As best-selling author Malcolm Gladwell explains in his TED Talk below, Moskowitz revolutionized the U.S. food industry in the 1970s by studying consumers’ reactions to 45 different styles of spaghetti sauce. What he discovered was a revelation and something that focus groups had never revealed — a third of the public actually wanted chunky style spaghetti sauce, a product that did not exist at the time. With this information in hand, the Prego brand decided to give consumers what they wanted but had never verbalized. In doing so, they became the market leader.

So, what are your customers craving but don’t know and are unable to tell you?

New York, L.A., Honolulu, Chicago … St. Cloud, Minnesota?

We were as surprised as anyone to discover that ING Direct, the online bank with 7.5 million customers and $82 billion in assets, had one of their famous ING Direct Cafes here in Minnesota — not even in the state’s major metro area, but in university town of St. Cloud. What gives?

A couple of emails and we had an invite to stop by and interview Brian Myres, ING Direct’s head of U.S. sales. So we went on a road trip to meet Brian and tour the cafe. What follows is a paraphrasing of our conversation:

Brian Myres, head of U.S. sales for ING Direct

Brian, what in the world is ING Direct doing in St. Cloud?
St. Cloud is where we have our Midwest Operations center, which houses over 500 people who work in mortgage, deposits and sales. This location was once part of ReliaStar Financial and was acquired by ING in 2000.

That makes sense. But why the Cafe? This isn’t exactly a high-profile location like Manhattan or Chicago.
The cafe is here for the workforce and the community. It allows us give the company a visible presence.

Does it generate sales?
Actually, it does. But that’s not why we have cafes. It’s about bringing the customer experience to life.

What’s available in the cafe?
Coffee, food and merchandise at a reasonable price, free Internet, a reading lounge with magazines and books and a free meeting space for anyone in the community. Our “orange” merchandise, includes clothes, coffee mugs, soccer balls and more.

What’s the catch?
There isn’t one. People have a hard time believing it, but we don’t ask for anything in return. We don’t try to sell. But we will answer any questions they have about ING Direct.

Are the staff able to service accounts?
Absolutely. Most of them are customer service reps who rotate through the cafe. In fact, when they’re not busy, they take customer calls. So, they’re qualified to answer account questions. If someone wants to open an account, they’ll take the customer over to an Internet station and walk them through the process.

What kind of traffic do you get?
This location gets 500 visitors per day. The Chicago cafe, which I also run, gets 800 visitors a day.

Does any of that traffic translate into deposits?
Yes, although that’s not the primary purpose. The Chicago store in particular does a good job generating deposits. We run promotions, for instance going out onto the street and handing out water bottles on hot days. It works great.

This is a cool space. How did you go about designing it?
The guiding principle was bringing the brand to life. However, each cafe is a unique brand experience in the market it exists with the orange and blue as the common theme, along with the merchandise and point-of-sale marketing.

Did you use a retail agency?
We didn’t use any experts. We made our own choices. For example, our logo is an orange ball. We thought, what if we had a big orange ball in the space? So, we put one in — it’s our amphitheatre, where we play financial education media. In Chicago, we created “Orange at Work,” in which people can see phone reps at work. The message is “these are the people you get when you call.”

What about all the products? Do people really want orange ING Direct fleece wear?
You’d be surprised. Many of our customers really identify with the brand. We get some customers who come in and tell us, “I love you guys. You’ve been my bank for years!”

It’s hard to believe that people would get that excited about a bank.
Yeah, but we’re not like other banks. We don’t charge fees. There are no balance minimums. We’re the anti-credit card, anti-debt bank. So, we attract people who are independent and who want to take control.

Big thanks to Brian and the staff at ING Direct Cafe in St. Cloud for taking the time to talk to us.

For more information on ING Direct’s unconventional approach to retail banking, here are some additional resources:

• Photos from our visit to ING Direct Cafe in St. Cloud, Minn.
• Video of ING Direct CEO Arkadi Kulhmann speaking at an Authors @ Google (hint: jump past the long intro to hear Mr. Kuhlmann at 15:00)
• The Orange Code: How ING Direct Succeeded by Being a Rebel with a Cause, by Arkadi Kuhlmann & Bruce Philp
• Finally, below you can watch Arkadi Kulmann’s make a pitch for ING Direct in his own “wiseguy” style. (This spot also plays on the Cafe’s digital signage system.)

Trash cans: an essential part of the Disney experience.

Trash cans: an essential part of the Disney experience.

At his How We Work blog, Peter Bregman writes about how small changes in environment can result in big shifts in behavior. He describes a number of situations where relatively simple changes can transform the dynamics in an office or retail location. He cites the example of client who was contemplating sending a frosty receptionist to communication training. Bregman’s suggestion: why not simply remove the glass window the receptionist sits behind?

“To a larger extent than you probably realize, your environment dictates your actions,” Bregman argues. “In your company, think about what you want people to do and whether the environment around them supports the behavior,” he advises.

Disney has known and practiced this idea for decades. Famously, its “guestologists” solved the one problem that plagues any well-trafficked public space, which is trash. Looking beyond the obvious question of how to clean up the garbage, Disney sought to actually prevent in the first place the problem of guests tossing trash onto the pavement. The solution? A one-two punch of employee vigilance (every employee from top to bottom is charged with immediately disposing of even the smallest bits of trash, which creates a level of cleanliness that discourages guests from littering) and ubiquitous placement of trash cans. In fact, receptacles are placed every 27 feet, which means that guests are never more than a few convenient paces from a receptacle.

The lesson for experience designers (yes, that’s you, if you use your branches to market to customers) is that you have more control over the customer experience than you might imagine. You don’t need to make expensive changes, so long as they’re effective ones.

The key to changing customer experience and behavior is first understanding customer experience and behavior. Not in theory, but in everyday, observable reality. As you take out your notepad and pencil, here are some things to look for:

• Orientation -  How do customers orient themselves when they enter the branch? Where do they look first? What clues help them determine where they should go to fulfill their mission?
• Flow – How does the placement of hardware (desks, counters, signage, etc.) affect traffic flow?
• Proximity – How near or far are the essential tools (check writing station, pens, trash can, calendar, etc.) that customers need at each step of their branch experience?
• Obstruction – What or who hinders customers from fulfilling their mission in the branch? How do customers react to those obstructions?
• Interaction – How, when and where are employees interacting with customers? How do customers react?
• Recovery – What happens when service goes wrong (systems go down, long queues, etc.)? How do customers react? How do employees resolve the situation?
• The unexpected – What happens in the branch, good or bad, that is surprising or unintended? Why does it happen? How could it be discouraged, or (if desirable) encouraged?

Photo credit: mrkathika

• 70% of all purchase decisions are made in store.
• 68% of in-store purchases are impulse buys
• 68% of consumers are brand-switchers.
• Only 5% are loyal to one brand.

These numbers, which come out of a GMA/Deloitte research paper called “The Call for Shopper Marketing,” really bring into question how many retailers allocate their time and money in reaching out to consumers. All this advance effort to sell people on Brand X…and for what? They jump to Brand Z on a whim at the last second.

I’m sure it still makes sense to prime the pump and create awareness about products via online, direct, broadcast, outdoor and print. But with so many decisions — correction — with so many impulsive decisions happening in the aisles, it seems that we are insane not to focus more on the so-called last mile.

Why isn’t there a stampede among creative agencies to develop expertise in this burgeoning field of “shopper marketing?”

Consider two additional statistics, also in the GMA/Deloitte paper:

• Each week, 127 million customers visit Wal-Mart
• Each week, 68 million people on average watch ABC, CBS or NBC evening news.

So, how is Wal-Mart trying to influence all these millions, perhaps billions, of weekly impulse decisions? Of course, there are the usual mainstays of retail merchandising, such as coupon dispensers, end-cap displays and product sampling. Experiential marketing is also getting more play.

But it’s well reported that Wal-Mart and many other retailers are putting their money on digital signage: intelligent networks of in-store flat-panel displays that can be managed to deliver infinitely localized and relevant messages, using variable data such as:

• Time of day
• Day of week
• Seasons an holidays
• Customer language preferences
• Store traffic patterns
• Weather
• Market and economic conditions
• Local news events
• Inventory levels
• Product sales velocity
• Sales goals vs. actuals
• Proximity sensors
• RFID readers
• User inputs (voice, touch, cell-phones, etc.)

Digital signage holds much of the promise that excited many of us marketers in the early days of online marketing, when a collective light bulb went off and marketers realized how data could be harnessed to deliver ever more granular and relevant messages to prospects.

The difference is that digital signage all happens in the store — at the moment of truth, where, according to the research, expensive ad campaigns and brand loyalty initiatives come face to face with disloyal and easily distracted customers. Clearly, whoever has the ability to influence fickle consumers in the aisles will have a tremendous advantage.

Photo credit: Phil Romans