Bank Marketing Opportunity
Posted on August 12, 2009
It’s a great time to be a bank in the US right now. Sure, the increasing Federal regulation and decreased lending activity has changed the profitability profile for most banks, but it has also created an opportunity for smart banks to create an enduring brand. Let me explain.
With the exception of their “party like its 1999” lending practices of a couple years ago, banks have generally been conservative in their marketing approach, often using 1980’s interruption tactics such as repetitive TV commercials, telemarketing, statement stuffers, and direct mail. This is largely because a majority of their senior leadership got their corporate training in the 1980’s and they’ve seemingly hung onto to what works — except one thing, this stuff doesn’t work anymore. With the current bank failures, re-organizations, and general fear in the market — the national banks appear to being continuing their practices of interrupting people while the regional banks are cutting their under-funded marketing efforts even more. I can hear Seth Godin, Mark Stevens, and Dave Evans cringe as another VP of Marketing at a bank somewhere approves another ad buy for boring commercial touting their bank as trustworthy and focused on customer service — as if other banks don’t strive for the same? Let’s face it — bank marketing is viewed by some as an oxymoron.
Nearly a decade ago I was asked during an interview for a financial publication what the key challenge would be for banks and financial institutions that were facing new competition from agile firms such as Schwab (brokerage), eTrade (online trading), credit unions, online lenders, etc. I replied “putting a face on their brand” — specifically, ditching the stodgy practices of indifference and learning how to connect/engage/retain customers in an authentic relationship. In other words, exchange the Brooks Brothers suit for a comfortable pair of Levi’s and make people feel welcome/comfortable. That was 2000 and so now on the eve of moving into a new decade of 2010 — banks have an opportunity to respond to a different threat: economic uncertainty.
Consumers are looking for brand(s) to emerge and “hold their hand” through these troubled times. The economic turmoil of the past year has many consumers confused as to which banks are financially healthy, which are lending (residential or commercial), changes in loan qualification requirements, and other factors. This time around, we have social media tools and a widespread acceptance of peer-to-peer sharing that didn’t exist in 2000. The tools and access to customers have never been better or cheaper (compare the cost of deploying Jive Software vs. a $2MM ad buy). So the question is — will bank marketers embrace the opportunity to trade their interruption marketing for CRM-driven permission marketing, or will they continue to “market to the herd?”
I believe this is a great time to be a bank, as smart banks can leverage fear and uncertainty by reaching out and connecting with customers, providing tools (workshops, web app’s, advice, peer networks, feedback, etc.) to “put a face on their brand” and to court customers in a whole new way. However, this will require a new way of thinking — which may require (like the auto industry) some wholesale staffing changes at the senior levels.
Will we see innovation in bank marketing? Time will tell.