos on top significantly underperform to the point of almost being useless. Readers who see logos first subtly are sent the message,“The End,” and move on. Again, science trumps art in these instances.

It is the sign of an amateur to place the logo on top. Why then is it so ubiquitous in local, small town advertising? Advertising salespeople tend to put logos first, but only because they are catering to business owners’ or managers’ egos.

Websites pose an exception to the rule. This is because logos on the bottom may not be seen at all if users don’t scroll down.

Despite the length of this column, it addresses only a tiny fraction of the issues. Many rules also apply to slogans. If you have any questions, please submit a comment or call (800) 374-4103 or (978) 374-1900.

Goldman Sachs headquarters.

Last week, Greg Smith resigned from Goldman Sachs. Unlike the ordinary, “I quit,” Smith’s resignation letter appeared in the New York Times. He accused his former employer of ripping off customers and promoting seedy managers.

Smith kicked off a classic crisis communications problem for the company—one that any of you could face, albeit likely on a smaller scale. His critique initially wiped out $2.15 billion of Goldman Sachs’ market value and brought stinging criticism from a former regulator, CEO peers, industry pundits and even an heir of one of the founders. Would a firm of your size survive such a public lashing?

“The firm changed the way it thought about leadership. Leadership used to be about ideas, setting an example and doing the right thing. Today, if you make enough money for the firm (and are not currently an ax murderer) you will be promoted into a position of influence,” Smith wrote. He has been Goldman Sachs’s executive director and head of the firm’s United States equity derivatives business in Europe, the Middle East and Africa.

Sources of conflict

If you think only a disgruntled employee can cause this much damage, think about the effects of grandstanding public officials, whistleblowing regulators, former vendors and board members with loose lips.

Over the past 21 years, COCO+CO. has helped client partners shocked by such controversies as embezzling, labor disputes, environmental disasters, regulatory disagreements and worse. You didn’t hear about most of these thanks to proactive and genuinely honest CEOs who were not afraid to take advice and do the right thing. Putting out fires afterward always proves more difficult. To put it simply, open business cultures fare best during crises. Business with divisive CEOs and staff used to keeping information close to the vest tend to fail. Those who trust no one usually have something to hide. Here are some lessons learned.

Prevention requires planning

At the outset, crisis prevention requires planning. Most people hate planning because it’s boring, too much work or holds them accountable. However, in the end, planning is preferable to embarrassment or loss of money.

Plans should begin with goals. These may include ensuring financial viability (limit costs and litigation potential), preserving public trust and responsible image, quickly bringing crises to closure, preventing costly government agency involvement, reducing political grandstanding, avoiding “no win” deadlocks and taking full advantage of optimum market conditions.

Next, plans address “what if” questions. The example you don’t consider will hurt the most, but at least you will become more agile and better able to respond to any situation. While space is limited here, some obvious questions might be:

• What if a union tries to organize employees?
• What if confidential customer data is somehow leaked to the public?
• What if a staff member goes to the press about…(company finances, sexual harassment, erroneous customer fees, etc.)?
• What if a government agency accuses your organization of misdeeds?
• What if a neighbor accuses you of polluting their property?

Once “what if” questions are asked, consider proactive moves. Begin communicating now to fill the reservoir of good will before disaster strikes. If, as examples, the first time the local newspaper receives a press release from you is during an emergency, or an employee receives a newsletter is before a union organizing meeting, you will not be trusted.

Work now to build a company culture based on trust (e.g., reward managers who share information and operate as team players), conduct everyday open communication (full staff meetings, open door policies, etc.) and use tactics specific to each group of stakeholders (press releases for the media, electronic or print newsletters for employees or customers, quarterly community report advertising, etc.). Don’t just go through the motions since people can tell if you’re genuine or not.

This goes for boards of directors too

If you are a member of a board of directors, ask the “what if” questions at every meeting, and study the responses you receive. Dig deeper if you are not satisfied. Tough questions from a board member helped expose embezzling at a small employee credit union several years ago.

Watch out also for managers who are jealous, egomaniacs, paranoid or delay sharing information. Remember, directors may become personally liable for the actions of the organization.

When the unthinkable occurs

Most companies actually have very good reasons for conducting the types of activities that got them into trouble. Be flexible, get out in front of the emergency and tell the truth. Explain the facts loud, clear and often. Doing so builds your credibility and creates an image of cooperation and nothing to hide.

Timing is everything when it comes to executing strategy. When crises occur, notify and involve affected audiences before someone else does. In addition, you must show a humane as well as business face, break industry jargon into easy language, take reporters’ calls, name a contact that can answer questions and identify allies.

Unfortunately, the first response of most executives is to go into lockdown. Paranoia trumps reason, causing the CEO to install gatekeepers and managers to keep information close to the vest. This approach usually exacerbates the very crisis it aims to prevent—employees became insecure, the media curious and regulators suspicious. Stonewalling doesn’t work because legal notices, online filings and news stories ensure people will find out.

If you haven’t worked to fill the reservoir of good will over the years, as discussed above, your enemies will be ready—and well-equipped—to pounce. They will tell the media and public you can’t be trusted, your low cost method of addressing a problem is inferior and change is either unacceptable or long overdue. They will use such tactics as questioning the facts repeatedly (leaving the impression you have been unresponsive), magnifying imagined problems, depicting solutions as flawed or untested and employ non-expert “experts” for public hearings and media interviews.

If you’ve always openly communicated, continue to do so now. Issue press releases, buy advertising, go to public meetings, etc. If you do anything differently now, your motives will become suspect.

Since every situation is different, call COCO+CO. at (800) 374-4103 or use the Contact form to discuss your particular need or interest.

 

Economics and conflicts of interests still drive modern advertising

By Tim Coco
President and chief executive officer

This may surprise a few people, but I have always loathed advertising agencies. I don’t mean just competitors—my disdain goes back long before hanging out my company’s shingle—but rather the concept in general.

In fact, COCO+CO. was launched 21 years ago precisely because I knew there was a better way. I even resisted calling COCO+CO. an “advertising agency” because the company’s scope is far broader than placing paid advertisements and it is not an “agent” of others. Unfortunately, classifying the business by another name confuses clients and prospects. Here’s why I hate advertising agencies.

Economics favor agencies over clients

Advertising agencies, as the name implies, began as nothing more than “agents” for the media. They merely sold space in newspapers and, later, time on radio and television. In return they received kickbacks (a/k/a commissions) from the media.

The “father of modern magazine advertising,” James Walter Thompson, began selling display ads in magazines as an employee of William James Carlton in 1868. He bought the company in 1877 and renamed it J. Walter Thompson Co. Since Thompson had to compete against other salespeople and the media themselves, he added the service of writing and illustrating ads to differentiate his firm. What turned out to be even more lucrative was taking the ad and placing it in multiple media and accepting multiple commissions.

COCO+CO. refuses media commissions and works instead on a fair time and materials basis.

Conflicts of interest betray clients

Thompson and others placed ads regardless of whether particular publications were actually a good fit for advertisers or reached prospective customers. As long as the agencies received their kickbacks, they didn’t care whether the advertiser benefitted. This is still true at most agencies. Worse, kickbacks come from many more sources.

When I worked years ago on the client side of a New York City-based conglomerate, I discovered the company’s advertising agency often recommended and placed print advertising in peculiar places. Most of these could not possibly be seen by the company’s prospects and did not further business interests. After pushing and prodding, it became apparent the only benefit was the 17.65 percent commission paid to the ad agency.

Another conflict is so-called “creative contests.” Many graphic designers ignore business goals and instead place the criteria for winning art contests ahead of client goals. More often than not—and studies bear this out—award winning advertisements don’t effectively sell clients’ products and services.

COCO+CO. does not permit its output to be entered into contests unless effectiveness on behalf of clients is the only criteria.

Artificial fragmentation drives up costs, reduces effectiveness

Thompson and others did not typically craft brochures, write press releases or lobby reporters to run free news even if these would prove more beneficial to the companies they claimed to serve. They refused to offer these services because they did not receive the more profitable commissions from their true employers—the media.

Eventually publicists—later known as public relations firms—and even the local job printer picked up the work the advertising agencies refused. Several problems emerged from this artificial fragmentation

First, messages crafted by separate advertising agencies, public relations firms and printers send inconsistent and confusing messages to prospects. Even business logos tended to disproportionately stretch or condense or appear in differing colors as each outside firm made different interpretations. With today’s addition of the World Wide Web, social media, mobile devices, e-newsletters and other means of reaching audiences, the problem has grown exponentially.

As a newspaper reporter early in my career, I observed press releases sent very different messages than print layouts arriving in the adjacent advertising department. As such, I was not surprised when Wang Laboratories collapsed into bankruptcy because it was unclear what the business was trying to sell or the unique benefits of its products. Further, I was amazed—and continue to be—by the absence of public relations people who have actually worked in newsrooms. Journalists not only have a whole array of conventions and rules to follow, they don’t have time to fix non-conforming press releases.

Second, the model of fragmented communication disciplines invariably results in biased advice. Depending on which vendor a business visits, for example, it is invariably steered to the specific products that vendor sells. Not surprisingly, advertising agencies push advertising, public relations firms push press releases, Web vendors push websites and so on.

Third, even those businesses attempting to manage various vendors discover exorbitant costs. This comes from duplicative research and preparation, redundant overhead and the inevitable inefficiency of hand-offs. In-house departments have the additional disadvantages of group think, overbearing egos, lack of resources and proper training and being too close for objective analysis.

COCO+CO. provides the full range of corporate communications services under one roof to ensure necessary consistency and repetition, accountability and focus only on client goals.

Low barriers to entry reduce professionalism

Finally, almost anyone can start an advertising agency. Despite my best efforts, the industry still refuses to require minimum education, experience or professional credentials; enforceable ethical guidelines; or even insurances. This is true on the client side too. Some companies buying Microsoft Office think they can handle the chores themselves.

Of course, the reality is the best computer and software suite can’t make operators good writers, understand the science of persuasion, comprehend how human minds follow and respond to layouts or consider relationships between color models (CMYK, RGB, spot, etc.) and resolutions (lines-per-inch vs. dots-per inch). There are literally thousands of considerations.

Absent industry standards, COCO+CO. has developed a “Resolution of Principles” and “Connections Process,” together governing ethics, education, experience, creativity, strategy, array of disciplines, best practices and accountability.

More than a dozen agencies in the area have opened and closed during the past 20 years. COCO+CO. survives, in part, because it invented today’s modern “integrated” approach by providing all corporate communications services under one roof. As new forms of communication emerge, COCO+CO. has no artificial barriers preventing their timely adoption. This vertical specialization works because the company restricts services to certain industries.

After the World Wide Web became popular and businesses learned about the shady and ubiquitous commission system, they demanded reform. Giant ad agencies, now forced to share their commissions, began claiming an interest in the integrated approach. Rather than actually providing integrated services though, they simply bought other firms and still largely operate them separately. Duplication, inefficiency and conflicts of interest still reign supreme.

To be successful, businesses must simply send relevant messages by vehicles most likely to reach target audiences. Unfortunately, this is neither the advice nor the services businesses receive because of the economic self interests and the conflicts of interests of their advisors. Consider these points when deciding how to take your business to the next level.

By Tim Coco

What does the future hold? Turn around and see.

To think ahead, one must first look back.

The idea behind the founding of COCO+CO. 20 years ago was that all business communications—whether aimed at customers, prospects, employees, neighbors, etc.—should be centralized and carefully coordinated.

This meant advertising, public relations and other marketing efforts would all flow from a client’s goals and then be disseminated by the best available methods to reach target audiences. At the time, these methods included print and broadcast advertising, public and media relations, direct mail and outdoor. Since then, the World Wide Web, mobile and social media have been added to the mix. Tomorrow, there will be something else, but the COCO+CO. approach was designed to be flexible enough to adapt to change.

It is really rather simple. Rather than relying on particular tactics—placing an ad, putting up a Facebook post or what have you—COCO+CO. evaluates what clients are trying to achieve and then selects the most appropriate vehicles (print, online, broadcast, outdoor, etc.) and messages to reach them. Success comes, in part, from the resulting consistency and repetition.

In 2011 audiences flocked to smartphone and mobile devices. Just as it had done during the mid-1990s when the Web became a marketing force, COCO+CO. began developing for this medium. In addition, COCO+CO. strengthened its social media management team—helping clients safely use Facebook, Twitter, etc. while maintaining the “look and feel” of the business. Did your business similarly adapt to changing conditions?

Technology changes, but emotions don’t

Technology evolves in months and years, while human beings require millions of years to change. Happiness, fear, guilt, anger, frustration, insecurity, anger and other emotions exist today in much the same way they have for tens of thousands of years. Keeping this in mind, one realizes imagery and messages will not change even as distribution vehicles do.

In this regard, the current economic downturn has brought many more negative emotions to the surface. Customers are more protective of their budgets and employees fear job losses. For COCO+CO. in 2011, this meant crafting a new brand, Finiracle^SM, to respond to the unique needs of community banks and credit unions in a budget-friendly manner. These include SSAE 16-secure (formerly SAS 70) Web hosting, easy and fast portability for business continuity and disaster recovery, innovative and savvy marketing content and regulatory compliance. Did you shore up your operation by addressing customers’ emotional needs?

Finally, COCO+CO. had to relearn an old lesson—not to take circulation of information for granted. At the beginning of a new client relationship, COCO+CO. provides decision-makers with a comprehensive 22-page “Welcome Kit,” outlining terms, tips, best practices, company philosophy and more. However, over time, clients naturally forget some items or add staff that may be unfamiliar with the document. The Welcome Kit is now routinely redistributed to existing client contacts as well as new contacts as they become known. What steps did you take to avoid misunderstandings with your clients and customers?

To summarize:

• Adhere to your principles. Technological progress and economic conditions should have no impact on your bedrock principles.
• Adapt to change. If your clients and customers desire it, you must deliver it.
• Share your goals. It’s easier to achieve your goals if you share them with your team and customers.
• Remain diligent. Never stop reminding clients and customers what you do and why and how you do it. You are an expert in your field.

Take time now to reflect on the past and prepare for a successful future. Happy New Year!

As this story goes to press, Netflix stock is trading at $74.88 a share — down from this summer’s price of $300 a share. The stock tumble came after the company revealed it has lost 800,000 customers since June. Customer defections came as a result of two bungled marketing decisions: a 60 percent price increase in July and a failed attempt to spin off its DVD-by-mail service.

What makes Netflix’s fall from grace so frightening is the speed of its collapse. It is analogous to a run on a bank. Netflix Chief Executive Reed Hastings has already begun rolling back changes and hopes to lure back customers. Unlike Netflix, however, regulated entities may not have time to make vital course corrections. As of today, 84 banks and 13 credit unions have been closed by regulators during 2011 alone. In any event, few businesses of any type can afford the kind of staggering customer losses facing the video rental giant.

“Too many people think marketing is simply creating clever catch phrases and ‘getting our name out there.’ That’s the fun part, but real marketing requires tedious legwork. They fail to do the research, undertake thoughtful planning or make an emotional connection with audiences,” says COCO+CO. President and Chief Executive Officer Tim Coco. “The Netflix fiasco is the latest example of CEOs and marketers failing to understand customers’ mindsets and executing without a rational plan,” he said.

Netflix, like others, actually has valid reasons for its decisions. Price increases were needed to pay for greater movie and television rights, and streaming videos rather than sending DVDs through the mail is more efficient and convenient. Unfortunately, the company didn’t adequately explain its rationale and then went on to confuse customers and complicate their experiences with separate websites and user accounts.

“It is simply too dangerous not give marketing issues serious consideration at the earliest stages of business decision-making,” Coco says.

Finiracle Special Report

Look at BofA’s debit card fee from two perspectives
Discussion of risk and opportunity should take center stage

(Editor’s Note: Bank of America has since caved in to public pressure on debit card fees—a lesson in itself. However, the principles discussed here remain valid during any future fee discussion. This is not the end of fees—albeit the ones that follow may not be as highly visible.)

Bank of America’s decision last month to charge a flat $5 fee for use of debit cards drew widespread public rebuke. The bank, like many of its peers, claims it needs the extra money to offset reduced retailer swipe fees.

There are two ways to look at the bank’s fee. First, widespread adoption of such fees could force customers to sacrifice the convenience of plastic and return to widespread paper check use. This could actually cause costs to rise at financial institution as more tellers are needed and processing costs rise. Bank of America — and now Wells Fargo, Chase, Regions Financial and SunTrust, among others — may have it right that consumers are willing to pay more for convenience. It is still a risky proposition for community banks and credit unions whose depositors may differ demographically.

Long term market share growth a consideration

On the other hand, community banks and credit unions can trade possibly increased revenues from debit card fees for gains in market share. These institutions though must carefully evaluate the option by looking at Bank of America’s deposit market share at branches in their communities. Outside of major metropolitan market areas, there may not be enough low hanging fruit to capture.

Even if growing market share is possible, the cost of grabbing and servicing that money may not be profitable. Advertising Age’s Jack Neff explains one reason why:

“Five years ago, banks profited even from customers who had modest checking or savings balances, because they could make enough money on the spread between low or no deposit interest rates and loans. But post financial collapse, that’s not really happening.”

Of course, a long term view is required. At some point lending will again increase and the cost of money will be adjusted as the Fed deals with changing realities. Is it worth sacrificing a bit of capital now for a stronger position later? Every situation is different.

A hybrid solution may work at smaller institutions. That is, adopting increased fee structures for one or more unprofitable categories of customers, but keeping those fees modest compared with the large banks. It is also important to keep in mind the large banks are not your only competitors. Another community bank or credit union may not find it worthwhile to draw deposits away from shrinking Bank of America branches, but profitable to take them away from you.

Be careful.

Finiracle is a new national brand of SSAE 16 (formerly SAS 70) website hosting and compliant advertising products for banks and credit unions. Finiracle uniquely coordinates seemingly conflicting compliance efforts, delivering peace of mind and savings. Learn more at www.finiracle.com.

Seemingly conflicting regulations pose headaches for many

If your website contains sensitive customer information, you are required to take steps to ensure data is safe from intrusion. The common standard for meeting this requirement comes from the American Institute of Certified Public Accountants (AICPA).

As of this past June, the AICPA replaced its SAS 70 standard with a Statement on Standards for Attestation Engagements No. 16 (SSAE 16). This governs “Reporting on Controls at a Service Organization.”

“This standard has created mass confusion principally because many organizations are not clear about whether their websites actually contain confidential customer data,” says Tim Coco, president and chief executive officer of COCO+CO., Inc. “The confusion stems from the fact that what many believe is their only website is really a compilation of several websites,” he explains.

Community banks and credit unions, for example, typically outsource online banking to third parties who have responsibility for protecting the data. Similarly, wealth managers might use Charles Schwab’s SchwabSafe^® for online customer transactions. “The log-on to online banking on the non-customer information site is a technological ‘trick,’ if you will, and is equivalent to simply opening another website,” Coco says. Testing only the main site may be inadequate and the results will be misleading.

Non-confidential sites still pose customer risks

Even those websites without customer data, however, are subject to “phishing” and “pharming” attacks. These occur when a hacker obtains control over a website and tricks customers into providing confidential account information such as usernames and passwords.

The Gramm-Leach-Bliley Act, also known as the Financial Services Modernization Act of 1999, requires a number of safeguards to protect non-public personal information. For financial institutions, this means obtaining documentation from website hosts that they have security provisions in place. This documentation is now encompassed in SSAE 16.

The ‘big picture’ illustrates regulatory conflicts

Unfortunately, separate Web hosts usually can’t see the big picture, and regulatory conflicts arise. This occurs when, for example, the technology to secure a website also prevents the same website from being moved and restored in an emergency.

For institutions regulated by the Federal Deposit Insurance Corporation (FDIC) or National Credit Union Administration (NCUA), this disconnect between security and “timely resumption of operations in the event of a disaster” runs afoul of guidelines set down by the Federal Financial Institutions Examination Council (FFIEC).

To learn how COCO+CO. addresses these conflicts, see the story below.

New Finiracle brand helps community banks and credit unions comply with Web, advertising regulations

Finiracle provides executives with regulatory relief.

COCO+CO. Inc. celebrated its 20th anniversary with the launch of Finiracle, a new national brand of SSAE 16 (formerly SAS 70) website hosting and compliant advertising products for banks and credit unions.

Finiracle responds primarily to three pressing needs of smaller institutions — website security and disaster recovery, safe social media management and low cost, yet compliant advertising campaigns, said COCO+CO. President and CEO Tim Coco.

“Community banks and credit unions are tiptoeing through regulatory minefields, and no one is satisfied. Top management rightfully complains of high costs, compliance finds pitfalls both in Internet security and customer messaging, IT is forced into inflexible vendor arrangements and marketing departments sacrifice audience-drawing content and features,” Coco said.

“These institutions played no roles in creating the recent financial crisis, but they are beset by tougher regulations and vendor scare tactics. Finiracle uniquely coordinates seemingly conflicting compliance efforts, delivering peace of mind and savings,” Coco said. He explained, for example, proprietary website hosting runs afoul of business continuity and disaster recovery efforts. “Most vendors’ closed systems serve only to drive up costs while discouraging modern features and inhibiting recovery during an emergency.” By contrast, Finiracle builds on COCO+CO.’s 20 years of financial compliance experience and delivers SSAE 16-secure (formerly SAS 70) Web hosting solutions through license-free technologies. Websites are completely portable and can be quickly reestablished on any common server. Just as important, website content complies with myriad consumer protection and disclosure regulations. All testing and reporting requirements are met at Finiracle’s secure data centers.

Finiracle’s packaged marketing campaigns contain compliant, innovative and savvy marketing content. Besides banners, posters and print advertising materials, interactive multimedia solutions are available.

Security concerns and worries about timely management are also keeping smaller banks and credit unions from enjoying the marketing benefits of social technologies. Finiracle delivers complete reputation management, control over embarrassing posts through full moderation and anti-spam wall post controls. Custom blogs and e-newsletters are also available.

More information is available at www.finiracle.com.

A woman enjoys mobile banking with a COCO+CO. designed mobile Web page.

The next big thing is here and your relationships with customers and prospects are threatened if you don’t embrace it now.

More than one third of American adults already turn to data-enabled smartphones to surf the Web and make transactions. That number continues to grow as consumers replace mobile phones. According to Nielsen research, 55 percent of those who purchased a new phone this past spring purchased a smartphone instead of a feature phone. Users favor online content that better fits their small screens.

“From texting campaigns that enable customers to receive targeted information from brands to m-commerce platforms to help them facilitate their purchases, it is becoming critical for companies to provide the information and access customers want, using the mediums that reach them most effectively,” Susan Blue of FordDirect said, as quoted July 28 by Internet Retailer. FordDirect is a joint venture between Ford Motor Co. and its licensed dealers.

Wealthy, well-educated and younger people want you on the small screen

A Pew Internet Project report issued last month found “59 percent of adults living in a household earning income of $75,000 or more (and) 48 percent of those with a college degree own smartphones.” Pew’s study goes on to report 58 percent of Americans between the ages of 25 and 34 now own a smartphone as do 49 percent of those 18 and 24.

Consumers are most using their mobile devices during the same hours as prime time television. A study by third-party ad server MediaMind found “users surf the mobile web and apps on phones most during the early evening, between 7 p.m. and 9 p.m., and keep usage up through the night,” as reported by Advertising Age last month. “Mobile ad click-through rates are also highest between 7 p.m. and midnight, with clicks reaching a peak at 8 p.m.”

It’s not just about making content ‘smaller’

There is much more to putting up a mobile page than simply making pages smaller, and many traditional Web designers are not up to the task. Traditional Web features such as tables, graphics and video and forms must be coded differently to work on smartphones.

COCO+CO., which has been producing mobile pages since the birth of the new medium, lists just a few of many important specifications:

• Code must automatically recognize consumers’ devices, and automatically deliver properly sized content and features to both PC and phone users
• Pages must be properly integrated to support legacy systems such as existing online banking and database structures
• Designs must be fast loading even with generally slower 3G/4G phone speeds
• Content must automatically stretch, contract and resize on the fly depending on whether the phone is held in portrait or landscape orientations
• HTML 5 must be used in place of Adobe’s Flash since Apple’s iPhones do not support Flash
• Web hosts must be identified that willingly support “workarounds” for mobile device and third-party shortcomings in areas such as the installation of Secure Socket Layer (SSL) certificates

You may optionally choose to provide customers with a custom, downloadable “app,” but you’ll still need a mobile-formatted Web site.

A final reminder

The advent of new technologies doesn’t mean old marketing and corporate communications programs are obsolete. Rather, since people haven’t changed, messages and content still must be audience-centered and make an emotional connection. (For more see “New digital landscape still has rules.”)

Your targets are putting aside personal computers and laptops at home in favor of data-enabled smartphones. You must deliver content that better fits their small screens or risk losing business if your website doesn’t accommodate them.

For more information or learn if you qualify for a free mobile Web site from COCO+CO., call (978) 374-1900 or use the contact form. You may also offer comments below.

Even if you are not gripped with fear, the steps on this page will help you.

You’re not alone if you recently noticed a slowdown in receipts or, perhaps, a drop in new business altogether. Polls show the business community’s confidence in the future economy is dropping. The confusing hyperbole coming out of Washington over raising the debt ceiling is an important factor.

The problem so far is more related to false perceptions than reality. Nevertheless, businesses are responding by opening the corporate wallet less and being tightfisted when they do. The trickle down impact on everyday consumers — the group that actually drives the economy — is striking. Marketers hold the key and must be motivated to act.

“Consumers, businesses and investors remain extremely skittish; spending, hiring and investing freezes up whenever anything goes even slightly wrong. The severity of the Great Recession appears to weigh heavily on the general mood. Policy uncertainty in Washington regarding the federal debt limit and how to address the nation’s daunting fiscal challenges hurts as well,” Mark Zandi, chief economist of Moody’s Analytics, wrote last month. However, he predicts, “Assuming oil (prices) keeps receding and that Washington resolves the debt-ceiling issue, growth should accelerate later this year.”

Free steps C-level leadership must take now

C-level executives need to move beyond fear and instill confidence in their institutions. The impacts on employees, customers, prospects, vendors and the bottom line will be positive.

1. Assemble a goals “wish list.” List those areas where you would like to see growth or improvement — customer retention, prospect conversion, new product revenue, etc. There is no harm and no cost associated with this exercise and it will lift spirits. Feel free to be fanciful since, as broadcast journalist Belva Davis said, “If you can dream it, you can make it so.” Distribute the wish list among department heads and even rank and file employees.
2. Find out what sets you apart. What do you do specifically that is different from your competitors? On the surface, this may seem an easy exercise, but it is probably the most difficult. If your answer is lower prices or best rates, then you should stop reading and work on an exit strategy. Price and rate wars are a race to the bottom and few survive over the long term. Try also not to list generic differentiators such as “personal service” or “community participation.” Instead, focus on a single word that you wish to own in the market. TD Bank, for example, is working toward owning the word, “convenience.”
3. Look at possible strategies. Prioritize the list you created above, consider what sets you apart and map out how you might reach these goals. Again, be fanciful and ask “what if” questions. Put aside your ego or fears of inadequacy and consult department heads, employees and outside advisors. Consider the advice of your more conservative counselors such as lawyers, compliance and internal financial chiefs, but don’t let these folks have veto power. They are doing their jobs by being cautious, but their perspectives are only one element. Few entrepreneurs would succeed if they listened only to those who worry too much about risk and focus too little on reward.
4. Align operations with goals. What operational changes might be required to execute the strategies you’ve considered above? Start from scratch listing the tasks that must be undertaken and organize teams and resources appropriately. For example, when TD Bank decided to own the word “convenience,” it adjusted operations by committing to build more branches and offered extended teller hours. Just because everyone else in your industry organizes departments in a certain way and gives staff members certain titles doesn’t mean you must. Be innovative. What technologies are available to further your efforts? Undoubtedly you’ll discover efficiencies that will pay for the tactics below. Like the steps above, you still haven’t incurred any costs so dream and be creative.
5. Stop throwing spaghetti. Now, look toward those external audiences you are trying to reach — existing customers, prospects, people who influence them and others. Remember local vendors are potential customers too. You must determine where these groups accept information — Web, email, magazines, newspapers, broadcast, smartphones, mailings, outdoor banners, events and billboards, etc. — before you try to send them messages. It costs too much to throw spaghetti against the wall and see where it sticks. Don’t guess where your audiences are obtaining information. Use surveys or consult professionals. Once you know where your targets receive information — and it’s probably a combination of sources — rank them.
6. Develop tactics. Once you know what sets — or will set — you apart, and have ranked where your audiences learn about you and your competitors, development of tactics becomes easier. This last step is where most people begin since it is much more fun to brainstorm and be creative than plan, write and do research. However, it is a waste of time and money if you haven’t followed the preceding steps. Select the media your audiences use and take full advantages of its strengths. As examples, video is best for demonstrations, while the Web and smartphones are best for encouraging two-way interaction. There’s a whole science devoted to tactics, but the best one hasn’t been invented yet. Don’t be a copycat.

Be a team player and share your analysis, ideas and plans with everyone involved with implementing it. Obtaining feedback and making necessary adjustments helps you achieve important buy-in. Whip up enthusiasm among board members and confidently tell them how they can help.

You’ve spent almost nothing to get to this stage so put your worries aside and plan for the future. After this, you may have to spend some of your reserves, but remember you are making an investment in the longevity of your organization.

Compete by setting yourself apart

Community banks, credit unions and other smaller financial concerns are not to blame for the current financial crisis, but are nonetheless suffering from regulatory and public perception consequences. The lessons these organizations are slowly learning may well prove invaluable for all small and micro enterprises.

Conglomerates and their trade groups have managed to hoodwink many unsuspecting businesses into believing that what is good for the supposed noblesse oblige is good for all. All indications, however, suggest the opposite is true. The U.S. Chamber of Commerce and other trade groups have taken positions that bolster the abilities of your competitors to impair your operations. A 2009 study by The Independent Community Bankers of America (ICBA) and Aite Group, LLC, concluded:

“Despite most community banks’ lack of participation in subprime lending, the implications of larger bank activities have begun to trickle down. Of community banks surveyed, 73 percent have seen an increase in their traditionally low loan delinquencies and charge-offs since the start of the crisis. The significant growth in quarterly net charge-offs for the industry is driven primarily by the largest banks.”

Towards a two-tier solution

Tell legislators, customers and prospects certain trade organizations do not represent your concerns. Distancing yourself from the groups that betray your interests is only the beginning of truly achieving market success.

As has been said in this column before, there are only two ways to compete — price or differentiation. It is difficult to beat the conglomerates on price when they have access to superior tax loopholes and the advantages of cheap overseas call centers, software support and manufacturing.

This leaves differentiation. Most local organizations believe their strengths are “personal service” and “community support,” but these messages are often too vague to offer much benefit. These attributes also don’t properly differentiate you from your similarly sized rivals.

Successful marketing doesn’t begin with advertising these differentiators, but rather in identifying them and creating an innovative strategy. You and your in-house colleagues may be too close to your organization to see the multitude of other advantages your organization undoubtedly offers or could offer. Bring in your advertising agency or other outside marketing help early to identify, name, position and promote those products and services that truly set you apart.

If you must purchase pre-packaged or “canned” marketing materials, be sure to negotiate the right to modify and position them in such a way that differentiates you from your competitors using the same offerings.

Finally, while compliance with regulations is of utmost importance, challenge your legal advisors to adopt friendly and easy-to-understand language that separates you from the hucksters.

Manage how others use your brand

You are probably one of the millions who receives daily emails from supposed proponents of Orchard Bank, a purveyor of credit cards from HSBC Bank, also known as Household Bank and myriad other names.

In 2007, the U.S. Federal Trade Commission won a judgment against various groups promoting HSBC cards after charging them with “unfair or deceptive acts or practices.” Then, the issue centered on telemarketing abuses where consumers were tricked into paying from $159 to $236 in advance for cards they did not receive.

Now, it seems a similar scheme may be underway on the Internet.

One Internet domain name associated with these spam attacks is supersavings2010 (dot) info. According to a prominent antivirus company, “McAfee TrustedSource web reputation analysis found potential suspicious behavior on this site which may pose a security risk. Use with caution.” Incidentally, the site’s domain name is registered with Enom, Inc. — a company COCO+CO. blacklisted several years ago because of its unethical link to spammers.

HSBC Holdings plc of London has done little, if anything, to distance itself from these shady practices. The company probably believes it benefits from the millions of illegal email messages containing their logos and marketing materials.

HSBC is not an innocent victim. You may recall the bank was also forced to pay $62.5 million to settle claims for its role in the Bernard L. Madoff Securities LLC Ponzi scheme. Since the U.S. Supreme Court has seen fit to give corporations the same standings as human beings, maybe law enforcement officials should propose the same kind of “three strikes” law that puts repeat offenders out of commission. It would be a sort of corporate death penalty, helping smaller and ethical businesses regain their traditional footings.

COCO+CO. advises client partners and friends to keep tabs on their graphics — especially online — by limiting distribution of certain file types and employing certain security protocols to prevent or deter misuse. For more information, please call or write.