How Banks Can Avoid Customer Anger from Uncoordinated Marketing

Lack of internal communication is very common in bank marketing, leading to annoyed customers and lower conversion rates. Greater use of first-party data, an objective evaluation of organizational structure and improved analytics will reduce both waste and the potential for customer churn.
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You receive a promotional email for a credit card with an offer to open an account. You already have three credit cards, so you decline the offer and unsubscribe.

A week later, the exact same offer shows up as mailer in your physical mailbox. It feels a little invasive — and annoying. Didn’t you just unsubscribe?

This scenario is extremely common. It’s the result of siloed work and a lack of internal communication on the part of the marketing staff at many financial institutions.

At larger institutions different forms of promotional content are typically managed by different teams, each reporting to their own bosses in their respective departments. So when a team manages and reports on its program, they’re often interacting with the same customer as the team next door — but not in concert.

Additionally, when a consumer signs up for a card or banking account online, their physical mailing address may not be tied to the profile. This means the bank or credit union recognizes the person’s physical address and their online profile as two separate customers.

Marketing Overlap Is More Than Annoying

If a consumer isn’t interested in signing up for a new credit card or bank account — especially if they have already said “no” — financial brands risk more than just annoying the person. Considering that one in three customers would leave a brand they love after just one negative experience, according to PwC, bank marketers need to be cautious before sending promotions to either type of mailbox.

Consider also that direct mail offers are expensive. They typically use high-quality paper, more extravagant packaging and colorful fonts and images to stand out. While that may attract attention, it also generates more waste — something else that annoys many consumers.

You don’t need to stop sending mail offers entirely. Direct mail can actually deliver great results — but it has to be done right. Leaving a good impression on every consumer who encounters your brand should be a top priority.

Siloed marketing teams still using spreadsheets to manage customer lists and offers may be causing more harm than good. The issue isn’t just the result of inadequate internal communication, though. Here are three steps to avoid wasted and harmful marketing outreach.

1. Use First-Party Data to Diversify Strategies

First-party data should be the foundation of all bank marketing strategies — and the good news is you’re probably already collecting it. If someone is a customer of Bank A, the bank should know who they are and that their physical mailing address and digital presence both belong to the same person. If they don’t, then that lack of internal communication should be a top priority.

In the case of Bank B, where the person is not their customer, the institution doesn’t know anything about them. Bank B needs to create an additional strategy to learn more about the potential customer.

Not Just Conversions... Data:

Rather than thinking in terms of campaigns, think in terms of building future relationships. That requires capturing prospect data at each interaction.

Here’s one possibility: Let’s say Bank B has a partnership with a sports team. They could easily send an offer for a themed card to individuals who follow the team on social media. While this could help them reach their click-through and new card sign-up goals, the strategy doesn’t provide a “next step” for getting to know more about the users who actually view the offer. Maybe one of those customers just wasn’t interested at the moment, but would be in the future.

Instead of viewing your bank’s strategy from a campaign standpoint, see it as building relationships and acquiring first-party data. Create a record for each prospect with information that stems from your interactions with them.

This goes beyond a marketing offer. If a potential customer speaks with a customer service representative, and the rep discovers the customer is a fan of a specific sports team, the representative can add this information to their repository. This not only makes for good small talk, but also provides more context for the individual customer for future reference.

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2. Rethink Your Organizational Structure

Does your bank or credit union house disparate teams that are working toward the same goal? If the answer is yes, you should consider an evaluation of that arrangement. To have the assessment be objective, you many need to work with a third party who can evaluate what’s working and what isn’t regarding tools, processes, governance and structure. Done right, such maturity assessments yield insights about misalignment in goals or other issues that hinder internal communication.

With a better understanding of where things stand, bankers can make adjustments to the structure of their organization. This can be difficult when an institution has operated the same way for years, but it’s a necessary step for helping the bank or credit union adapt and keep pace with competition.

3. Evaluate and Refine Marketing Spend

Take a critical look at your spend for offline acquisition versus online acquisition. If you can’t give a data-backed justification for your spend on either, it’s definitely time to re-evaluate. It’s often the case that organizations can’t provide a clear picture of their ROI for these channels because of overlap and miscommunication.

Reconciling customer data may seem like a daunting process, but it’s a valuable investment that ensures you aren’t doubling up on marketing efforts.

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Don’t Abandon Direct Mail

Some marketers may wonder at this point if they shouldn’t just simply concentrate on digital marketing. It’s true consumers are tired of sorting through piles of credit card mailers. But that doesn’t mean banks and credit unions should stop sending them entirely. Rather, they should be strategic in who they target and how they target them.

The lack of internal coordination discussed above leaves mail campaigns far less optimized than they should be, however. With the number of sent mail promotions back to pre-pandemic levels, financial institutions need to develop a strategy that aligns with their goals and organizational structure. As indicated earlier, direct mail can deliver great results.

In all marketing, if you focus on building relationships with potential customers — rather than just focusing on conversions — you can create a repository of first-party data, build a loyal customer base and improve your bottom line.

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