supplier profile CC: This question might be of interest to anyone running a business: In this Internet age, customers are
DAVE MOSER PHOTOGRAPHY
24 ;e Costco Connection FEBRUARY 2010 ING Direct has worked iligently to build a trusted brand over the past decade. It’s most visible corporate symbol: the color orange. CC: You take pride in ING Direct acting more like a retailer than a traditional bank. How does a good retailer treat customers? AK: As a retailer, we try not to use “bank” in our name. We try to treat our customers in a way that when they leave us, whether on the phone or on the Internet or one of our cafés, they are happy. We want people to be happy and easily see they got a value deal. The value deal is important because, when it comes to money, people get nervous about whether or not they got the right deal, whether they should have gotten something else or why they paid a fee for something. Being a retailer means making sure that every one of us serves the customer and that we stay connected with our customer base. We’re in a high- volume, low-margin business. You succeed by exe- cuting extremely well and keeping your customer focus through the whole process.
Name: ING Direct
Products at Costco:
ShareBuilder online investing
and ShareBuilder small business 401(k) plans
Comments about Costco:
“I think Costco’s approach
to the marketplace in terms
of efficiency and value and
being straightforward and
transparent is identical to
what we do. I think it’s fair
to say we are like the Costco
of the banking industry.”
CC: Your way of doing business, the Orange Code,
is about 10 years old. Has the recession prompted you to
modify the code at all? Another way of asking the question is: How has the recession changed your company?
AK: It’s somewhat amazing that we haven’t
changed any of our business practices or our culture.
In fact, since we were on the savings platform the
market has come to us. We’ve had nothing to basically change or apologize for. Our conscience has
been clear in terms of being able to look our customers in the face and say we have done right by you.
What the financial crisis has done is put a lot of
constraints on our balance sheet and on our credit
and our profit margin. People are not as creditworthy
as they were before, so we have people with problems
with their mortgages. But our view has been to
aggressively work with people through the problem.
If you can’t stand with your customers in tough times,
I’m not sure your reputation is worth a lot.
CC: Leading people back to savings is more than a
business pitch for ING Direct—it’s a social mandate of
sorts, a cause. Why is an ordinary Joe better off if he
AK: The simple answer is Main Street America,
which says we have to be a little like our grandparents: self-reliant, committed to having a buffer for a
rainy day, able to help our neighbor out. You can’t do
that if you don’t have any reserves. We got away from
those values because we’re very optimistic as a people.
But we need to be more financially conservative
because life is uncertain, and we can’t always rely on
government to solve all our problems. That’s kind of
a heartland America sentiment.
This isn’t to say you can’t live and spend money.
But you must have a reserve, because it’s the best way
to improve the quality of your life. If you want to feel
good about yourself, have a couple of thousand bucks
in a savings account.
CC: The recession blew many people’s retirement
plans out of the water. Give us some advice on what’s
the smartest strategy to recover.
AK: Stick with the monthly program. The worst
thing to do is to approach things by starting and stopping. If you have fixed allocations, stick through it.
You do have to pay some attention to the transaction
accounts. There’s a lot of cost in mutual funds or in
different programs, so you have to know what the
fees are because they can take a bite out of the return.
Also, you should review the plans once or twice
a year to see what your allocation is in terms of international exposure and large-cap exposure, and how
much you want to keep in liquidity. This doesn’t
mean moving accounts around every month, but you
can see where some of the bigger trends are.
You need to be active. Pay yourself first, save a bit
every month, don’t spend beyond your means and be
a little more like our grandparents were.