Being a bank marketing officer today is like standing on a shooting range with a target Scotch-taped to your chest. You’re constantly under attack:
- The CEO is not thinking about marketing – he’s thinking about survival – he’s on your back because new customer acquisition is flat and deposits are too expensive;
- The CEO thinks your budget should be “pared back” because earnings are in the tank and you can’t measure how effective your media expenditures are;
- The lenders have stiffened their underwriting standards four times since last November and they’re not approving new credits, even when you can get customers through the door;
- The federal lawmakers, as well as the national and local press, have had a field day bashing banks – but they still want the campaign and PAC contributions;
- Deposits are getting harder to come by and big competitors are using TARP money to rebrand themselves and dominate the airwaves – mira “Ally Bank.”
I could go on.
What separates the Gonzo from the Nonzo? Here are a few things worth thinking about. The following list may strike you as simple – stuff everyone already knows – but I have to tell you from my experience there is a lot of gap between knowing and doing.
1. Believe in yourself
“Everyone’s a marketer,” right? Gonzo marketers have thick skin – and they constantly have to make judgment calls. Retail wants to hand out free “creams and lotions” at the local Wine and Cheese Festival. The CEO wants you to sell four services to every borrower that got their loans through a car dealer. Outside consultants want to see your ROI analysis and cost per new customer from your last checking campaign.
How do you get thick skin? By doing the right things and letting the chips fall where they may. While you do need to know what your CEO is thinking, it’s OK to politely downplay the constant flow of “friendly advice” from your colleagues. Make sure you know what’s important, and don’t let yourself get defensive or derailed.
2. Think about strategy before you think about execution
To any marketer, developing the basic market positioning strategy is the key to selling any product or service. Jack Trout in Trout on Strategy (McGraw-Hill, 2004) defines strategy as “what makes you unique, and what is the best way to put that difference into the minds of your customers and prospects.”
- You have to know what makes the bank unique, especially in today’s commoditized world. No one can tell you why you are better than the competition – you have to either know it or develop it. Chances are you know but you may not have invested enough time or money reinforcing the bank’s strengths in the minds of customers and prospects.
- Talk to customers on a regular basis – they will tell you what’s important to them. Customer-facing employees will tell you what they are asking for.
3. Know what makes the bank money
This is a big one. Profitable customers make the bank money; unprofitable customers cost money. The Gonzo marketer is the leading proponent for accurate profitability reporting in the organization and initiatives to build profitable customer relationships.
If you don’t have the software and the data to understand product and customer profitability, you’re going into the battle unarmed. You can spend considerable money attracting customers that will never be profitable. Understand the characteristics and product mix of a profitable customer and focus your time and resources there.
- Make sure your profitability analysis includes channel transaction data and costs as well as actual fee income at the account level. Average fed functional account costs and fee income averages are not good enough.
- If you are not an MCIF expert, become one. You have to know how to effectively identify and target profitable customer segments. You can delegate this, but you have to understand it.
- Don’t spend money attracting customers that will use only one delivery channel and may clog your branches with small transactions. Target customers that will bring you their core banking relationship: checking with debit, credit card, mortgage loans and investment accounts.
- Study asset-liability management and pricing methodologies and become a leader in helping management make the right pricing decisions. You want to maximize loan yield and fee income and minimize funding and operational costs.
- Don’t train your customers to expect the best price – it may not be the most important thing to them. Find out what is important to them and become their advocate.
4. Know what saves the bank money
- Use pricing and advanced Web functionality to migrate retail transactions, new accounts and borrowing to the Web, including fulfillment. Leave the branch personnel free to develop commercial relationships.
- Know as much about CRM tools and how they work as anyone in the bank. This includes developing cross-selling models and event-based sales prompts delivered to the screens of customer-facing personnel. If it has to do with the sales process, you need to be in the lead, both by making sure branch and phone sales people are making the right pitch, and by making sure the process is automated and integrated into the CRM infrastructure to optimize customer face time.
- Use good business practices in dealing with your vendors. Make sure you get the most from outside creative services. Get competitive bids on services like printing, statement production, mailing, etc.
- Look for opportunities to make money and save money at the same time. Rewards Checking is a good example of reinforcing customer behavior that reduces transaction costs.
- Become an expert in finding low-cost marketing channels.
5. Know when to go on the attack
This one is easy. Go on the attack and stay on the attack – never back off when it comes to getting your message out. Many mid-size to larger institutions in your market are in a holding pattern, concentrating on liquidity and capital. Now may be a good time to attack.
- Big bank retail customers may be looking for a more friendly local face – make sure your branding message is out there. Commercial customers are just looking for consistency in financing – not on-again-off-again service.
- Make sure your existing customers know you care about them and want their business.
- Don’t cut back on key community investments just because times are tough. If anything, increase them – trust within the community has to be maintained, and in some markets rebuilt. This is critical.
Remember the Gonzo marketer’s creed:
“I am the gatekeeper of my own destiny …
I will have my glory day in the hot sun”
Hasta luego y buena suerte, bancarios gonzos.
Think about strategy before you
think about execution.
At Cornerstone Advisors, that’s our creed, and a long list of satisfied clients understand it’s how we do business.
We can help your institution with best practices, process improvement, strategic planning, technology planning, system selection, conversion management, risk management, mergers – and more.
But we’ll never start the execution without the strategic justification.