Comments on: State of Bank & Credit Union Marketing In 2012

By: Crunch Time: Obama Vs. Romney – Who’s Best for Financial Services? | IMRE Financial IQ

Thu, 01 Nov 2012 17:19:47 +0000

[...] this year, The Financial Brand polled banks and credit unions to learn more about their marketing budgets for 2012. They learned [...]

By: Wookin’ Pa Nub: Banks Are Looking For Growth In All The Wrong Places | Snarketing 2.0

Sun, 05 Aug 2012 13:02:34 +0000

[...] good evidence that it doesn’t. In a study done by The Financial Brand and Jim Marous, loan growth was listed as the top marketing priority by one-third of banks, and 60% [...]

By: Editor

Editor — Fri, 03 Aug 2012 15:51:02 +0000

I meant to say the same thing about credit unions: You're right, they tend to direct some of the surpluses generated by their tax exemptions towards marketing. In all fairness, however, there are a number of banks investing 0.1% into marketing, including BofA.

By: Victoria

Victoria — Thu, 02 Aug 2012 16:04:24 +0000

@Editor

Thank you for responding. I do agree with you that a number of factors are at play when determining what the marketing budget should look like. In my opinion, everyone can do something with a lot, the skill is to accomplish a lot with less. Case in point is word of mouth marketing and initiatives that require relatively little financial resources but successfully engage current and potential customers.

As to your example of institutions that spend more… Please do not lump credit unions with banks. We actually pay taxes. Also, it used to be that $500 per one million of assets (0.05%)was the rule of tumb for marketing expenditure and that was at a time when ROA of 1% was the norm. With decreasing margins and ROAs, I don’t see the case for increasing the number.

Ultimately, as a CFO I want to see measureable results. If strong, supportable ROI is present, then I can see a case for increased expenditure.

Thank you.

By: Editor

Editor — Wed, 01 Aug 2012 15:44:40 +0000

What do you think the marketing investment should be for a financial institution with less than $500 million in assets like yours Victoria? Obviously, there is going to be a wide range of variance in budgets for smaller institutions, with factors like geographic market, target audience, growth goals, profitability and (to your point) size all playing a role. As passionately as you may believe a marketing budget of 0.1% is irrational for some financial institutions, there are some who spend way more than that. The 0.1% is just a ballpark figure. Financial marketers should feel comfortable using this as a number they can tweak up or down according to their institution's unique goals and situation.

By: Victoria

Victoria — Tue, 31 Jul 2012 21:58:16 +0000

Please stop telling marketing folks that it is recommended to spend 0.1% of assets on marketing regardless of asset size.

Reality Check: As an example, average ROA of banks in MA in 2011 was as follows:

0.11 for banks less than 100 mill
0.39 for banks 100-500 mill
0.61 for banks 500 mill to 1 bill
0.77 for banks over 1 bill

Clearly disporportionate returns require different marketing budget standards. Clearly, banks less than 500 mill in assets cannot affod, nor do they spend, 0.1% on marketing.

Regards,

A community bank CFO who is not seeing any concrete marketing ROI results

By: Worth Repeating. | Geezeo, Inc.

Worth Repeating. | Geezeo, Inc. — Mon, 30 Jul 2012 17:51:27 +0000

[...] more information, visit http://thefinancialbrand.com/21384/2012-bank-credit-union-marketing-study-results/ This entry was posted in Thoughts. Bookmark the permalink. ← We tend to agree. Banks and [...]

By: Bank Marketing Moves Online

Bank Marketing Moves Online — Wed, 25 Jan 2012 03:35:39 +0000

[...] There may be gaps in execution, but banks and credit unions are fast shifting their marketing to the Internet, according to a survey by the Financial Brand. [...]

By: Editor

Editor — Mon, 23 Jan 2012 16:02:13 +0000

@Tony – In all fairness, the question in the survey was about what tracking tools financial marketers used, not how they presented the data they collected to internal stakeholders. Among the top answers for measuring the effectiveness of marketing efforts, banks and credit unions cited customer/member growth and loan/deposit growth. Both these could easily be considered the “R” in “ROI.” But to your point, most marketers don’t speak the language of CFOs nor present the data they track in the context of ROI.

By: David

David — Mon, 23 Jan 2012 15:34:34 +0000

It appears an area many credit unions have an issue is proving ROI. I have yet to find a Credit Union that is able to track campaigns from start to finish without some sort of assumptions or requiring an employee to enter something. Has anyone come across a way around this?

By: Tony Rizzo

Tony Rizzo — Mon, 23 Jan 2012 14:42:48 +0000

Primary Tools Used to Measure Branding and Marketing … no mention of ROI? Seems to me that if you want marketing credibility in the boardroom, one needs to report returns like a CFO.

By: Editor

Editor — Fri, 20 Jan 2012 16:48:38 +0000

@Steve – Similarly, when asked to rank their biggest challenges in 2012, financial marketers put “inferior product/fees” at the bottom of their list, with only 8% citing it as a concern. Ask consumers that same question, and I’d bet nearly 70% would say inferior products/fees were a major issue.

By: Steve Bieber

Steve Bieber — Fri, 20 Jan 2012 15:11:23 +0000

Offering profitable products checks in way down at #8 on the priorities list. That might make a few Presidents and CEOs cringe!

Great study. Thanks for sharing.

By: Editor

Editor — Wed, 18 Jan 2012 18:54:53 +0000

@Shirley – The problems stemming from core systems is a huge issue. I can’t count the number of times I’ve proposed solutions to banks and credit unions only to be told, “Nope, our system can’t handle that.” No one likes system conversions, but with the pace of change in the industry today, financial institutions almost need a full conversion every 4-5 years.

By: Shirley Baunach

Shirley Baunach — Wed, 18 Jan 2012 17:56:52 +0000

@JimMarous This is a very good article. I believe one of the biggest challenges banks have is customer perception that it doesn’t cost any money to run a bank. To the contrary it costs a lot of money to provide the services banks provide and customers love. I believe the top priority should be to build customer trust and to create awareness among the population that banks are a critical part of our lives and they provide a great service by protecting our money and making it available 24×7. With all the regulatory changes, Banks have to find a way to make up the revenue they were use to for so long. Banks will have to start charging for each service they provide and customers are not going to be happy. Therefore marketing efforts should be focused on the value of our bank and credit union.

The other challenge as stated in the article is that most of the major banks are working on 20+ year technology that requires millions of dollars for the smallest change. This wastes stockholder dollars. Investments need to be made in more modern – core banking platforms that will create a more agile, flexible environment.

Regards,

Shirley

By: Mike Lawson

Mike Lawson — Wed, 18 Jan 2012 17:30:52 +0000

Fantastic study, Jeffry. Enjoyed the “utilization of marketing vendors and suppliers” and “primary tools used to measure branding and marketing” slides the best. All very telling and useful data.
Well done!