Banking is undergoing some of the most sweeping changes in its history and financial marketers are in the thick of it. The challenges their institutions face from fast-moving, tech-savvy competitors are putting enormous pressure on Marketing.
At the same time, technology is providing greatly enhanced marketing tools and many more options. Used effectively, these can enable bank and credit union marketing executives to accomplish more and be far more precise and accountable in what they deliver. This is helping to raise the profile of a discipline that used to be considered more art than science.
“Marketing is completely different now,” says Steve Hildebrand, SVP Marketing, Freedom First Credit Union, Roanoke, Va. “Marketers have to be scientists, innovators and creators. We need to be well versed in psychology and technology. We need a mathematics degree and an English degree. We need to innovate and cultivate.”
Hildebrand was one of several financial service marketing professionals The Financial Brand caught up with just ahead of The Financial Brand Forum. The credit union executive believes the marketing department in many instances is instrumental in reshaping customer experience as banks and credit unions further embrace digital transformation.
“In the past, I cannot even imagine discussing a ‘customer journey’ with an EVP-level company official.”
— John Hanley, Equity Bank
More evidence of a changing role for financial marketing comes from banker John Hanley, SVP and Senior Director of Marketing for Equity Bank, Kansas City, Mo. “Historically CFOs or management have looked for a direct, apples-to-apples return on investment. For example, ‘If I run this rate ad, what is the delta above normal traffic?’ That is changing. Recently I was asked by our CFO to give a presentation showing the correlation between ad spend across channels and account traffic. In the past I cannot even imagine discussing a customer journey or customer experience with an EVP-level company official.”
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Bigger Marketing Role Brings Greater Focus on ROI
While increased budgets don’t automatically accompany a higher profile for Marketing, sometimes that is the happy result.
That was the case for Rina Johnson, who says that over two years her marketing budget at California’s Patelco Credit Union has increased 100%, including 50% in 2018. This was due, says the Marketing VP, to the higher value the $6.7 billion-assets organization now places on marketing activities. With that recognition, however, comes “a lot more accountability,” says Johnson, who is Vice President, Marketing. The most important thing is that Marketing be able to truly show results in membership growth and engagement. At Patelco, her team has been able to do that, growing membership 6.25% in 2018.
About 70% of the large credit union’s media efforts are digital, according to Johnson, enabling each campaign to be precisely measured to determine Marketing’s impact. Having transparency and accountability for what’s working and not working has earned respect from the organization and boosted the morale of the marketing team, Johnson states.
“Finding the right balance between marketing expense to support new ventures and hard costs to grow the footprint is a tight line to walk.”
— David Finkelstein, Bank of Colorado
David Finkelstein points out that at his institution, Bank of Colorado, Fort Collins, marketing budgets have stabilized after rising for several years, and that “the ability to show accurate marketing ROI is and will be a factor moving forward.” As the bank’s footprint grows, he adds, so do the hard costs associated with it. “Finding the right balance between marketing expense to support new ventures and hard costs to enhance consumer experience is a tight line to walk,” Finkelstein observes.
In Marketing as in Banking Overall, Size Has An Impact
It’s becoming increasingly evident that smaller financial institutions face constraints of budget, people, skills, and time. This impacts both their implementation of digital banking and adoption of advanced marketing tools.
Even though Stanford Federal Credit Union, Palo Alto, is large compared with many credit unions, it is about half the size of Patelco. And Stanford struggles to manage all the marketing channels “that are supposed to make marketing easier,” says Dana Tehrani, Vice President, Marketing and Business Development. Among the ones she ticks off are Google, social media, websites, direct mail, ATM screens, events, and email. Given the multiple demands of that mix, “there is little time to review metrics and strategize,” says Tehrani.
By contrast, John Oxford, Director of Marketing at $13 billion-assets Renasant Bank, Tupelo, Miss., is thrilled at what the new marketing technology can do. “The transformational power of digital marketing through content, connection and conversion has to be one of the top initiatives for any company,” he states.
Oxford is particularly enamored with original video content and has overseen a successful video microchannel deploying original humorous and locally flavored entertainment. The content channel has attracted more than ten million views in less than two years, according to Oxford, creating many marketing opportunities.
“The rise of digital content has allowed the marketer to move back into a more creative space in branding due to connection channels that can lead to conversion using digital which shows ROI. This is the perfect combo for both marketers, sales and accounting,” Oxford concludes.
Ironically, the strategy many community banks and credit unions are following to increase growth and earnings power — acquiring other smaller institutions — often results in a complex web of data and processes that takes time to sort out, hindering the application of advanced marketing tools.
“Like many financial institutions that have grown through a combination of mergers and organic growth, we’ve been left with data questions in terms of accuracy, access, and analysis,” says Equity Bank’s John Hanley. “This results in a challenge to provide reports, synthesize data from different channels, and make decisions either in real-time or in a forward manner.” Nevertheless, he emphasizes that instilling an information strategy and common language is necessary for banks that have grown rapidly.
“Data analytics is the key for banks in reaching some level of personalization in their marketing,” maintains Steve Elser, VP and Director of Marketing for PCSB Bank, Yorktown Heights, N.Y. “For me, this is an essential area of focus for the future.”
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In All The Data, Don’t Forget The Humans
Here and there in the rush to embrace all things digital, a voice rises out of the din to raise a counterpoint — adding a note of balance to what can sometimes seem a lopsided equation.
One example, and there are others, is Isla Dickerson, Director of Marketing and SVP for Bangor (Maine) Savings Bank. She eloquently makes the case that human beings are being overlooked in the financial services industry right now.
“We should be talking more about helping people achieve their financial goals and less about tech stacks.”
— Isla Dickerson, Bangor Savings Bank
“This industry is over-saturated and overstimulated by buzzwords, keywords, data-mining, technology advancements, mobile options, and digital must-haves,” Dickerson, a former Bank of America Division Head, states. “In all of this, humans and their relationship with money and their current and future financial needs are being overlooked.”
Continuing, the bank marketer says, “We should be talking more about helping people achieve their financial goals and less about tech stacks measuring their on-line interactions. To understand human behavior, needs and perspectives on banking and financial we should be having conversations with our customers.”