Banks Must Toss Meaningless Vanity Metrics That Don’t Sell

Ultimately what matters the most to your financial institution's results is not how good public reaction to your banking brand makes you feel but how good your brand makes customers and prospects feel. Think in these terms and results will follow.

COVID-19 has disrupted everyday life, generated massive unemployment, stalled markets and left many people worried about their financial security. In response, banks and credit unions have often turned to compassion in their messaging and customer outreach. On balance, this approach has not been, and will not be, effective. These messages are simply not resonating — either for lack of sincerity or for lack of competence. But financial institutions continue to leverage them because marketing managers and the executives they report to allow vanity metrics to dictate how they conduct their marketing campaigns.

In fact, we’ve seen that the brands which show competence in how we move forward are the ones that drive the greatest bottom-line impact. People aren’t looking to financial institutions for a shoulder to cry on during these difficult times, and they certainly aren’t turning to them for solidarity. They want a sense of security and the knowledge that their money is banked with institutions that are concerned with creating solutions to today’s problems.

Thus, demonstrating competence should be the primary motivation for marketers right now. But ineffective metrics and models lead them astray. Many marketing people and top managers put stock in measurements that don’t mean very much in practical terms.

Stroking Your Corporate Ego Doesn’t Help the Bottom Line

Take social listening. An ad which says “We’re all in this together” might seem like a good idea for generating impressions or engagements on social media, but it hardly convinces someone to sign up for a credit card. It lacks reassurance during crisis.

“How many times has someone made a negative post about a brand, or read a negative article about one, and still continued to do business with them?”

On the flip side, how many times has someone made a negative post about a brand, or read a negative article about one, and still continued to do business with them?

There is very little correlation between positive or negative social media sentiment and brand results. Yet, social listening is one of the most common vanity metrics — and using it leads to bad decisions. You have no idea if that sentiment is even coming from customers or prospects.

Furthermore, most social listening is just a revamped version of the Net Promoter Score (NPS) model. NPS is the hugely popular metric invented before the iPhone. Yet it has repeatedly been shown to have little or no tie to financial results, precisely because it is an indicator of how well you satisfy consumer needs but not how much your brand actually matters to people.

As stated in the Journal of Service Marketing, “Recommend intention alone will not suffice as a single predictor of customers’ future behaviors. … It cannot be recommended to use the Net Promoter Index as a predictor of growth or financial performance.”

Reach (another vanity metric) is like gasoline in a racecar. You need it to compete, but it is not a predictor of winning a race.

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Is ‘Brand Purpose’ a Better Metric for Financial Marketers?

This is where how much you matter to people, and a clear understanding of it, factors in. Brand purpose is one example where financial institutions typically score low when it ought to underpin much of financial institutions’ marketing efforts.

Many marketing veterans, however, feel that no one quite “gets” brand purpose. It’s commonly taken to mean that a financial institution has a strong charity program, cares deeply about sustainability, and communicates upstanding character. Of course, it can mean these things, but many times these don’t help set the brand apart.

Brand purpose is about providing a unique social benefit. It should be expressed through actions and genuine commitment. Take, for example, Toms, the shoe company, which donates one pair for every pair purchased, or RBC’s Future Launch which challenged traditional education and grew double digits since its launch in 2017 until COVID-19 hit the entire sector.

And we should note that brand purpose doesn’t always have to be what everyone would perceive as “morally good” or “obviously popular.” Mercedes-Benz, for example, trades in social currency. A Mercedes is an aspirational status symbol, and their marketing reflects this “purpose” of owning one. Chick-Fil-A closes on Sundays and has historically supported controversial issues. This may energize some folks and galvanize others, but no doubt their purpose is clearly centered around Christian values.

But a bank or credit union partnering up with charities to plant trees won’t cut it. Too many brands do things like that and you won’t matter to people much more for doing it — better to buy a portion of the Amazon to prevent deforestation, like Future Farms, the plant-based meat alternative maker in Brazil. Blanket statements around COVID-19 or racial justice won’t do it either.

A brand’s purpose should motivate and direct such actions. This is where financial institutions have a big opportunity to improve.

Read More: Google’s Vision for the Future of Bank Marketing, AI, and Data

Mattering to People Can Drive Results

Brands interact with consumers through functional, experiential, emotional and purpose attributes. These are the ingredients of brand equity. Banks and credit unions can excel at delivering on the functional.

“It’s not about how you market to people, but why you matter to people.”

Financial institutions invest heavily in creating positive experiences at the branch, and in mobile and online channels, but they are also notoriously hard bargainers, often losing the human element in customer interaction. This might be a side effect of operating such a balance sheet-driven business.

Some financial institutions, though, have found ways to break through and discover their unique purpose. North Carolina-based First Bank launched a powerful, purpose-driven campaign called “Dream it, Do It.” The campaign empowered people to realize their dreams, while raising the bank’s profile among people in the Carolinas. As a result of this image, First Bank has been one of the fastest-growing banks in America.

Consider this: In the end, it’s not about how you market to people, but why you matter to people. This philosophy recognizes that it’s consumer and business needs that dictate choices, and that banks and credit unions are competing on emotional drivers, not just the quality of their app or the specifics of financing.

This principal of customer needs applies across all areas of competing in marketing. Say you’ve come home — or rather, today, logged off and walked away from the desk — after a long day of work. You might unconsciously look across the brand landscape for a reward. You might pick up a Snickers and listen to a podcast while you walk around the block. Or you might scroll through TikTok. TikTok and Snickers are about as seemingly unrelated as two things can get, but both brands satisfy a similar emotional benefit, a moment of excitement. This is where they compete.

When one brand wins, countless others lose. This applies to financial institutions, too. The drive to bank with an ethical institution might overwhelm the logic behind slightly better credit card rewards, or lower overdraft fees. It’s purpose which brings customers in, and brands compete on purpose at large scale.

Reexamining How Your Institution Uses Metrics

To realize and properly quantify the value of purpose and emotional drivers, financial marketers need metrics that can be applied in direct relationship to financial performance. Using data sources and analytics that can help substantiate the efficacy of metrics across thousands of companies — brands will discover that purpose, along with a mix of other factors, is a traceable profit driver.

Better marketing metrics need to exist in real time, as well. If it’s going to be hot next week, brewers know they will sell more beer and can accelerate their marketing spending to boost sales.

“Knowing it’s going to be hot” is a real-time brand metric with a causal impact. This can also be done by understanding how much you matter to people this week versus last week. And from this perspective, it’s easy to see how such quality data are useful in both forecasting your brand’s value tomorrow and earning or retaining customers.

Most C-suites see their brand movement year by year, or quarter by quarter, but that isn’t nearly as actionable as up to date information. Managing brands deserves the same agility as managing other key factors of business success.

During COVID-19, such information would have allowed a financial institution to recognize that competence, not sincerity, was the right call. Real-time, quality metrics enable marketers to get ahead of the annual brand report and create tangible results.

It’s a unique challenge to define a brand. But when doing so, success should not be measured by feel-good statistics that don’t drive or tie to business outcomes. When a brand’s future value and customer loyalty are at stake, it’s critical to understand how much your brand matters to people every day, insights delivered by that information, and the principles of building brand equity through purpose, emotional or experiential attributes.

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