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James Robert Lay: 

Do you know how much emotion plays into the decisions that people make on their financial buying journey? Whether it's a car home checking account credit card, and how might you be able to apply emotive insights to level up loans and deposits at your bank credit and her fintech? Well, let's find out together on today's episode of the banking on digital growth Podcast.

 

Greetings and Hello, I'm James Robert Leigh, and I'd like to welcome you to another episode of the banking on digital growth podcast. Today's episode is part of the exponential insights series. And joining me for today's conversation is Grant Gooding grant is the founder and CEO of proof, a market research company that specializes in measuring emotions to ensure you're saying the right things to the right people. And today, we're going to talk through how you can ensure that you say the right things to the right people so that you level up loans and deposits at your bank at your credit union, or at your fintech. Welcome to the show, Grant. It is great to share time with you today. Good to see you. Thanks for having me on. Absolutely. Before we get into talking about emotional research and how financial brands can say the right things to the right people at the right time. What is good in your world right now, personally, professionally, it is your pick to get started on a positive note.

 

Grant Gooding: 

Well, the holidays are always fun. I got to start I got to start on my shirt yesterday from my four year old she, she's our youngest, and she wanted to come with to work. And I said, she goes What do you do dad? And I said, well go get your Christmas counting book and get a piece of paper. So she wrote. She wrote down like, you know, some numbers. I said write down some numbers. She wrote him down. And then and she said, I did it. And then she I said, Okay, we'll come over and tell me what they what they mean. She said to me, I don't know what they mean. And I said, Well, that's what that does all day at work. So you're gonna fit in perfectly.

 

And she gave me a star. So I got the for doing hard work. So I get to carry a star around my shirt all day, it was great. Oh, you know, you. Anytime we can learn from our kids, I think it's a great experience. In fact, the second book, I'm writing banking on change, I have the dedication, it's to four of our kids, our four kids, and it's, you know, sometimes you're the teacher, other times, you're the student,

 

James Robert Lay: 

There's always a great lesson to be learned through either experience, and my kids have, I've learned so much from them just as much as they probably have learned, hopefully a lot from me. And I think that's the essence of today's conversation. It's learning and you're an emotional market research practitioner, a neuroscience nerd? How is it possible to measure the emotions of of people so that financial brands can say the right things at the right time?

 

Grant Gooding: 

So it's a, I’ll tell you, the short answer is you can't, um, but I'll tell you how we get close. I didn't plan to be any of those things. It's hilarious that I'm describing in such a way. But I didn't intend to do this. It wasn't my life's ambition was an accident. I was a mergers and acquisitions analyst and I had to consume research. Right? So we've all seen it. And it's a stack of papers. And you typically what you do is you go, how the hell am I supposed to turn this into money? Right? And, and that's, I was in the same boat, right? I gotta take two entities and bring them together. And if I don't know, one very important thing, it's very challenging to do that. And that one very important thing is, why are they buying from you? Right? If I can, if I know why someone's buying from entity a and why somebody's buying from entity B, I can, you know, I can I can put those two organizations together in a fairly responsible way and an integration plan. But I don't know, then, you know, which departments do you keep? Which people do you keep? It's understanding why people are buying from you is the best filter to do all of those things. But it was something that we never knew, right? We can tell you the number of customers and what they purchased and how many SKUs and how often and all of that big data information, but there really wasn't a lot of thick data, right? I know, that's a lot of what you all do as well. Wasn't that really thick data to tell us the kind of nuance Well, human by human beings by nuance. And so we knew we needed to figure that out. So we I'll tell you the there's a couple of small series of laws that they kind of got us there. The first thing we did was actually analyzed research, which is a very A nerdy thing to do. And we looked at weighted means analysis and all of the stuff that you do in research and market research, right surveying and and do you know why almost every, every market research methodology in existence, you know why they exist? was to make things easier on the analyst? There you go. That's like, how is that acceptable that what? Why don't we like, who cares? They're the least significant person in the entire equation. Like, why don't we have research that actually mimics how the brain works, the only people that were doing that were were folks at the like academia level in their people up to machines and things that are completely unreasonable in the business market. So we started doing more research on Okay, well, how does the brain work? Right? How could we, you know, like, for instance, the brain works intense, like, numerically. Why? Because we're taught that from the age of two, by the way, I read this very interesting study that, that suggested that the reason that the United States is behind almost all Asian countries is, is because of the teams. Do you know how they count in Asia? Like, they count like 1-234-567-8910 10 110 210 310 4%? Which makes sense because it's 2122 23, right? Well, we invented, we invented 1112, and 13. Like, why the hell do these numbers exist doesn't make any sense. And it takes a long time for the kids to figure that out.

 

James Robert Lay: 

You notice, like, pattern matching?

 

Grant Gooding: 

Right? And we interrupt the pattern. Yeah. And they say it's six months to a year that we lose the ability to process math because of the team's like, it's so bizarre anyway. So we started researching weird stuff like that, trying to figure out how does the brain learn? How can we study things, and we ran across this really cool book called this contest the air. And it's written by a guy named Antonio Damasio, who is now extremely famous for figuring this out. But what he figured out was that the emotive brain, the limbic system of the brain, which is our dumb, dumb brain, is basically responsible for all of our decision making. Then the frontal lobe up here, the neocortex, and the part of our brain that's responsible for like, complex decision making really doesn't really doesn't play as big of a role as people think. And with regard to the decisions we make, and if you look at our species, it makes a whole lot of sense, right? We're not the most like we're pretty irrational species, right? We drink too much we eat too much we do all the things we're not supposed to do. We don't, you know, follow logic and reason when we make decisions, not at all. But we trick ourselves into thinking that it's part Oh, no, we really thought about it. Yeah, but, but the reality is, we completely ignore logic and reason, in almost every decision that we make.

 

James Robert Lay: 

I'm glad you brought the limbic brain up versus the higher order neocortex decision making. And then we also have to keep in mind the, quote, unquote, the reptilian brain, if you will, that the most basic function, when you think about the limbic and feelings and emotions versus say, the higher order neocortex for decision making. Where might that create a bit of friction and gap when it comes to? I'm a bank leader? I'm a credit union leader. This is how I view the world. But I would say you're still probably making decisions. more emotive ly, but maybe just different than someone else? What's your take on that? That perhaps may be a perception gap of the world?

 

Grant Gooding: 

Yeah, so most banks, and really a lot of engineering based types of businesses, it's, and they're only similar because the people that are in those industries are typically deductive reasoners. Now that we know that people are going to ignore all of the thinking that was done anyway, it's a complete waste of time and money. So any brand, especially financial brand, that is using logic and reason, in order to sell something, ie, an APR or some type of mathematical isn't, I mean, you might as well not do anything, right and take that money and just keep it in your bottom line. Because the best case scenario you're getting out of that is a awareness. And maybe B, you're getting a nomadic customer, that's only there because of the APR and will switch the moment someone has a better one.

 

James Robert Lay: 

Hot money, one hot money it's going to come in and it's going to come right particularly in the environment that we're at right now with deposits. And with the Fed holding the rate. Now we're gonna see things go the other way on the saving side. And I think you know, on the homepage of your website, you say opportunity doesn't knock, you have to go find it.

 

What do you mean by that? Why is it important to go find it? Because I think back to your point here, if we're all we're positioning around is great rates and amazing service and all of these commoditize look like laundry list of product features. Were just the same as everyone else. Opportunity doesn't knock, you have to go find it. What does it mean here?

 

Grant Gooding: 

Well, one of the things that that we have found is that there are ways to find opportunity. But it takes a little bit of it takes a little bit of digging. And when when I said earlier that human beings by nuance, we've we found that to be true. In almost every instance, we've we've worked in every industry imaginable. And it seems insulting to say to a bank, hey, if you can make, like, if you can bake someone a cookie, and give them a cookie when they walk in, that's the best thing you can do to retain a customer. And that's insulting to them, right? When you look at it from their perspective, and like, Are you kidding me, you know, how much how much we do and all the things that we you know, how much money and effort we put into all these things and products and systems, you're telling me a cookie is gonna make or break my business?

 

James Robert Lay: 

Do you know how much I know? Do you know what just like that i Yeah.

 

Grant Gooding: 

But you're always that's it. And it's hard to really know that. So it you need to have someone that knows how to go dig through your population and find those nuances. Because it's not just it can be anything really, right, I always say the golden rule of marketing is you don't have to be better than anyone at anything, you just have to be different. And then find some kind of a difference that creates emotional resonance. And when you do that, your world really does get easy. Your strategies get easier, your tactics get easier, just you got to go find them, they're not going to fall in your lap.

 

James Robert Lay: 

It's interesting, because I've run this exercise now over 1000 times with financial brand leaders. And it's it's really a an exercise in human behavior in how we process change in decisions. And this can be applied internally for you know, going through digital transformation, cultural transformation, brand transformation, but it's also the same thing, applying it externally, you know, navigating or guiding someone through a buying journey. And I asked these leaders, I'm like, listen, there are four steps that people go through, they have to see things differently. When you see different you to start to think about things differently. When you see different things different Well, what's gonna happen next. And the financial brand leader will say, Well, I'm gonna, I'm gonna be different, I'm gonna act different, I'm going to do different like, Well, are you really going to do that? I mean, how many how much logic? Do you have that, you know, you need to do something different. But you're, you're failing to make that commitment to take the next step to actually do that thing. And they pause and they ponder, and they're like, Yeah, you're probably right. So I said, we're in agreement that to bridge the gap between thought and action, you have to have something they said yes. What is it? I don't know. So I say it's feeling it's emotion. It's the desire, the feeling the emotion to take those next steps has to be greater than the desire the feeling the emotion to maintain the status quo. How do you how do you navigate that complexity? With back to the point of the way that that financial brand leaders mind works? To dig deeper into the emotive aspect of decision making when it is outside of their normal worldview? because otherwise we end up the future becomes a predictable past Miss based upon the decisions that we're making right here in the present moment informed by past experience.

 

Grant Gooding: 

Well, we're very fear based species. And we will actually tolerate the painful status quo in lieu of looking at a an alternative that might be more beneficial. And you're also talking about an industry that is full of risk averse human beings, right? You don't see a lot of Mavericks in the financial space, especially not your traditional brick and mortar. So you got to realize that, that I'll put up with a I will put up a with a painful status quo and bleed to death slowly, before I will do something that feels uncomfortable. Yeah. And that's just the reality of humans. But you're also talking about people that are at this far into the bell curve when it comes to that tolerance. Sure. But luckily, they liked data. And if I can show them, hey, this, this idea, right, so part of what we do is pretest, everything that they think is relevant, hey, what do you think he's going to move someone, right? And a free checking account ain't gonna cut it. That's a benchmark for that's a benchmark for like, for like commodity. Okay, so what are you going to do? And we test them all the ideas they want, and we test crazy ideas, which are never as crazy as people think. And if I can show them, this actually resonates with people, you should do this and set some reasonable expectations around, this is who it's most likely to work with this is the probability of it working. And if that is enough to convince them that hey, I can make a calculated risk here, then we did our we did our job. But it's not. It's not easy. There are certainly there are certainly easier populations to to get out of status quo than than someone that works in a financial institution to be certain.

 

James Robert Lay: 

Well, I mean, that's a that's a great point. What's a common misconception when we're talking about measuring people's emotions? Or maybe a better way to frame that measuring why people do what they do in a buying journey? What's a common misconception that a financial brand leader might have? That in reality is actually incorrect and can be backed by data? Um, well, let me say that the first thing that is the common misconception where we come in is the word emotion. Most people when you say emotion, you equate it to some variants of emotion, like happiness, or sadness, or fear or Elysian I can measure that. And I wouldn't claim to and I think that anybody says that they can is full of it.

 

Grant Gooding: 

So when you asked me earlier, how can you measure emotion? And I say I can't. The reality is, is that emotions are a cocktail of neurotoxins and things that your brain and hormones your brain releases, and we give those emotions names, and they do various things to our body, right? They create anxiety or, or, you know, all kinds of different types of things, is the common misconception is that we need to somehow create one of these named emotions, when it comes to someone in the buying experience. And that's not really true. All we really need to do is say something that aligns with either the expectation or aligns with the memory system and being able to hit on a belief system of a brain of the brain. So for instance, a good a good example in the financial services space is oh, I'll get it wrong. I'm terrible with acronyms.

 

James Robert Lay: 

Yeah, they're out of San Antonio. I know exactly who you're talking about.

 

Grant Gooding: 

How? Oh, my gosh, I can't believe we're both blanking on it. See, that was toxic. That was me. Like you would have gotten it nine times? Nine times or nine, nine times out of 100. If I would have said anything, but um, well, I mean, they focus on military, right. And this is an obvious example because they're, they're such a big player in the space, but doesn't really have any relevance. Right. Like the fact that someone has a background in the military or they have a family mirror. That as a military experience, that doesn't doesn't have any relevance on banking at all

 

James Robert Lay: 

US USAA your as a, because, because Because Because Because once again, you know my mind, I just had joke astea on the podcast, and she's out of Oklahoma and she just launched you have to have a community bank, but they just launched a NEO bank or a digital first bank called Roger. So that's where when you said military, I'm thinking my mind just went to Roger, but no USAA out of San Antonio.

 

Grant Gooding: 

But all you're really doing is that that entire brand all it really well, first of all, it's a it's a, it's a it's a demand based bank, because it's not inclusionary, which human beings love. So that's the first thing. And the second thing is they're really just connecting to some some importance to that family. And it's a thing, right military families are a thing, it's, it is a deal that you have a connection to we have several team members that that have that come from military families, and it's a part of their lives still, even though they never served. So all they really did was make an emotional connection that aligns with the belief system of the brain. You don't have to make someone feel elated or whatever, you have to just speak to them in a way that is meaningful, hasn't meaningful nuance. And they don't. And banks hate this. Because the reality is, is if you want to do this, well, excuse me, if you wanna do this, well, you have to, you have to understand that it's not going to include everyone, right? You have to be okay shrinking the size of the pie for the end result of winning a greater percentage of that pie full of loyal people. And that's exactly what they have done. And any bank can do it. Right, they just have to figure out what that nuances that they want to go after.

 

James Robert Lay: 

So what you're talking about is something that I've discussed multiple times on this podcast. I have written about it in my book Making on digital growth, the idea of a niche financial brand creates affinity Frost Bank, also out of San Antonio, Texas, they have recently published research called the state of financial belonging. And it's the idea that so many view their relationship with their financial institution, it's transactional. But when you think about some of these niche financial brands that are serving a niche segment, they're creating an affinity that I belong, or I can identify associate to this group of people. Is this what you're tapping into here?

 

Grant Gooding: 

Yeah, and there's a way to, you know, brand theory and economic theory has shown us that this works over and over and over and over again. But you can make it up, like, it can be completely irrelevant. Most of the times we, we carve through a financial institutions existing customer base to find that nuance, because there may be something there that they don't see. Sure. And if if we find something, then we know, hey, you could just say this now, and you're already going to be saying the thing you may have been accidentally saying, right or, or that has been something that is that has come out through the experience of the people that work at your bank, or banks, and it'll make your life really easy. But I mean, you can pick on just something something geographic, when you said frost, I have no idea what that was. But like, let's say that you're up in the northern North, somewhere, you're in the Dakotas or, or Minnesota and you created a bank called like snowdrift bank. Well, snow is a part of that culture, right. And if you say we just want a bank, we're just gonna make a bank that is, it doesn't do anything special. It just talks about snow all the time. And maybe for your giveaways, instead of giving away a toaster, you give away a snowmobile, and really own that idea. And you will get credit customers will gravitate towards that idea. And it's nonsensical. It has nothing to do with the frontal lobe, your interest rates are irrelevant, and like hire people to work in there that loves No, and just own that culture. And people will be shocked at how easy it is to onboard customers. And your customer acquisition costs are easier to get more organic growth, like all the KPIs that you want, at your bank you can get by just understanding that nuance and owning it.

 

James Robert Lay: 

You know, it even goes deeper than that. In this study with Frost Bank, they found that those who feel a sense of financial belonging are 160% more likely to have better financial health. And so it I think it goes deeper. And it doesn't just create value for the bank or the credit union, it also creates an even deeper value for the account holder or for the member. One of the things that we started this conversation and almost now bringing it full circle is applying this knowledge applying this insight because you can have all the data in the world, but unless you distill it down into that insight and action, it really doesn't mean anything. What's a, what's a practical way that a bank or credit union, whether they're the marketing side, the sell side, the leadership side? How can they apply? The insights gained from what we've been talking about today?

 

Grant Gooding: 

Well, the the I'll tell you, there's not any easy? Well, the answer is easy. The application is not. So here's a couple of thoughts. The first thing is that one of the outputs of that study you're referring to, is that improve someone's financial, their financial disposition, right, whatever that is. That is in every bank chart. Right? Like, it's not like, you know, some bankers, like we don't care, right, they all will say that that is significant. And they'll read that study, and they'll say belonging, that's good. Let's say that. So they will like verbatim use the word like, you know, financial, belonging, or whatever, but they don't really know what it means. Sure, right? They're not encapsulating the idea that, well, in order to do that, you have to be a center of gravity for someone to belong to. And if you can't create that, then all the words in the world aren't gonna matter. Especially in banking, because it's is absolutely like, look, we we have a very sort of unique non macroeconomic way that we measure commoditization banks now, specifically, like deposit account banks, banking, personal banking is the most commoditized industry we have measured to date out of over 500 studies. So it is not an easy place to be successful. But really, the thing that they should embrace is, once you figure out the thing, like what is the thing, right? Or you are? Or is it restaurants? Is it? Is it snow? Is it whatever the thing is that you need to grab on to and you want to be known for, you have to own it and be authentic. So you need to hire for it, you need to have events, right. And the problem that banks have is that they're their net, to catch fish is so big, they can't even lift it. So no matter if you throw in the water at all, because if someone says, Well, you need to really go to events and be authentic. It's like what events, all of that all events you need. We want to be involved in the community, which every say, every every credit union as well. And they do a lot of good. But like, does it turn into revenue? Most of the time? Not at all. So you need to if once you find your thing, your life gets really easy, right? If it's if it's restaurants, well, what events do you go to? Well, now, you know, right? And when you go in, you're going to bank, the restaurant and your and your your goal is to bank all of the employees as well. Well, the types of education that you want to put out as a financial institution are really obvious, you know, that they're working on tips. And here are the three things you need to know to build financial, you know, strength based on the way that you are compensated. But you can't do that, and go and sell to engineers. Right? It's two completely different worlds. So that's the, that's the problem with execution is the bank that most institutions are unwilling to figure out who they are. And then even if they do, they're unwilling to, like own it, because there'll be so painful for them, because it's like, oh, my gosh, we're gonna lose all of our engineer. And that's the problem is that fear of loss and that status quo.

 

James Robert Lay: 

That's a great point. It's, it's, there's a perception that if we just focus, our effort, our energy, our time, our attention, our resources on this one particular market segment, and we're saying no to everyone else, we're going to go out of business because of that. And I would actually kind of argue the exact opposite. I think you would probably thrive. When you have it takes courage and you know, what is courage? It's having wet pants and still taking a step forward. Knowing that, you know, it's making a decision making a commitment to do the hard things. And there are some financial brands like Joe Castillo, she's one of them, that they have launched this niche organization and No, Nimbus who I sit on their advisory board, they're doing a lot and helping community institutions, find the niches and build brands for those specific niches. So it's a work in progress, I definitely see we're making strides in that direction at a macro level. But there's definitely a lot of work to do. As we start to wrap up here. I like to send someone who is watching or someone who is listening for the very practical, next best step that they can take on their own journey. Thinking about everything that we've talked about here around emotion and decision making, what would be one small thing that they can do today, right now to begin to make some forward momentum on their own journey of growth.

 

Grant Gooding: 

So here's a little exercise that can be fun. Write down the five things that you say to get people to pay you money. Right, these can be the actual marketing messages, or the things that you say, when you're having an interpersonal conversation with someone write down the five things that you think are most significant. Now, one of those is in first place, meaning one of those things that you say is going to have more emotional resonance than the other four, which means mathematically, four of those things are most likely losing your money relative to the thing that is most likely to work. So cross out the four things that you think, are not going to be as effective as the one remaining. So which one is in first place, it's a, it's a lot harder than people think, first of all, just to come up with the five messages. And it's a lot harder to eliminate things because it'll help you second get you like, it'd be second guessing. Boy, that's a thing. That might be really, it's really important. But the reality is, it probably isn't. The four things that you're going to cross out are most likely, the things that are important to you, that no one gives a crap about.

 

James Robert Lay: 

That right there. And that is your past, being an anchor, where the opportunity is to really continue to focus on the future, the future self, where's the opportunity, not from your perspective, but putting, it's the idea of empathy, putting yourself in the hearts and minds of others, and letting them guide that narrative. They're gonna tell you, and I think, you know, that's why we have two ears and one mouth, just that we just go all in, we go all in, we ask really good questions. We Be quiet, and we listen to what people have to say. And then we can also reinforce that through learning with observation, are really ways to take what you're sharing here, Grant and, and continue to even level that up. This has been such a great conversation, thank you for your perspective, for your knowledge, for your expertise to help others who are watching and listening. If they want to connect with you, and perhaps continue the discussion that we've started here today, what's the best way for them to reach out and say hello to you.

 

Grant Gooding: 

Um, our company is called Proof positioning. But if you Google my name, Grant coding, luckily, it's a bizarre name. So if you Google Grants go down, you're gonna find a lot of me and one very talented swimmer in Indiana. And I'm not him. So I'm the non swimmer. But happy to do that. And look at your next book. I have a few copies, we're going to send those out to to our clients that are more open minded on the on the financial side. So love the work you're doing appreciate you having me on.

 

James Robert Lay 

Well, I appreciate that. And I appreciate you. Google grant Gooding. He's not the swimmer connect with Grant learn with Grant growth grant grant. Thanks so much for joining me for another episode of the banking on digital growth podcast. This has been a lot of fun today, buddy. I appreciate you. Thanks. As always, and until next time, be well. Do good. Be the light

 

Brief Summary of Episode #361

Emotional triggers > rational analysis.

Selling financial products based on logical aspects (like APR) is not as effective as we might think.

Understanding the emotional triggers can help financial brands and fintechs craft messages that resonate deeply with their target audience, moving beyond the commoditized offers of rates and features.

Grant Gooding, founder and CEO of Proof Positioning, emphasizes that financial decisions are driven by the limbic system, our "dumb dumb brain," which overrides logical reasoning. This insight is revolutionary for the financial industry, where decisions are traditionally data-driven and logical.

Find your niche and speak directly to it. The power lies not in being everything to everyone but in being something special to someone.

Start by identifying the core emotional needs and values of your target segment. What do they truly care about? What makes them feel understood and valued?

Then, align your messaging, products, and services to meet those emotional needs.

The goal isn't to manipulate but to connect authentically and provide real value.

The financial brands and fintechs that understand and address the emotional journey of their customers will lead the way.

 

Key Insights and Takeaways

  • Understanding consumer behavior through neuroscience and research. (3:03)
  • Decision-making and marketing strategies in the financial industry. (7:06)
  • Emotional connections in financial branding. (16:55)