My experience at U.S. Bank as the CMO for the Payments Group (and also concurrently as the CIO of this group), landed an assignment from one of our Vice-Chairs to develop a business plan for transportation payments. As one of the largest merchant credit card processors and with 170 Fortune 500 clients who used our purchasing card and our travel card, some of our logistics clients inquired about using credit cards to pay for freight payments. That turned us onto what then was a $400B a year market.
How do freight carriers accept credit cards? Not easily, but the concept was sound, and the technology for payment processing was there…we realized we needed a new front-end to capture transactions. Enter the Defense Logistics Agency (DLA), which had a charter to develop e-commerce systems to improve government processes. We pitched our idea to them as a 12-page PowerPoint deck, and they immediately (and literally) stood up and said: “If you build that, we’ll be your first customer.” It’s always great to have a lead customer, especially one who invented the logistics concept.
Working with DLA, who refined our requirements, functionality, and interface. In one year, we build a complete end-to-end internet-based system for processing of freight/transportation payments. And we survived a National Security Agency test for security, too.
DLA brought their weight via an exclusive sole source contract with us. That made major carriers join the network. The benefits were clear and substantial for shippers, carriers, and for U.S. Bank too. When you think about win-win, you also should think about win-win-win!
After four years of operation, the system was processing over $6.5B of freight payments, and today (as U.S. Bank Freight Payments) processes north of $20B in annual sales.
Among all the opportunities I have had to understand just how practical guidance is needed by customers, one experience in London cemented my understanding. While facilitating a group of compliance executives from major international banks, they kept asking for more support from us even though they had sizeable compliance staffs. I kept asking why, and they said: “You’re the expert; we trust you.”
Perhaps now you understand why I named my business The Practical CMO!