What’s Your Offer?
Chase (as in, the megabank) came up in conversation at my recent family reunion. Two different family members (from different parts of the country) mentioned establishing new Chase relationships. Now, I know what you GonzoBankers must be thinking: Wow, consultants have the most interesting, heartwarming family dinner chat. Just to be clear, I didn’t bring it up. But I was listening. Not even a week later, I received a Chase offer for $450 to open a checking-with-savings ($300 for checking alone). Looking around online, the closest competing offers I found were $300 from a couple of regional banks, but none from community banks or credit unions. I didn’t switch, but Chase did have my attention at $450. I also noticed online that OnDeck was alongside Wells Fargo and Bank of America in the Top 5 search rankings for business loans. OnDeck had slick, “no hurdles” branding on its web site with the promise of a business loan decision in minutes with same-day funding.
Welcome to new marketing muscle. Delivery of specific value is replacing the nebulous brand yarn. Four hundred and fifty dollars to move deposits and same-day business loan funding are concrete offers. Chase and OnDeck have something else in common: By design or not, their brand names imply speed. And, whether speed comes through helpful mobile alerts or fast loan decisions, it is an increasingly powerful definition of convenience.
Meanwhile, on highway billboard ads I’ve seen community banks duke it out over who is the oldest local bank with the happiest customers and employees. Driving through one town, I noticed branch signs from two different banks looking to win your business based solely on their number of anniversaries.
Seriously. Who cares how many years a bank has been gathering and lending money? Even if a few people care, aren’t there others who may prefer a bank that seems, well …. younger? If nothing else, maybe they want a bank that makes a concrete offer?
A quick look at big bank competitors like Chase and industry disruptors like OnDeck shows an unmistakable emphasis on technology and marketing. But, according to recent data gathered for The Cornerstone Performance Report, mid-size bank and credit union tech spending (as a % of assets) has grown incrementally at best.
One big cultural hurdle I’ve heard is that digital channels are thought of for service while branches are thought of for revenue generation. But, that’s starting to change. Consider that in a recent study by CFI Group, online improvements were 400% more impactful to increasing satisfaction than improvements to branch staff or branch convenience. Probably not a surprise to the 75% of the U.S. population now clenching smartphones.
Where’s your offer?
Another interesting trend for mid-size banks and credit unions is a marketing spend mix that hasn’t changed much to reflect a shift in impressions. Traditional media spending remains high while online channel marketing remains pretty low. More in common with the era of Mad Men’s Don Draper than Amazon’s Jeff Bezos or Apple’s Angela Ahrendts.
Now, the good news is there is clearly more emphasis on customer experience (both channel process and employee training). And, lead generation has focused more on analytics. Still, it’s typically pretty light in the online and search areas that increasingly guide consumers.
Digital marketing is now established more than just emerging. Across all industries, digital ad revenues grew past print, outdoor and traditional radio years ago and will surpass those on television in three short years (eMarketer). Beyond Google’s paltry $60 billion in ads growing 17%, here’s some more growth out there:
Marketers are targeting consumers with digital because there is context closest to the buying cycle. And we are hearing some successes with it. One CFO, for example, recently reported 15% of his institution’s mortgage loan originations came directly from Zillow ads. As digital delivery and contact centers become the preferred service entry points, it’s important to understand the value for each channel and at each point in the ongoing engagement cycle: needs analysis, lead development, presentation, closing and fulfillment.
As community financial institutions compete against the Chases and OnDecks of the world, here are some brand questions worth asking in the boardroom:
- Is our offer helpful and meaningful?
- Is our offer reaching our target customers closest to their buying decisions?
- Have we agreed on ways of measuring success and which approaches are working best?
- Do we have the right talent and tools to drive revenue growth using digital?
Lastly, let’s not forget to ask how digital helps (and is helped by) other approaches. It’s probably no accident that my own journey here involved digital but started with traditional word-of-mouth and a direct mail offer.