of everybody, but we’ll do it. It’s very hard to be an employee here and not ask yourself, ‘Am I up for this or not?’ It’s not about getting people stressed. It’s about getting them full of conviction.”
Outside its home base, ING Direct is a master of bold publicity stunts and brash PR moves. To increase its visibility in southern California, the bank paid for free fill-ups at Shell stations in Manhattan Beach, Santa Monica, and Burbank. The lines of cars stretched for miles, and motorists waited for hours—the scenes became a fixture on the TV news. In northern California, Kuhlmann, a motorcycle enthusiast, personally led 700 Harley-Davidson owners on a 60-mile “Freedom Ride,” culminating in an ear-splitting concert by the classic rock group Kansas. In Boston, ING Direct paid for all subway lines on the MBTA (known as the “T” among Bostonians) to be free one morning to rush-hour commuters—a high-profile stunt that the company dubbed the “ING Direct Boston T Party.”
To be sure, the first order of business for ING Direct is about bread-and-butter substance, not bells-and-whistles stunts—creating financial products that make it easy and financially rewarding for customers to save. But just as big a part of its strategy is identifying products it won’t offer. As aggressive as ING Direct has been in its target markets, it has shown just as much restraint in avoiding potentially lucrative markets that are off-target. ING Direct doesn’t issue credit cards, market auto loans, or even provide traditional checking accounts—lines of business that most bankers would launch in a heartbeat if they were in Kuhlmann’s shoes. But those services encourage customers to spend rather than to save, so they’re not part of the model.*
ING Direct has also resisted the temptation to enter online brokerage, an obvious bit of diversification that any self-respecting MBA student would urge the company to embrace. Millions of customers already bank with ING Direct over the Web, so why not let them trade stocks as well? “Because if you are truly committed to helping people change their financial lives, and to doing it step by step, then you should not encourage them to do things that could lead them to lose money,” explains Jim Kelly, the bank’s chief customer service officer, who also oversees marketing, sales, and operations.
That’s instructive: companies that compete on a disruptive point of view are defined as much by the opportunities they choose not to pursue as by the businesses they do enter. Roy Spence remembers the early days of Southwest Airlines, when it faced one of many bare-knuckle challenges to its advocacy mission. In 1981 a start-up called Muse Air, launched by Lamar Muse, a disgruntled cofounder and former CEO of Southwest, mounted an assault on Herb Kelleher and his other onetime colleagues by offering an airline with planes that were sleeker, seats that were roomier, and service that focused on luxury rather than down-home humor. (Industry wags nicknamed Muse’s company Revenge Air.) Southwest was rattled; many executives urged Kelleher to buy his own fleet of new planes, especially when surveys showed that customers, by a huge margin, preferred the Muse aircraft to Southwest’s dowdier planes.8
But Kelleher resisted the temptation—not because he was eager to disappoint customers, but because he was determined to stay true to the airline’s mission. “Everybody was stunned that we didn’t go with this beautiful new plane,” Spence recalls. “But Herb said, ‘If we go with this new plane—and granted, it’s prettier and customers like it better—we’ll have to train our pilots to fly two different kinds of aircraft and train our mechanics to service two different kinds of aircraft. That will increase our costs, which we’ll have to pass on to our customers. We’re not going to do it, because that’s not the purpose of our airline. That’s not how you democratize the skies.’”*
In other words, companies that compete on a distinctive set of ideas are comfortable rejecting opportunities and strategies that more traditional players would rush to embrace. ING Direct even rejects customers that it considers out of sync with its advocacy message. A case in point: Kuhlmann himself turned down a $5 million deposit from one high roller who wanted to do business with the bank. It was nothing personal, the CEO insists, but if ING Direct is building an institution that promotes the financial interests of the little guy, then it doesn’t need to (and shouldn’t) cater to power brokers. “Rich Americans are used to platinum cards, special service,” he says. “The last thing we want in this bank is to have rich people making special demands. We treat everybody the same.”
Indeed, ING Direct is one of the few financial institutions that has no deposit minimums for customers but imposes (unofficially) deposit maximums. You want to start a savings account with one dollar? No problem—ING Direct will even deposit an additional $25 as a welcome-to-the-bank gesture. You want to open a savings account with a million dollars? No thanks. “We are about Main Street, not Wall Street,” explains customer service chief Kelly. “Our most important role is to help people who need help the most save money. People who are going to deposit a million dollars—they don’t need a lot of help. And let’s be realistic. That customer is going to want more from us—‘I’ve got a lot of money in your bank, I need this now.’ They’d expect us to do things for them that we just don’t do. I would much rather have a thousand accounts with one thousand dollars each than one million-dollar account. I can touch more people that way.”
It is an undeniably upside-down strategy for building a bank—placing a premium on customers with less money to deposit than on those with more money to deposit. But it’s a strategy with a clear economic rationale—executing a low-overhead, low-cost, low-margin, high-volume business model. It’s true to the value system that has shaped ING Direct’s identity in the marketplace. It’s a strategy that makes a statement—a point of view that resonates with customers and employees, that changes the conversation about the future of financial services, and that attracts more than its fair share of attention from the media and other commentators.
“Re-creating an industry is about creating a story around customers, around employees, around products,” Kuhlmann says. “Banking is about money, and money is about who you are, how you think about your future, looking out for the ones you love. We are trying to make savings cool. We’re creating a story that carries a sense of mission, a story that shifts people to a new point of view.”
For example, Kuhlmann and his team love to think of themselves as advocates for their customers. But just as Kuhlmann turned down that $5 million deposit, there’s little tolerance for customers who don’t fit the model—whether those customers are Joe Millionaire or Joe Six-Pack. Every year the company “fires” more than 3,500 customers who, one way or another, don’t play by the bank’s rules. Maybe they made too many calls to customer service, maybe they asked for too many exceptions to the bank’s carefully designed procedures, maybe they made big transfers for short periods of time to skim off some interest. Whatever the infraction, ING Direct doesn’t hesitate to close the account and automatically transfer the customer’s funds to its backup bank. (“Our china shop is too fragile for us to let bulls run around,” quips Kelly.)
Firing thousands of customers every year is a controversial business practice, CEO Kuhlmann concedes, which is why he believes it’s good business. “It’s good because it agitates everybody,” he says. “It agitates the marketplace. It agitates the customers who don’t belong. But we want to sort them out. The customers who are right for you, they love you. They become evangelists. The customers who you close out, they hate you. But you know what they do when they hate you? They tell everybody about you—and that’s good. It creates dialogue. There’s nothing like differentiation.”
WHY ME TOO WONT DOSTRATEGY AS ORIGINALITY
There is an undeniable populist strain to the organizations we’ve encountered thus far. For 35 years, Southwest Airlines has pursued a flight plan to recast the economics of travel and “democratize
