Many financial brands anticipate that marketing budgets will be shrinking and in some institutions that’s already happened. With budgets tightening, marketing teams need to make sure they’re spending their budget on the right audience. This means going back to the roots of marketing — understanding your target customer — and learning some lessons from the recent past.
It’s not enough to understand customer demographics. Marketers must also understand customers’ challenges and interests, their beliefs and values, and where they spend their time and money.
Here are five principles to keep in mind in the current competitive climate:
1. Trust is Paramount Now and Will Be
Consumers of all ages are going to look back on the COVID-19 era and remember how financial institutions treated their employees and the people they serve. A recent Vogue Business report found that young consumers especially want brands to be “transparent and collaborative” in their efforts to support people. Establishing a trustworthy and ethical brand is more important than ever. Consider the backlash some major companies have received for allegedly overworking their employees or price-gouging consumers.
No matter how strong your products are, and no matter how competitive your services, if consumers don’t like what your brand stands for, most won’t come to you. According to the 2019 Edelman study “In Brands We Trust?” nearly two-thirds of consumers said they buy based on their beliefs, and 81% said that “a brand I can trust” is one of their deciding factors for a purchase.
Corporate social responsibility grows increasingly important amid these challenging times. Is your brand making a difference in the community? Purpose before profit goes a long way. A study by Boston Consulting Group underscores that younger consumers especially expect companies to care about social issues and prefer to partner with brands that have causes that resonate with them. Everything financial marketers and their institutions do must be carefully vetted in light of this increasingly relevant factor.
PenFed’s charitable organization, the PenFed Foundation, aims to help members of the military and their families achieve financial stability. We do this by providing emergency capital through programs like our COVID-19 Emergency Relief Fund, and investing in military startups with our Veteran Entrepreneur Investment Program (VEIP).
Identify the causes and communities you serve and remember to maintain them at the core of every product.
2. Be Authentic. Efforts Seen as Insincere Will Take Flak
It is more important than ever to implement authentic marketing strategies in the current environment. Today’s consumer grows more and more critical of insincerity and a major misstep will see your brand roasted on social media and in the market.
When you cynically align your institution’s expressed beliefs and values to fit those of the people you serve simply to sell products and services, that approach will certainly backfire.
“Do good for the sake of doing good, not for getting good ink.”
Don’t be a phony. Instead, go back to your institution’s core, founding principles. Support your words with actions. Don’t consider philanthropy your publicity strategy; do good for the sake of doing good, not for getting good ink. Customers will take notice.
At PenFed, during the coronavirus crisis we followed this principle by partnering with the web-based “The Tommy Show” and local supermarkets in the Washington, D.C., area to give $50,000 in gift cards to the community to pay for groceries. We supplied hand sanitizers to the local fire stations and, along with the Red Cross, we co-sponsored blood drives in key locations nationally.
You can maintain consumer loyalty for a lifetime by getting to know your customers; working to understand their personal circumstances, challenges and values; offering them what they need; and keeping their information safe.
Read More: Financial Institutions Should Be Getting Their Marketing Game On
3. Listen to Your Customers and Home in on Their Needs
You shouldn’t assume that after years in a marketing career, you understand your consumers completely. Trends and needs change at the swipe on a screen. A good marketing team is always engaging with people to understand their needs.
“When we listened to what members needed at this specific time, we learned that they were most concerned about having savings.”
A strong example outside of financial services is Lululemon. When they started out in the late 1990s, they were a company that designed clothes for women to wear to yoga. Now, they’re a lifestyle brand with stores around the country that aims to promote fitness, health and self-care in an increasingly busy world. None of these enormous changes would have happened if the company hadn’t listened to customers and realized that they wanted more than just yoga gear.
It’s impossible to effectively help and educate your customers when you haven’t listened to them. With the onset of the pandemic, we had to be adaptable and willing to abandon our original plans to hear and meet current customer needs. When we listened to what members needed at this specific time, we learned that they were most concerned about having savings.
We have encouraged members to save by offering the Premium Online Savings Account with no fees and a high APY. We can also refinance their car loans at a lower rate to boost up member savings and offer them a $250 bonus just for doing that. We want to hear what members truly need to thrive financially, especially during times of financial crisis, and leverage products to meet these needs.
4. Hire a Diverse Team to Improve Your Perspective
It’s tempting to hire people who look and think like you. But you can’t afford to hire people who always agree with you. Diversity of genders, races, ethnicities, ages, economic backgrounds, educational experiences, thoughts, actions and viewpoints not only enables creative and original thinking, but can improve a company’s bottom line as well.
“The diversity of your internal team should reflect the diversity of your customer base.”
When you’re interviewing candidates, be willing to take a step back and reflect on how you personally define a “good fit.” Is someone a good fit because they’ll contribute something new to the team? Or are they a good fit because their opinions fit in with what you already have? The diversity of your internal team should reflect the diversity of your customer base.
At PenFed, we believe the first and most important step is making sure our team members share our values: Service, Innovation, Collaboration, Respect and Integrity. On my team, I look for both “skillset” and “mindset.” Does this person have the skills to do the job? Second, do they have the mindset to grow, learn and contribute? A humble willingness and desire to continually develop is crucial for team growth. Finally, seek to hire people smarter than you. Welcome opportunities to bring on team members who know something you don’t — it will help the team win as a result.
Read More: Banking Must Take A Stand On Tough Social Issues
5. Always Seek to Improve Your Game
There is no doubt the unexpected changes and unanticipated needs of the pandemic lockdown period and the head-spinning reopening period have challenged your marketing strategies. All of the thoughtful and thorough plans you set up for second quarter 2020 became null and void when the pandemic hit. Even the return to a “new normal” continues to be anything but.
“We were in the middle of our first big marketing campaign for 2020, and we had to pause and rethink on what we needed to do next.”
Like many teams, we at PenFed had to be willing to abandon certain ideas and plans to make room for current customer, employee and community needs. We were in the middle of our first big marketing campaign for 2020, and we had to pause and rethink on what we needed to do next. We recognized that we didn’t have all the answers, and we didn’t know what was going to happen next. But we knew we needed to have an open line of communication in order to adjust our business model and our marketing to what was needed at that point in time.
Adapting to fully remote work was a quick and challenging pivot, but our team learned that we can move mountains — and have fun in the process! — if we can trust each other. We found a new level of appreciation for our team members who were constantly working while balancing their needs as well as the needs of their families.
Unexpected recent events have made it clear we can’t get too comfortable in our practices. One of the most exciting — and challenging — aspect of the marketing function is that it’s always changing, because the customer is always changing. While considering the “new normal” is important right now, it’s also important to remember that today’s norm might not be the tomorrow’s.