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20 Things Financial Institutions Should Do (But Don’t)

Here are 20 priorities for retail financial institutions. This is what some are doing, but most others can’t, don’t or won’t. To some this might seem like a list of “duhs” — things that seem obvious, but nonetheless go ignored or unaddressed. What would you add to the list of marketing opportunities and low-hanging fruit for financial institutions?

1. Differentiate

Any financial institution that looks like, acts like, or sounds like other banks and credit unions can’t complain when they are forced to compete on rates, fees and price. Differentiation is the key to a strong brand.

2. Personal communications

You hear financial institutions bragging about how personal they are all the time, but Tim McAlpine, President of Currency, wonders how often they send handwritten thank you cards for loans, mortgages and renewals. How often do your employees make phone calls to customers thanking them for their business? Imagine how much love you could buy with a simple expression of appreciation. How many direct marketing messages do you send that start with “Dear Valued Customer…?”

3. Mobile solutions

If your financial institution isn’t offering some form of mobile banking service currently, there had better be plans underway or you risk falling behind competitively. Demand for services like remote deposit, SMS, and apps for smart phones and iPads is growing rapidly, and are quickly becoming common consumer expectations. (See also, The Very Mobile Future of Retail Banking.)

4. Identify profitable customers

How can you focus on cultivating profitable relationships if you don’t first understand who profitable customers are, why they are profitable and how they got that way.

For credit unions, Paul Stull, SVP/Arizona State Credit Union, says that “if you look at your most unprofitable members, you will find that they have as many or more services per household as your most profitable.”

“Most don’t know which members are profitable, which are not and why,” he adds. “This knowledge can drive great strategy.”

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5. Email marketing

It’s simply stunning how many financial institutions still don’t utilize email marketing tools. Even today, you still hear bankers say things like, “No, we don’t really collect people’s email addresses.”

6. Create emotional appeal

Financial institutions act as if they are immune to the principles of consumer psychology. People make all decisions (not just purchase decisions) for two reasons: the real reason and the “good reason” (emotional motives vs. logical justifications).

“At almost all credit unions, I see branding that goes no further than generic stock photography,” notes Ben Rogers, Director of Research at Filene Research Institute. “In most consumers’ eyes, bland images and photography are good proxies for a bland institution.”

7. Stop doing things that aren’t working

As obvious as this sounds, there are a number of inefficient and unprofitable bad habits financial institutions have a hard time shaking — some are even counter-productive.

“It’s easy to become comfortable with routines and change is difficult,” notes Brady Walen, Director of Marketing at Market Insights. “Success in today’s marketplace requires the ability to recognize where resources are being wasted, and the willingness to make necessary changes.”

8. Calculate ROI

How can you decide whether or not to continue or abandon certain initiatives if you don’t know what works and what doesn’t? Whether you’re talking about e-Statements, social media, newsletters or community giving — What’s the impact on the bottom line?

Mark Arnold, a credit union branding consultant, wonders how financial institutions measure their marketing success. When was the last time you ran the math on your promotions? Do you know if online ads are more effective than radio?

“With product lifecycles, financial institutions tend to bring on products, set them and then forget them,” says Paul Stull, SVP/Arizona State Credit Union. “Doing a product review and striking a product P&L could identify some things that need to get thrown over the side.”

9. Utilize website analytics and intelligence

Banks and credit unions seem to design their websites based more on what other financial institutions are doing than how consumers actually use the sites. There is a wealth of information that often goes ignored during the redesign process for banking websites. What are visitors looking for most often? How many clicks does it take to find? What navigation paths do people take? What are the most common landing pages? What are people searching for that they can’t find? How can exit pages be improved?

10. Reward loyal customers

How many customers have been with you for five years? Ten years? Twenty? These are people that have stood by you. Ron Shevlin, Senior Analyst with Aite, says you should acknowledge their tenure. (See item 2.)

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11. Pay more attention

It’s disturbing how many bank and credit union teams don’t spend much — if any — time learning, discussing and evaluating topics vital to their organizations’ success (readers of The Financial Brand excluded, of course). Serge Millman, CEO of Optirate, is concerned that financial institutions aren’t paying enough attention to emerging trends. What new technologies are being adopted? What is the competition doing? What are consumers saying?

12. Measure what matters

According to Mike Bartoo, Regional Manager at Marquis Software Solutions, financial institutions measure what’s easy instead of what’s really important. (See items 4, 7 and 8.) They may look at things like new customers and loan volume, but are they looking at other metrics like products-per-household and wallet share?

13. Integrating branding into HR

Do your employees know how to live your brand, or is your branding strategy little more than lip service? If you aren’t using your brand to screen, train and evaluate employees, you still have some work to do.

“Internal marketing is critical to the success of any brand,” observes Brady Walen of Market Insights. “Employees must not only be held accountable for providing accurate transactions and good customer service, but also for delivering on their institution’s brand promise. Employees’ behaviors either help or hurt you brand and the position your brand holds in the hearts and minds of the consumer.”

“I believe banks should train employees on strategically important skills, not just systems/compliance,” recommends banking consultant Jeff Marsico. “I think they should hire as if that person was going to be the next CEO. They settle, in my opinion.”

14. Onboarding program

What does the new customer acquisition process frequently look like in retail banking? Like this: Someone walks in, opens a new account and leaves. That’s it…

Jim Marous, Senior Director of Marketing Services at Harland Clarke and bank marketing blogger, surveyed a group of bank marketing executives asking them how many had an on-boarding program. Half. Who reaches out more than once? Half of those. How many usually contact new customers at least four times? How many use more than one channel? By the time Jim was done, he was left with only one bank that had a truly robust onboarding program… out of 200.

15. Act like a retailer

“Banks have brick-and-mortar, multiple locations, products to sell, display areas to merchandise, staff to train, promotions to run — all basic fundamental tasks of effective retailing — yet banks seldom approach their business with this mindset,” observes John Mathes, a director at Bancography. “Ask a bank or credit union CMO what they’re doing to drive traffic in key promotional periods, and you’ll usually get a blank stare.”

Mathes says its unlikely that your typical retail financial institution has a strategic marketing gameplan, lobby engagement strategy or even a promotional calendar.

16. Close unprofitable branches

The choice to close a branch can be difficult. However, once a location has been identified as unprofitable, action must be taken.

“If other options are exhausted and a branch remains unprofitable, you’ve got to do something different,” says Brady Walen at Market Insights.

“Alternatives can be offered or created for customers,” Walen notes. “Other delivery channels like online banking, mobile banking, ATM kiosks, a nearby branch, or even the introduction of a smaller branch may be a viable alternative for customers of a branch facing closure.”

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17. Marketing inside the firewall

Some financial institutions say they feel trapped by uncooperative third-party online banking service providers, but in this day and age, you can’t tolerate any excuses. When you don’t cross-sell to your most captive and engaged audience — online customers — you are leaving money on the table.

You could create a super-savvy system that pushes the products/services each customer is most likely to adopt, but you don’t need to go this far. At the very least, deploy a “dumb system” that shotguns your most profitable products and services to all users.

18. Integrate systems

Whether you’re talking about core data processing, online banking, marketing, CRM, email, etc., the integration of most financial institutions’ systems ranges between poor to horrible. Data gets scattered across multiple systems, fracturing the customer experience with a maze of service channels and contact points. Banking consultant Jeff Marsico is concerned about how difficult it can become to quantify the profitability of relationships with such messy systems. How can you create a holistic view?

19. PR

PR is an oft neglected practice at retail financial institutions. When you get free press, it gives your messages credibility — much more effective than advertising. But there’s a lot more to PR than pumping out announcements about earnings, new branches and employee promotions. The value of PR isn’t measured by how much you pound out, it’s measured by how much press you get. The hitch? The only way to get coverage is to do truly newsworthy things.

20. Non-traditional (guerrilla) marketing

When it’s time to run your promotions, do you use the same old marketing tools you always use? Is it a check list of traditional marketing tactics: “We need a print ad, radio spot, item in the newsletter, in-branch screens, a press release and three tweets.” Unless you have a truckload of money for ads, this is not how you get consumers’ attention today. You have to be creative, clever and often controversial. For some ideas, check out the guerilla marketing category here at The Financial Brand, and this article with 15 non-traditional marketing examples.

21. What do you think?

What would you add to this list? Please keep in mind that this isn’t a list of things some banks and credit unions could do, which is a much different and considerably longer list than what everyone should do.

All content © 2017 by The Financial Brand and may not be reproduced by any means without permission.

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  1. Roger Rassman says:

    In the spirit of adding to the list of “duhs,” the one that isn’t here and is critical to all marketers is measuring and managing top of mind awareness. When it is strong it will feed a few of the others listed and, frankly, it’s not possible to have a strong brand without it. I have worked with many community banks and credit unions who are amazed at how low their top of mind is, especially in comparison to the national brands. Mindshare is typically owned by the big guys. If the little guys want to grow market share, they need to work on mindshare.

    Another for the list is “innovate, innovate, innovate.” Lack of innovation is one of the most significant strategic weaknesses in community banks and credit unions across the country.

  2. Great list, Jeffry. Thanks for capturing my POV regarding #15. I posted a link to this story on the Financial Services Marketing Group discussion page on LinkedIn and judging by the number of responses (and additional submitted “things”), the article is really resonating with financial services marketers.

    You really hit the nail on the head with #1. The rest of the items never have a chance if you don’t achieve separation with your brand. Differentiation is my mantra and is what I practice with all of my clients. Jack Trout said it best many years ago and it still rings just as true today… “differentiate or die”.

    It would be interesting to see a follow up article listing all of the other great suggestions.

    John Mathes

  3. I agree with John that #1 deserves its place and all others build from it. I must admit that I’m not so confident community FI leadership believes it, though.

    ~ Jeff

  4. Couldn’t a financial institution, in effect, essentially achieve #1 if they did numbers 2-20?

  5. Difficult at best. You have to glue all of those 19 disparate “things” together for consistency and continuity. You do that with a well-defined brand positioning/platform… and a successful brand positioning is one that is differentiated.

  6. I don’t see all of the other 19 things as disparate. The majority of them (at least 10) hinge upon gathering the vast wealth of information banks/CUs have about their customers/members(in different systems, external resources, etc.), turning that information into actionable intelligence, taking action upon that knowledge and measuring how you did so that you can expand, improve or discontinue that activity.

  7. How about adding “Growing & Retaining Relationships with Young Consumers?” Some financial institutions are better at attracting Gen-Y than others, but most struggle. Even fewer seem capable of retaining/growing those relationships as young people mature (move, enter the workforce, buy their first car, get their first credit card, buy their first home, start their families, etc.).

  8. I think you should add “Hire an Expert when Necessary”

    It is amazing to me the number of small and mid-size financial institutions that know they should be doing everything on the list above, but don’t have a staff that is capable of addressing these issues. Instead of hiring a consultant or a firm to assist them (because it “costs too much”) they choose to ignore these areas instead. It is cheaper to do nothing than to invest in external resources to employ some of the ideas above.

    What appears to them to be a cost savings, however, is really a liability. They risk loosing current customers and miss an opportunity to expand their marketing tools. One of my favorite marketers, Jeffery Hayzlett (former Kodak CMO) says it best – “What is the ROI – Return on Ignoring?” I think we can all answer that one.

  9. Not much new here, other than the writer is committing the same error as many financial institutions do by confusing strategies with tactics and ignoring the overall need to connect strategies to specific business outcomes.

    Any marketing plan should start with the business objectives, whether it’s improving profitability by, signing up new clients, improving client satisfaction, deepening existing clients or building greater brand awareness.

    Once the objectives are established, strategies are chosen to fulfill them. Here, “Differentiate yourself,” “Reward loyal customers,” “Calculate ROI,” “Create emotional appeal,” and “Act like a retailer” are strategies that connect to business goals.

    From the strategies come the tactics. “Closing branches,” “Guerilla marketing,” “Email marketing,” “Integrating systems,” “PR” and “Measure what matters” are tactics, not strategies.

    It’s amazing how many institutions, like this article, confuse tactics with strategies. I can’t tell you how many clients come to me saying, “We need a new brochure/web site/SEO strategy/email program/social media plan” and, when I ask them what strategic and business objectives such tactics will serve, stare back at me with glazed expressions on their faces.

    Unfortunately, too many financial marketers, bent on winning work, feed into this confusion, trying to win our small piece of the tactical marketing pie without thinking about the big picture. Then, when these programs don’t work, marketing is blamed, budgets are slashed, and no one learns.

  10. Jeff,

    I’m sorry you found the advice so disappointing, however this article was never intended as a comprehensive strategic overview or guide to building a strategic game plan. No, most of the items aren’t new. Yes, establishing goals and objectives should come first. Yes, organizations need a strategy. And yes, many of the things in the list are tactics, but what’s wrong with offering readers a list of tactics that they should consider within their organization’s strategic framework? Are the only worthwhile discussions those that hover above the 35,000 foot level? Are tactics taboo, never to be discussed? Or does every discussion involving tactics always need to include a reminder that tactics should be framed within a greater strategic construct?

    It’s worth pointing out that this article isn’t the work of one author. The list is a compendium of suggestions from many of the financial industry’s more respected marketing figures — both consultants and clients.

    Nice to meet you, and thanks for your comment.

  11. Josh Purler says:

    “The value of PR isn’t measured by how much you pound out, it’s measured by how much press you get.”

    It should actually go further. What do you get out of the press you got?

  12. Good point Josh.

  13. This is really interesting, as obvious as it seems the problem with financial brands is that they are too bureaucratic, although marketers know and should do the above points however they struggle to execute simply because the execution tools are not in their hands i.e. Apps = IT involvement, system integration = IT, ROI Tracking some of the brands have made it so confidential to track daily sales results, call leads, batch visits etc… Webanalytics tool = IT, identifying high propensity customers with the right messages = Analytics/Finance dep’t…. If you highlight these obvious points to each relevant dep’t, there answer would be ” not required” or “not in my KPIs, sorry” or add it in ur next year’s activities and we’ll look if the budget allows us to do 3 out of 21.
    Unless shareholders/owners start believe that marketers directly contribute in the growth of any organization and they don’t only spend money few of the above points might get executed.

  14. One observation that I have seen in my experience is that often small(er) institutions have a tendency to place the Director of Marketing under the Retail span of control, or worse yet don’t have an employee dedicated in a full time capacity (outsourced to ad agency, comingled with a VP of sales, etc.)

    In order to drive any of these initiatives which reach across the traditional reporting lines of an organization, an executive level Director of Marketing may be necessary. The value of this high level employee is that they can sell the benefits of these initiatives to other the executive level staff by outlining why and how each item impacts the overall organizational strategy.

    I can only imagine the frustration that the employee responsible for marketing would be when attempting to drive initiatives on this list if they’re not empowered to do so based on organization structure…

  15. What should be at the top of this list is the need for truly skilled Marketing professionals who have real world knowledge and pragmatic skills. Otherwise, you’re just going to get a bunch of pretty materials.

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