By Kate Young
Is the marketing department at your bank a strategic partner, involved with long term planning and executive decision making? If not, the C suite may be missing a vital opportunity. A first-rate marketing team is a wellspring of the kind of insights you need to make good decisions. It’s the department that should be able to tell you about your most profitable customers; the break-even balance for each of your products; the impacts of product re-pricing; customer acquisition, retention, and attrition levels—not to mention intel on what your competitors are up to.
Banks that write off marketing as the “department of arts and crafts” do so at their own peril. Without full buy-in from executive management, it’s tough for marketing to accomplish anything. By the same token, without full accountability, it’s unlikely that marketing can gain the traction it needs to drive revenue.
For this crucial relationship to work, a bank must establish a top-down understanding of what marketing will deliver.
And the central theme, of course, is data. In the absence of measurable data, even the slickest initiatives won’t make much of a ripple. That’s why we turned to Tony Rizzo, CMO at data analytics firm Marquis (now endorsed by ABA for its marketing analytics software), to render hundreds of potential marketing data points down to the essential questions every CEO should consider asking their marketing teams.
- Are you communicating a clarity of vision?
“This runs both ways,” Rizzo says. It’s up to the CEO to articulate the vision of the bank—then it’s up to marketing to clearly translate that externally through consistent messaging and execution.
The mission/vision/values statement may strike some as an abstraction, but it’s not. Are you a retail bank? Are you a private bank with a focus on wealth management? Or a small business bank? What does that mean within the context of where you’re located and what you’re offering?
“This needs to be documented,” Rizzo advises. It should also be specific. While resonant taglines and elevator pitches are important, a fully developed vision should reach beyond a pithy declaration. It should detail the how’s and why’s of what the bank does. “It needs to be more than a couple of paragraphs,” Rizzo says. “And it needs to be reinforced by everything marketing does—every platform, tool, or location you’re operating in.” This consistency and clarity makes it possible the staff to communicate with confidence—which translates into trust for the customer.
- Have you identified the key numbers?
Marketing should be measuring and reporting the impact of bank activities. That means understanding how each of the bank’s products and services contribute to margin, non-interest income, and non-interest expense. It means knowing how to calculate profit and expected ROI on all marketing efforts.
If you can do that correctly and consistently, Rizzo says, “The required decision points come much easier.”
What kind of decision points? When someone comes along and says, ‘Hey, you should invest in social media,’ for example, marketing has to know how to quantify the return before making the investment.
With social media, it’s not enough to quantify soft metrics—likes, retweets, shares. “None of that puts money in the coffers,” Rizzo points out. “If we spend $20,000 on social media, what’s the return to the bank?” To find out, you need a plan for tracking the social media engagements that eventually convert prospects to customers.
“You don’t need to be a CPA,” Rizzo adds. “But you do need to know what the numbers mean and how to get them.”
- Do you know the customers?
Marketing should be able to look at the bank’s customers and identify exactly who is buying each product. Using data, marketing should also be able to determine what the bank’s customers “look like” when they’re buying a checking product. Or a mortgage. Or a small business loan. What are their characteristics? Why are they buying? Who is carrying what balances? Do people who live closer to the branch buy more products?
The point of the quantitative process is to uncover gaps and behavior patterns and turn them into opportunities. Find out what makes a profitable customer at your branch. “If analysis tells you that it’s three products and a service,” Rizzo explains, “then you look for customers with two products and a service, and you try to convert them.”
Banks can’t rely solely on quantitative data. It’s just as important to gather data on the customer’s point of view. Rizzo cautions against relying on surveys to uncover these perspectives. “When you ask a customer how everything is going,” he says, “they always say everything’s fine.”
To understand the customer’s perspective, marketing needs a repeatable, sustainable plan for customer contact. Frontline staff should know exactly how to ask the right questions, every time, across a long cross section of customers. What do you get out of all that? You’ve uncovered the data that deepens relationships—making them better for your bank and more meaningful for the customer.
- What are you doing to make every interaction easy and an absolute delight for the customer?
In an already crowded field, most bank marketers are also feeling the encroachment of non-traditional competitors like Venmo or SoFi. And it’s not just financial technology that has changed. The people who use it are also changing. The people who were born into a digital world are only now entering peak years for bank engagement. Banks had better be prepared to make the customer experience frictionless for them.
Rizzo thinks it’s a fallacy, though, to assume that the brands famous for inspiring passion—Apple, Amazon, Zappos—are doing anything new or different with their marketing. “Good marketing is about being pragmatic,” he says. When it comes to Apple, consumers tend to “see the shiny object on the surface.” But, he added, Apple has had “the same vision and values all along. They know their numbers. They know exactly why people like their stores. And they know how to use that information.”
Rizzo argues that the hardest job in marketing is bank marketing.
“How do you function in a saturated, competitive environment where you’re buying and selling dollars? You have to have vision, numbers, customer insights—and you have to make it easy. And when you’re done, you have to get up the next day and do it all over.”
Kate Young is the senior editor of ABABankMarketing.com. Email: kyoung@aba.com.
