By Biff Motley
The introduction of ApplePay surfaces old questions regarding the survivability of banks, at least as we know them today. A recent article in The Wall Street Journal seemed to dismiss this idea, suggesting that since ApplePay and PayPal operate on top of the established checking and credit card systems, bankers are likely to maintain their role as customers’ trusted financial intermediary—provided they take the necessary steps to embrace change as they have in the past.
With new technologies roiling the way information is accumulated, transfigured, safeguarded and distributed, it is incumbent for today’s marketers to understand the firehose-like gush of changes occurring in the financial markets/payments’ area and help create a path forward for their companies and employees.
Below, I will discuss five key action items for inclusion in an ongoing marketing plan. But, first, it’s important to discuss some fundamental dynamics affecting three key target markets:
Boomers are approaching retirement and are focused on the complex constellation of wealth management issues. GenX/millennials are in mid-career and searching for innovative ways to minimize the “friction” of traditional banking system protocols and impositions while continually seeking new and smarter ways of doing things. And small business owners are increasingly overwhelmed with their own marketing imperatives, leaving little time for financial optimization.
With these three prototypical targets in mind, here are five key marketing strategies to consider for your bank:
- Re-engineer Your Delivery System. With a growing preference by millennials andothers for online, self-service, and mobile transaction services, a carefully planned reorientation of your delivery systems must occur. Research shows that nearly 40 percent of those aged 18 to 34 would bank at a financial institution with no branches. And, while this proportion drops to 16 percent among those over age 55, this preference for a do-it-yourself routine will continue to grow in the years ahead.
This argues for a well-executed plan of redefining and likely reducing the number of branch locations while extending hours and amplifying the role of bankers in providing those high-value, consultative services that do not lend themselves to online self-service.
Most bankers would agree this reorientation is obvious. What’s less clear is exactly how this combination of shrinking/expanding will roll out. And, how it will be positioned to clients.
- Focus on Wealth Management Services. Boomers’ advancement through life has defined marketing opportunities for over 60 years and, due simply to the enormous size of this segment, this trend continues. Except today, the focus isn’t new schools, new cars, Rock ‘n Roll and fast food. Today, it is retirement …. and the fitful puzzles surrounding the financing of a retirement lifestyle. For bankers, envisioning how to help clients with these questions requires new investments in skilled people, systems, and partners. Until recently, bankers weren’t attracted to the low margins associated with investment services, but this may be changing, as they discover ways to expand relationships with other services and better pricing concepts. In addition, there is growing suspicion that perhaps our economy won’t return to its historic economic growth rate, and, as a result even modest loan growth may be syphoned off to nonbanks need to be supplemented with other sources of profit growth.
- Get Close to Your Small-Business Clients. Small businesses are living in the same rapidly changing environment as your branches. Payment technologies are changing. Their clients want to do business online. They need to be open 24/7. And, on top of this, their margins are shrinking as their clients do comparison shopping online. They need help, not just loans. And they value having a financial adviser who not only offers traditional short-term loans but can usefully advice on ways to source new capital, provide help with new payment technologies, offer new payment/cash management services, and bring together other small businesses with specialized experts for idea exchanges and other ways to achieve success.
- Upgrade Your People Skills. To accomplish these strategies, as well as transition your back office operation to contemporary information-processing methods, a new formulation of banker skills must come forward. Past practices of assembling functional organizations staffed with career-long specialized operatives is giving way to organizations of change managers. These are visionary people who have the savvy and initiative to envision what needs to happen, then find specialists who can assist in setting it up, and then turn over daily operations to a new type of customer-focused manager. And all of this done within a framework of clear objectives and performance management. Spend a day or so watching CNBC, the financial channel, and you’ll hear interviews with large bank CEOs who sound much more like marketing gurus than CFOs.
- Monitor Customer Satisfaction. While measuring customer satisfaction has always been among the “10 commandments” for successful marketers, it has never been as important as it is today. Major changes present both great opportunities and threats. And while the intent is always to improve the customer experience, many clients won’t yet know how valuable, for example, a remote check deposit service is until they call their banker while on vacation and need to deposit a check. Then they will love it. In the years ahead, there will be scores of new and better ways for clients to save time and better manage their money. As you oversee this exciting transition, make sure your promotion/feedback loop includes systematic, measurable customer feedback.
While these challenges are enormous, I cannot recall a time during the past 40 years when fundamental marketing issues played a more important role than today. I hope you are enjoying your job.
Biff Motley is president of Motley & Associates, New Orleans. Email: [email protected]