Innovation
Ahead of the Curve
Arkadi Kuhlmann
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What if the Idea Had a Name?
ING DIRECT was born in an age of broken promises.
If we were going to earn people’s trust, we had to do it by turning our backs on
what marketing had become.
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What if We Started Over?
When you’re trying to re-invent something, nothing can be sacred.
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Banking or Retailing?
“Do not go where the path may lead; go instead where there is no path and leave a trail”
- Ralph Waldo Emerson
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How Do We Innovate?
What are we doing?
Leading Americans Back to Saving
How we do it?
We Simplify Financial Products
Our Brand Promise
Save Your Money TM
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Value Based Differentiation
Customer
Advocacy
Brand
Experience
Competitive
Advantage
Cost Efficient
Operational Excellence
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Employee
Engagement
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Traditional
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Short Term Focus
Rules Driven
Supply Focused
Follow Best Practice
Industry Models
“Hire for Skill”
Hide Behind Bundled
Offers
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Disruptors
Stimulus
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Long Term Focus
Behavior Driven
Leapfrog Standards
Demand Focused
Retail Model
“Hire for Attitude”
Transparent
Standalone Value
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Make Money
Multiple Products
Out-source Work
Back-end Focused
Serve Everyone
Rigid & Hierarchical
Organization Structure
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Sustained Innovation
Execution
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Build a Franchise
Few High Value
Products for Select
Customers
In-house Work
Front-end Focused
Marketing & IT
Drive Company
Nimble & Adaptive
Organization Structure
M&A Focused
Driven by Financial Targets
Innovate Once
Maintain Status Quo
Opportunistic Growth in
Disjointed Areas
React to Technological
Changes
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Strong Organic Growth
Stable Profits
Constant Innovation
No Entitlement Culture
Strategic Growth in
New & Selected Areas
Exploit Technological
Opportunities
United by a Cause
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What if Everyone Could Win?
That was the impossible question that gave birth to this idea called ING DIRECT.
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Building a Track Record – Consumers Love a Winner
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# 1 Direct Bank
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# 1 Savings Bank
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# 9 Bank
(residential mortgages)
President Obama Inauguration Event, Delaware Office
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#15 Bank (domestic deposits)
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#19 Bank (assets)
Minnesota Café
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7.6M Customers
►
8 Cafes
St. Cloud
New York Café
Seattle
Source: FDIC Q3’09
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Innovate Products
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Savings
Interest Checking
Mortgages
Investment
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Innovate Every Moment of Truth
• 2,933
Cups of coffee served
• 4,443
Café customers
• 3,181
New OSA accounts
• 1,256
New customers
• 93,000
Sharebuilder log ins
• 3,000,000
People watching our TV ads
• 360,791
Cross-Sell Emails
• 454,548
Acquisition Emails
• 1,716
Website Password Recovery
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• 3,989
• 10,134
EO ATM transactions
• 36,474
Customer calls
• 6,500
Purchases using EO
• 9,179
Customer calls answered in 20 seconds
• 16,363
Billpay transactions
• 11,912
Clicks on our web banners
• 304,228
ShareBuilder trades
• 104,279
Customer web logins
• $4,523,193
Web transactions
• 60,000
Interest paid
• $43,000,000
ACH pushes
• 149,000
Gross mortgages funded
• $47,253,000
ACH pulls
• 690
Net deposits inflow
• 955
Emails received from customers
• 2,405
Sharebuilder Mobile Views
New Sharebuilder Accounts
• 7,120
Web Impressions on WeTheSavers.com
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Branding
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Engaging Messages
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Continuous Innovation Rewarded
Once Golden Boys
Soul Searchers
Disruptors
Palm
Southwest
Apple
Source: Yahoo Finance
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Palm
Kodak
Xerox
Yahoo
AOL
Chrysler
Ford
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Southwest
Microsoft
Starbucks
Borders
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Apple
3M
Google
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Marketing
TM
Savings promotion on Black Friday
Experience marketing in Manhattan with live promoters
Orange Brand Driver campaign
Marketing campaign on Hulu.com
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Keep Your Customers Connected
You Tube
Websites our Customers Visit
FaceBook
None, 30%
Facebook,
61%
Others, 3%
Twitter, 9%
Hulu
Twitter
MySpace, 11%
LinkedIn, 31%
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Customers’ Vote of Confidence
Delivering on Brand Promise
Wins Returning Business
Planning to increase balance
with ING DIRECT
Satisfaction with
ING DIRECT
Thinks ING DIRECT is
overall better than others
Ease of becoming customer
of ING DIRECT
Thinks ING DIRECT website
better than others
91%
9 out of 10
82%
9 out of 10
75%
Deposit Balance Growth
(% of Year 1 Opening Balance)
180%
7.6% Average
Balance CAGR
160%
140%
120%
100%
80%
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8
Length of Customer Relationship
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What if We Gave Something Back?
This has never been just a business. It’s a cause.
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ING DIRECT is Customers and Their Communities…
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We, the Savers
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New Normal
10%
10.0%
8%
8.0%
6%
6.0%
4%
4.0%
2%
2.0%
0%
1990
0.0%
Dec-85 Dec-88 Dec-91 Dec-94 Dec-97 Dec-00 Dec-03 Dec-06 Dec-09
1995
2000
2005
Savings Rate
2010
3mth Treasury
Unemployment
► Price conscious consumers
► Higher natural unemployment
► Growing federal deficit & public debt
► Threats of inflation/ stagflation
So who will win ?
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Think Greenfield
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Re-engineer
Supply-driven Innovation
Demand-driven Innovation
Financial services’ need for profit
Consumers’ need for value
Innovate
The Customer
The Process
The Product
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What if We Aren’t Finished?
There is always going to be a better way to do this.
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Road to Happiness
Lessons from Innovation
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Build Innovation-centered Culture:
Hire for Attitude and Reward Failure
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Create Cycles of Creative Destruction:
You will Never be Finished!
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An Inventor’s Kryptonite:
Financial Planning and Marginal Optimization
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Be Demand-side Driven:
Avoid Supply-driven Thinking
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Facing the Brutal Truth:
An Organization’s Capabilities Define its Deficiencies
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Markets that Don’t Exist Cannot be Analyzed
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Outside Forces Control Allocation of Your Internal Resources:
Align Them!
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