New Marketing Competencies for Community-Based FIs

Hey, community bank and credit union marketers: Imagine that you’re sitting in your office, and your CEO comes in and says, “Got a minute? I’m putting together a presentation for the board, and I need to tell them what the Marketing department is really good at.”

You’ve got a minute. What do you say?

I would bet that of the many possible ways you might describe what your Marketing department is good at, you wouldn’t say, “We’re really good at reflecting the organization’s commitment to the community, our genuine concern for our fellow citizens, and our professionalism.”

[You wouldn’t say that, yet, when asked what he wanted from his Marketing department, one credit union chief executive officer actually said, “I want our marketing to reflect our commitment to the community, our genuine concern for our fellow citizens, and our professionalism.”]

My guess is that your description of what your Marketing department is really good at would tend toward some generic, high-level statement like, “We’re really good at understanding our customers’ financial needs,” or, “We’re really good at creating a strong affinity for the institution among our target market.” A few marketing execs might get more granular and say, “We’re really good at getting prospects in the door.”

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The inability to pinpoint exactly what your Marketing department is really good at–and perhaps, not really good at–reflects a strategic shortcoming for many community-based FI marketers. Marketing strategy isn’t simply about what projects and campaigns the firm is going to execute next year–it’s about building capabilities and competencies that will enable the successful execution of those projects and campaigns.

Yet, in my experience, nothing puts senior executives to sleep faster than talking about core competencies.

What many marketers at community-based FIs don’t recognize is that their core competency–that is, what they’re really good at–is executing traditional media advertising and marketing campaigns. The end results of those campaigns might vary–and might even be unsuccessful–but what Marketing is good at is getting them done.

In a recent survey of marketers (across industries), nearly seven in 10 thought they were effective at generating awareness. Less than half thought they were good at driving purchase.

My bet is that the percentage of financial services marketers who think they’re effective at driving purchase is way less than half.

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In the past, the point of influence–not just the point of sale–was the branch. It wasn’t just where the order was taken (i.e., the account opened)–it was where the consumer actually made the decision to do business with that financial institution.

Today, it’s very different. Sure, a majority of account applications are taken in the branch. But that doesn’t mean the consumer’s decision of who to do business with is made there. Thanks to technology, that decision is often made long before someone walks into the branch.

What this means is that in the past, Marketing’s potential to drive purchase was limited. Marketing could get people in the door–but it was someone else’s job to close the sale.

Today, Marketing’s potential to close the sale is much greater.

In many community-based FIs, however, Marketing isn’t good at doing that. That has to change. Whether it puts you to sleep or not, Marketing must develop new competencies to succeed–and help its FI to succeed.

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There are three competencies Marketing at community-based FIs needs to succeed in banking today: 1) activity-based marketing, 2) customer journey mapping, and 3) customer data management.

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If you think about it, most traditional marketing happens outside of the actual process the marketing activity is trying to influence. We’re watching our favorite TV program when a commercial for a bank comes on and tries to convince us to switch banks. Or we’re sitting on a train, commuting to work, reading a newspaper (probably online), when a banner ad flashes in our face, trying to get our attention to tell us we should be banking with them. We weren’t exactly thinking about banking at those times.

If you’re good at getting people’s attention when they’re doing other things and getting them to think about marketing, good for you! Keep it up!

But increasingly, as mobile technologies like the smartphone and tablet assist us in everything we do, marketers will need to develop tools and capabilities (i.e., mobile apps) that shape and guide those activities, and influence consumers to do business with that marketer.

That’s what activity-based marketing is: marketing within the context of an activity being performed by a customer or prospect.

There are a number of great examples of financial institutions doing activity-based marketing:

1) USAA. USAA’s Auto Circle app changes the car buying process by providing car shoppers with an app that lets them search for the type of car they want, track those cars for future reference and comparison, get a loan for the car when they’re ready to buy it, and insure it as well. Transformation of the car-buying activity or process.

2) Commonwealth Bank. This Australian bank’s Zillow-type app manages the home buying process. It uses augmented reality technology to let a user “take a picture” of a home or building, determine the location, access the Realtor Database, and display the price and details of the home if it’s for sale. This app enables Commonwealth to identify potential mortgage customers long before it was able to do so in the past. I don’t know if Commonwealth does this or not, but the app could give other marketers interested in reaching new movers–who typically spend thousands of dollars in the six months after moving—an opportunity to reach prospects even before they move, enabling Commonwealth to generate advertising revenue.

3) Caixa Bank. This Spanish bank has developed a mobile app that transforms the ticket-buying process for events like movies, sports, and concerts.

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These FIs aren’t simply trying to influence who a customer applies for a loan with, or which payment mechanism a consumer uses to pay for something. They’re using mobile technologies to change the entire process–not just the banking part of it. By doing so, they’re creating awareness of what the FI has to offer, generating positive affinity by creating a superior experience, and driving the final purchase (or application).

Although many community-based FIs will say they don’t have the resources to develop these kinds of mobile apps, gaining a competitive advantage through traditional media (TV, radio, direct mail) advertising–that is, relying on traditional competencies–is unlikely to work. Large FIs are just as good at it and have a lot more money to spend on it.

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To be proficient at activity-based marketing requires a lot more than just mobile technology development capability. In fact, it doesn’t even require that at all, since that’s easily outsourced.

What community-based FIs must be good at–in order to be proficient at activity-based marketing–is customer journey mapping. This is the process by which marketers understand what actions consumers take in an activity like car shopping or home buying, what consumers are thinking about during the process, what they’re feeling, and–this is the important part–what opportunities the FI has to add value and gain a competitive advantage.

Journey mapping requires data about customers and prospects. Which is why customer data management is the third new competency community-based FIs must have. If you think you know a lot about your customers/members today, we think You Don’t Know Jack.

-rs

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Writing in-depth about journey mapping and customer data management would turn this post into a white paper. To learn more about the new marketing competencies for community-based FIs, join me at Deluxe Exchange 2016 on February 10, where I’ll be presenting these ideas in detail.

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