In my last posting, I talked about what Gonzo bank marketers should be doing to maximize their value to their respective institutions. It’s only fair to tell the rest of the story – what the CEO should be doing related to marketing.
Most CEOs will tell you that their marketers really don’t pay much attention to the intense business issues and challenges that jam CEO calendars. The marketers will complain that the boss doesn’t understand much about marketing and often minimizes its importance. I generally find both statements to be true. There has to be a meeting of the minds here to ensure that the bank gets a good return on its marketing investment and marketers broaden their mental scope of attention enough to see the big picture and stay fully engaged.
Many CEOs have a limited view of what marketing truly entails.
Jack Trout, author of the great little book The Power of Simplicity, said, “Marketing is far too important to delegate to middle management.” What Trout was getting at is the general notion that CEOs often see marketing as a necessary expense, not a strategic function. As long at the calendared promotions get launched, the “logo” stuff is nice, and the Web site information is up to date, everyone is happy. This limited view of marketing can be a general detriment to the organization. The evidence, you say?
True Gonzo CEOs know marketing is a strategic function that includes understanding customer segments and their specific needs; developing products that are relative; building service processes that meet the needs of clearly defined and potentially profitable segments; anticipating the needs of future segments; finding the pricing sweet spot between customer acceptance and profitability; and intelligent branding and public communication that position the bank as smart and customer savvy. This obviously takes work, and it takes a leadership commitment to see that the job gets done right. Please accept my humble thoughts on a few key areas.
1. New Product Development is an Essential Function
There should be a specific and documented process for new product development and a senior officer who is responsible for the ongoing process in which marketers, line managers, technology and finance people participate. Allowing line managers to develop products in their own silos often leads to conflicting incentives, slow implementation and cultural mayhem. While this process takes discipline and cooperation, it can separate the market leaders from the followers. Once we have convinced ourselves that we are in a commodity business and have no choice but to compete on service alone, product and delivery creativity goes out the window.
2. Delivery Strategy Must Be Aligned with Customer Needs, Products and Marketing
Developing sound delivery strategy depends on a clear understanding of customer segmentation and customer needs. We all know we have customers that prefer the branch environment. We also know they are aging and transferring wealth to their kids that will expect a robust remote banking experience. The marketing process must include consideration for multi-channel delivery based on the needs of major customer segments, especially the segments that are growing and will dominate the business model in the future.
3. Marketing Should Play a Major Role in the Bank’s Sales Strategy
Marketing should play a major role in developing the bank’s sales strategy, including the messaging that shows up on customer-facing computer screens. A good MCIF system that analyzes customer data and develops the right messaging and newer applications that will push it to the font, either in the branch or call center, can increase cross selling from mediocre to great.
4. Be Careful About Making Branding Promises You Can’t Keep
Branding is misunderstood by many CEOs. Branding is the process of building a public personality for the bank that people remember and are attracted to. This “personality” is directly affected by the accumulation of all customer interactions with the bank. It is important to pay attention to the messaging that is going out there and ensure the customer experience does not contradict it.
5. The “Power of the Internet” is Not a Cliché
Having been a chief strategy officer and planning consultant for years, I see a lot of strategic plans. In my experience, in many cases a bank’s Web site does not reflect the strategies embodied in its planning documents. While we see the Internet growing in importance as a delivery channel, we see very few smaller to mid-size institutions paying enough attention to their Web sites. This is not an area CEOs can allow to get sloppy.
6. Insist on Fiscal Responsibility
Many CEOs today do not require sufficient information about the effectiveness of marketing expenditures. It is not only fair, but necessary that major marketing investments are looked at from a cost-benefit perspective. IT is expected to justify its investments, right? At the same time understand that some investments are difficult to measure – e.g., newspaper, radio, outdoor, television and corporate donations.
The importance of communication between the bank’s CEO and its marketing staff cannot be overestimated. I know it is hard for most CEOs to find the time to do this – there’s just too much on their plates. But CEOs who do make time to talk with their marketers will always learn something. And the marketers will be more energized and productive as a result.
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2 thoughts on “Bank Marketing, Part II – Thoughts for CEOs”
I read Gonzo religiously, and even have a t-shirt. I don’t think I have read something here as spot on and impactful as this article. Excellent job!
Ted’s article is indeed spot on pointing out what needs to be done for continued success.
For the 95% (my WAG) of the community bank CEOs who don’t have line item expenditures in their budgets for consumer research and product development…they may need an outside firm with a track record in helping their colleagues succeed…
For the 95% of the community bank CEOs who do not have internet marketing gurus on their staff to help them build profitable online marketing channels..they may want to talk with those experienced in that new brave world as well …
I work with 260 other people who are working on those EXACT solutions ever day… and am more than happy to take their calls.