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.”

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.)

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.”

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.

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