BankMarketingCenter

Since the very beginning of community banking, these home-grown institutions have enjoyed a distinct advantage over a vast number of financial institutions. Historically, community bank customers have lived near their branch locations and felt a strong personal connection to the bank and its brand. Not anymore.

How financial institutions rely on brand value

Like any product or service category, bank brands rely on brand loyalty; now more than ever. Today, choosing a bank seems hardly different from walking down a supermarket aisle and choosing a cereal, toothpaste, or detergent. As far as banks go, there’s little to no difference between the products nor the ingredients that go into them. The one viable difference between them though, is feeling. This feeling is what drives brand loyalty, and it’s all made made possible by branding. 

Why branding is particularly challenging in 2022

For starters, technology has all but eliminated the word “community” from “community bank.” Cultivating an attractive brand experience was easy back in the days when that brand experience was almost exclusively in-branch. Those days are gone, but thanks to technology, banking customers not only enjoy a greater number of choices, but the expectations now rest on the banks for a better and more personalized customer experience. 

More Choices

More choices, of course, are the result of increased mobility and online banking, where the customer is no longer limited to the institutions nearest them. Mobile apps for financial products and services are going live almost weekly and are extremely attractive to time-pressed customers who can research options with little to no effort. Everything they need is readily available and it’s easier than ever to select a bank without ever stepping into a branch. 

Greater Expectations

With this increased mobility thanks to online banking, brand loyalty has taken on a greater importance, as well as a greater challenge, for many community banks; a challenge that was intensified by the 2020 pandemic and persists today. Due to the drastic improvement and application of technological features and functionality, driven by machine learning and AI and apparent in other sectors such as healthcare (i.e. telemedicine and online appointment scheduling), customers now have heightened expectations when it comes to personalized service. 

Address them both with a more personalized experience

Jill Castilla, CEO of Citizens Bank of Edmond, OK, had this to say last July in How Community Banks Can Stay Relevant in the Face of a Digital Assault. Consumer banks must “strive to maintain a personal touch with those they serve,” she said. “As a community bank, we know our customers and make ourselves available when they need us,” she says. “One of our values at Citizens is to be authentic and accessible.”  During the pandemic, she recalls the community suffering. “We could truly empathize with our neighbors and respond quickly to assist them in challenging times. This kind of response just doesn’t happen at the larger banks. Our customers trust us to have their best interest in mind.”

That “best interest” is the feeling we talked about earlier, the one you might get from an otherwise just-like-every-other product in the detergent aisle. Some call it a brand pillar, which we can perhaps talk about in a later blog. For now, suffice to say that it’s one of the aspects of your brand that, potentially, sets you apart from that sea of competitors. And it’s much more than just a personalized digital banking experience. It’s a personalized experience across every channel.

“Don’t change that channel!”  Well, perhaps you should.

First came multichannel marketing, then, omnichannel. What’s the difference? The multichannel approach focused on sharing a brand's message with customers across multiple channels, or media, with the goal of a customer call-to-action. An omnichannel approach had a slightly different goal, one to create a more personalized message by using data to better understand the consumer and integrating all of the channels to communicate the message. Now, there’s microchannel.

The microchannel approach to building a brand takes omnichannel a step further by slicing consumer touch points into smaller pieces... micro pieces. In the ever-evolving digital world, in order to truly communicate your brand effectively demands a focus on creating an experience “fabric”, one that enables you to meet the consumer wherever they are. With this fabric, you can create a cohesive experience across all of your brand touch points; from community events and traditional media such as print and broadcast to web presence and social media. Using data and analytics, you can make this fabric seamless, so that the consumer moves through the journey without interruption; there’s no “starting over.” Think of microchannel marketing as the digital doors through which the consumer can enter and experience your brand.

If you’re thinking of branding and a personalized banking experience only in terms of online services and mobile apps, you’re missing the bigger picture. Today’s technology can, yes, create a feeling of alienation. But, utilized properly, it can also build connections and relationships. That’s what community banks must continue to do, especially when they can no longer rely on building those relationships in traditional ways.

About Bank Marketing Center

Here at BankMarketingCenter.com, our goal is to help you with that vital, topical, and compelling communication with customers; messaging that will help you build trust, relationships, and revenue. In short, build your brand. To view our campaigns, both print and digital, visit BankMarketingCenter.com. Or, you can contact me directly by phone at 678-528-6688 or email at nreynolds@bankmarketingcenter.com. As always, I would love to hear your thoughts on this subject.

Ad agency folks are famous for their metaphors. When we came up with a campaign idea, for instance, and were curious to know whether it would pass muster or not, we’d say, “lets run it up the flagpole and see who salutes it,” or “we’ll put it out on the stoop and see if the cat licks it up.” When we were working on a campaign and felt that, from a strategic point of view, our messaging was not being directed to the appropriate target audience, we’d call that “shooting at ducks that aren’t really there.”

I just recently saw some statistics around financial industry marketing budgets. Now, I guess I’m reminiscing a bit because any mention of “budget” brings me back to those ad agency days, when your survival hinged on a client’s budget. Every one of us assigned to the account was either working or worrying; working to grow the brand or worrying that the client might find a reason to cut their budget. We never lost a client to another agency, but I remember the host of downturns that sent shockwaves through the agencies where I worked. As soon as the client got a whiff of an economic slowdown, the marketing budget was always the first to go and with it, the agency personnel who worked on that account. (Often, unfortunately, it included agency personnel who WEREN'T working on that account, which was even more frightening.) When the economy turned around, we were always the last to see the benefit of the rebound. I suppose it was because clients tended to feel a bit “once bitten twice shy”. They wanted to be certain, before recommitting to the agency and spending more money, that the recovery was real and long lasting.  We’re in one of those downturns right now, and we’re seeing the same response: Reduced spending on marketing.

The Gartner CMO Spend Survey 2021-2022 revealed that the cuts in the financial industry are pretty dramatic; “marketing budgets as a percent of overall company revenue dropped to their lowest levels in history — to 6% in 2021 from 11% in 2020. Despite facing in-year budget cuts in 2020 due to the pandemic,” says the survey, “most CMOs expected budgets to bounce back in 2021. This budgetary optimism was misplaced, as marketing budgets have fallen to their lowest level in the history of the survey.” Forbes says that “these findings reflect not only an ongoing downward pressure on marketing spend caused by the pandemic, but also a strategic shift in enterprise resource allocation decisions.” According to Gartner, the marketing budget dollars are shifting from marketing to martech solutions; that banks are redirecting the dollars they would ordinarily dedicate to building brand and promoting products/services toward their “digital transformation.” 

In response, those in charge of marketing (the CMO if your bank is large enough and fortunate enough to have one) “are reimagining the capabilities that can be supported by their internal teams.” In other words, bringing the work in house. Nearly 30% of the work previously done by outside agencies, in fact, has been moved to in-house resources in the last 12 months.

So, in summation, what we now have are smaller marketing budgets managed in house, and more often than not, by staff members who have suddenly found themselves with added responsibilities. In other words, a stretched staff, that frankly has neither the funding or the time, to continue to do what banks must do: Sell themselves. Not just “even” during tough times but “because” of tough times.

What I mean is this: The ducks are out there. Simply because banks are compelled to race to the best digital experience doesn’t mean that they can take a vacation from building their brand, differentiating themselves, building trust and relationships… 

ON24’s “2021 B2B Marketing Trends Report: How to Augment the Marketing Organization for a Digital-First Future” speaks to the damage that cuts in a marketing budget can do: “If companies stay flat, freeze, or dramatically reduce their spend in marketing and sales now, they are less likely to recover fast enough against their market competition when the time arises.”

Traditionally, brand awareness has been the ultimate goal of every marketing strategy. With digital transformation we’ve seen a massive shift toward performance marketing — metrics-driven, online marketing campaigns in search of clicks or conversions — and away from brand/relationship building.  There’s a clear danger in this. ON24 has this to say about it: “The truth is, performance marketing may create a jump in short term sales, but it won’t keep your customers coming back again and again. You can sustain performance only with a concurrent brand campaign.”

Are banks running that “concurrent brand campaign”? I can tell you this: The successful ones, the ones that will come out of this downturn stronger, are. There’s no better time for your marketing messaging to stand out in your crowd of competitors than those times when your competitors are silent.

Like I said, those ducks are out there. Take the shot. Especially now, when you can be the only one in the blind.

About Bank Marketing Center

Here at BankMarketingCenter.com, our goal is to help you with that vital, topical, and compelling communication with customers; messaging that will help you build trust, relationships, and revenue. In short, build your brand. To view our campaigns, both print and digital, visit BankMarketingCenter.com. Or, you can contact me directly by phone at 678-528-6688 or email at nreynolds@bankmarketingcenter.com.

As always, I would love to hear your thoughts on this subject.

 Photo courtesy of PR Week Magazine

I’m somewhat ashamed to say this, since I’m such a fan of P&G, but until just recently, I had no idea that Procter & Gamble had a ”Wall of Failures” at their headquarters. I’d been there in the 90’s, when I was working for an agency that handled several of their brands. Unfortunately, the idea to create a tribute to “the one that bombed” didn’t arrive until around 2018. It’s a great idea and I regret having missed it during my visits.

The reason I mention P&G and their wall is because this is a company that I truly admire. A while back, we talked about the 5 Ps of the Marketing Mix and, along what that, the importance of positioning and branding. Now, here is a company, in my opinion, that knows a thing or two on the subject... and even they have had spectacular failures!

Let's face it, we all make mistakes and when it comes to marketing, which is an extremely complex discipline, those mistakes are bound to happen... even when you're putting in your best efforts. P&G is a company that loves research and testing. Even then, they've had products that didn't make it.  And, they've had a lot of time to learn, as well. Remember the brand that launched this packaged goods giant, Ivory Soap? The soap that floats because it's "99 and 44/100ths percent pure?  That was the late 19th Century!

Now, I may be a bit biased — having spent nearly a decade of my agency days contributing to the messaging that would launch more than a handful of P&G brands — but in my humble opinion, no one does it better than they do. The agency never collaborated with them on a launch that didn't involve in-depth research, both qualitative and quantitative. Constant concept testing, as well. Which is why "99 and 44/100ths percent" of their new product launches are successful. And for that reason, I think there’s something to be learned from the fact that they feel the need for a "Wall of Failures."

Here’s a company that currently manages somewhere around 70 brands.  And, sure, they’ve had some notable “missteps” (to be kind), like Fabreze Scentstories, Clairol Touch of Yogurt Shampoo, and their Charmin Spacemaker, but their batting average is still pretty extraordinary.

Adobe Workfront, in an article, “8 Reasons why your marketing campaign failed,”  pretty much sums up my point here: “ After weeks of planning, strategizing, and creating your marketing campaign, it falls flat after it launches. What do you do now? Throw in the towel? Look for a new career path? Of course not. Failure is a reality of content marketing and we’re all bound to experience it at some point. What’s important is how you respond. Figure out what went wrong so you can make necessary adjustments.” According to Workfront, there are eight reasons for failure:

1. You Didn’t Identify the Proper Persona
2. You Had Insufficient Research
3. You Didn’t Have Correct or Realistic Success Metrics
4. You Created the Wrong Message for Your Audience
5. You Delivered Content at the Wrong Time of the Buyer’s Journey
6. You Didn’t Give the Campaign Enough Time
7. You Failed to Meet Regulatory or Brand Compliance Guidelines
8. Your Product Fell Short of Your Claims

That’s a pretty good list. After all, we marketers now live in an age where, thanks to marketing automation and technologies, making mistakes is, frankly, getting increasingly difficult. Numbers 1-8 above are, well, easy. In fact, it's getting to where not identifying your persona, creating the wrong message at the wrong time, and targeting the wrong individual is nearly impossible. So, given all of the resources available to ensure that you DON'T fail, why does it still happen? Maybe the reason why is also the reason why we all need a Wall of Failures. As Henry Ford is quoted on the wall as saying, “the only real mistake is the one from which we learn nothing.”

And maybe that needs to be 9. You didn’t learn from your mistakes.

About Bank Marketing Center

Here at BankMarketingCenter.com, our goal is to help you with that vital, topical, and compelling communication with customers; messaging that will help you build trust, relationships, and revenue. In short, build your brand. To view our campaigns, both print and digital, visit BankMarketingCenter.com. Or, you can contact me directly by phone at 678-528-6688 or email at nreynolds@bankmarketingcenter.com.

Back in the first week of January, President Biden picked Sarah Bloom Raskin to be the Federal Reserve’s top banking regulator, a selection that keeps a Biden promise to improve diversity at the Fed. This week, in a letter published on January 27th, the U.S. Chamber of Commerce is sending the Biden administration the message that it is taking an increasingly visible (and vocal) role in Raskin’s confirmation process.

One of the nation’s oldest and most prominent advocates for the business sector, the Chamber has historically maintained a solid distance from Senate confirmations, particularly when bank regulatory nominees are involved. The chamber’s stance on Raskin makes it clear that the organization sees how Raskin-led reform in banking policy could very well have significantly deleterious effects across the business community.

This relationship-gone-South between the US Chamber of Commerce and the Biden administration is not new news.  The break-up can be traced back, most publicly to this past September when it jumped on the anti-Omarova bandwagon with a letter to members of the Senate Banking, Housing and Urban Affairs Committee outlining Omarova’s shortcomings.. .the notion of “FedAccounts,” in particular. Omarova, of course, withdrew her nomination for leadership of the Office of the Controller of the Currency after considerable opposition from, to be fair, both sides of the aisle, as well as the banking industry.

Just recently, the US Chamber of Commerce penned another letter to the Senate Banking Committee, this one in part criticizing Raskin for advocating that federal regulators “transition financing away from the fossil fuel industry.” The letter went on to provide, frankly, more questions than answers and I found this question, in particular, thought provoking: “Is it the role of the Federal Reserve to direct capital away from certain industries that are politically disfavored or direct capital towards industries that are politically favored?”

A rhetorical question at best, right?  Another question: Is the chamber missing the point?  Ms. Raskin is not singling out the fossil fuel industry simply because it is “politically disfavored.” She’s singling it out because in her opinion — and, as she points out in her May 2020 NY Times Opinion piece, “Why Is the Fed Spending So Much Money on a Dying Industry?” — it’s a bad investment.

Let’s back up a bit. It wasn’t that long ago that Board Governor Lael Brainard told American Banker that the Federal Reserve will subject financial institutions to “scenario analysis” of their climate-related risks. “Scenario analysis,” she said, “should help with risk identification and management as firms account for the physical risk of global warming, such as severe weather events, and the transition risk that will come from changing consumer behaviors and government policies.”

At the time it seemed that the banking industry was warming up a bit to the idea of addressing the challenges posed by global warming.  In one of our 2021 blogs, we talked about how “climate change, and climate risk, present important implications (and opportunities) for banks who can get it right.” And, how according to Forbes, 73% of U.S. banks surveyed are already committed to managing climate risk and promoting the transition to a green economy. “This, they believe, “says the article, “will help them attract both talent and customers.”

So, what happened? Raskin makes the point that we simply cannot ignore “clear warning signs about the economic repercussions of the impending climate crisis by taking action that will lead to increases in greenhouse gas emissions at a time when even in the short term, fossil fuels are a terrible investment. Parts of the industry are awash in hundreds of billions in risky debt. Many fossil fuel companies spent the past decade recklessly expanding production even as they failed to turn a profit. Oil and gas companies now hold $744 billion in bonds and debt, much of it below investment grade or close to it. For taxpayers, shouldering these liabilities is a bad deal. Buying this bad debt is not likely to support the creation of jobs or even ensure that existing jobs survive.”

Should Raskin be thoroughly vetted? Absolutely. It seems, however, that this isn’t about political favor or disfavor. The question here isn’t the one the chamber is asking, that being, “is it the role of the Federal Reserve to direct capital away from certain industries that are politically disfavored or direct capital towards industries that are politically favored?” No, the real question is this: Is the fossil fuel industry a bad investment for banks... and Americans?  Well, we’ll all find out soon enough, won’t we?

About Bank Marketing Center

Here at BankMarketingCenter.com, our goal is to help you with that vital, topical, and compelling communication with customers; messaging that will help you build trust, relationships, and revenue. In short, build your brand. To view our campaigns, both print and digital, visit BankMarketingCenter.com. Or, you can contact me directly by phone at 678-528-6688 or email at nreynolds@bankmarketingcenter.com.

As always, I would love to hear your thoughts on this subject.