5 Ways Banking CMOs Can Reframe Unknowns into Opportunities

The Deluxe Mid-Size Bank CMO Exchange produced insights other financial marketers can learn from. COVID-19 has stretched bank and credit union CMOs and forced leadership teams to bring fresh thinking to the challenges that loom for 2021. The secret is to see challenges not as obstacles but as opportunities for growth.

I had the pleasure of hosting Deluxe’s quarterly Mid-Size Bank CMO Exchange in October 2020. The Exchange is a conversation with 15 CMOs from institutions around the U.S. Seven months into our new way of life, these executives were in the midst of 2021 planning, using what hindsight they’d been able to glean so far to envision all the possibilities for the coming year. As a CMO myself, I was eager to hear these talented marketers share their journeys toward planning for multiple scenarios in 2021.

It was a fantastic conversation. We covered a lot of ground, from our own organizational structures to digital customer experiences. I was inspired by their creativity and filled with admiration for their continued willingness to adapt.

If 2020 turned out to be a year of reactive adaptation, perhaps 2021 can be a year of proactive innovation. Here are just some of the ways Exchange members have recognized the challenges and limitations of 2020 and reframed them as opportunities for 2021.

After all, if this year has shown us anything, it’s that we have fewer limits than we think.

1. CMOs Are Rewriting the Rules of Attrition and Acquisition

Within the first few moments of our call, many Exchange members shared that their institutions have seen dramatically reduced attrition levels as a side effect of 2020. The group was eager to discuss how their colleagues were reevaluating their acquisition tactics as a result.

“We’re seeing our attrition levels at five-year lows,” one CMO explained, “but we’re also not bringing customers into the franchise at our target levels and certainly not at the levels we’ll need to achieve next year in order to achieve our revenue targets.”

Leading up to 2021, this individual is thinking about what their bank will do differently, and in which areas they will increase or decrease marketing activity: “There are some obvious ones to me — like customer bonuses will have to increase, direct response marketing efforts will have to increase — and then non-obvious ones we’ll reduce like corporate sponsorships and hosting or sponsoring in-person events.”

These attrition trends have also prompted CMOs to reconsider the true cost of incentives. One CMO, who shared that their institution was doing “surprisingly well” in household acquisition, was reviewing new customer incentives, especially in light of national banks entering local markets: “When we actually looked at how much money we were paying out in incentives it really wasn’t that much. And so we’re thinking about making the offers a little easier next year and seeing if that will help us.”

2. They’re Shoring Up Relationships Further Down the Funnel

Talk of acquisition naturally led to the topic of retention and account growth. With fewer customers leaving their banks in recent months, our group of CMOs turned the simultaneous slowdown in new account openings into an opportunity to fortify relationships with existing customers. Exchange members agreed that by focusing on client services and cross-selling, banks can create buffers to help them weather tough times and come out thriving on the other side.

For many, it’s a lesson that’s proven true again and again, not only in 2020. “Whenever there has been some sort of significant recession or something impacting the economy … two or three years after the fact, we’ve always come out of that being pretty solid and bigger than before,” said one CMO. “I think that just comes down to building the relationships in the communities where we are. And I think all of the banks on this call are similarly positioned to do that. It’s scary to try to take that approach, but we’ve got to have the faith.”

Another CMO cited a recent example at their institution. Following initial shutdowns in March, “we shifted like everybody else away from the top of the funnel” and channeled those resources into getting more business from existing customers. “We actually launched two major promotions to re-engage our branch network and not wait for things to happen.”

As a result, their bank was able to “take a much more proactive approach to getting business going again here starting in July.”

3. They’re Meeting the Moment of Digital Acceleration

As a result of widespread shutdowns in early and mid-2020, more banking customers are making use of online tools than ever before. For the first time, CMOs are no longer stuck imagining what they’ll accomplish if or when enough customers use digital banking — instead, the conversation has shifted to what to do now that they are.

One CMO saw about 15% of accounts coming through online channels prior to COVID-19; that number has since jumped to 30%. Initially, they assumed it was due only to the shutdown of physical branches — “When you take your branches down, it’s pretty easy to get to those numbers” — but even after branches reopened, “those numbers have kind of stayed. Digital acquisition worked out well for us.”

It’s been a tremendous shift, one that seemed years away back in January. But as we approach December it’s time to think about creating frictionless online and in-app customer experiences. In 2021, this may even be the most effective way of harnessing those existing relationships and encouraging growth via cross-selling.

When our CMO Exchange members meet again, at Deluxe Exchange in Q1 of 2021, I’m looking forward to hearing more about how these talented marketers have optimized their mobile “branches” to prioritize customer experience for long-term loyalty.

4. They’re Not Letting Year-Over-Year Comparison Hold Them Back

“Always be prepared” was good advice back in scouting, and it’s especially good advice in 2020, when we all saw meticulous annual plans fall apart in a matter of days.

The truth is, there’s no way to futureproof with one perfect marketing plan, so Exchange members are mapping out a wide range of potential scenarios and corresponding budgets. (In some cases, literally. One shared that they had to submit two budgets: “Hopefully in a month I’ll know which one they’re going to take.”)

One Exchange member cautioned against assuming business will be back to usual in 2021, and stressed the importance of flexibility, both on their immediate team and throughout their institution: “Let’s try to look at all angles and aspects. Be flexible with a line of business on what their goals are.”

A second CMO explained why they would be “making a really strong case” for zero budget cuts: “We’re assuming attrition remains at a dampened level … and we’re setting our new customer acquisition level in line not quite at what we used to see back in 2018 but almost normal levels.” Despite this reasoning, “I don’t know if I’ll be successful in saving those funds.”

And in yet another approach, a third CMO described their current 2021 budget plans as a “haircut”: “We’re approaching 2021 budgeting as looking at where we were hoping we would be with 2020 and then really carving out, starting with 15% and seeing where it goes from there with the business lines. That’s been the healthy exercise.”

While these strategies differ in their approaches, they are all tempered with one universally accepted rule: “Business as usual” probably won’t return in 2021.

5. They’re Seeking Out Partner Agencies That Are True Partners

As CMO of Deluxe, I’m both a provider of marketing data, analytics and campaign services for other companies, and a client of external agencies. So I was particularly interested to hear my colleagues’ perspectives on how they structure their internal and external teams to meet their complete marketing needs. Several of their institutions employ a hybrid model similar to what we have here at Deluxe, where internal marketing managers work with product line managers across each product to define needs; externally, agency partners help execute the campaigns that bring those strategies to life.

As one CMO put it, that kind of internal structure “keeps the whole customer view in mind as we think about all the channels and … we can sell the whole bank.”

When it came to external marketing providers, the group’s biggest questions revolved around agency accountability as it pertained to flat-fee versus performance-based payment structures. As both a client and a vendor, I’ve often asked this same question myself.

At Deluxe, as we look to partner with banks, and we’ve begun employing pay-for-performance models in addition to traditional models. Having skin in the game ensures that the data-driven marketing products we develop for our clients make sense.

I’m thankful to have been a part of the quarterly Mid-Size Bank CMO Exchange. These savvy marketers help me understand the pulse of the industry and ensure my team is keeping up. If this sounds like a group you’d be interested in joining, or you want to learn more about Deluxe, reach out to me. We have about 30-40 CMOs on the Exchange at any given time and do selectively add CMOs.

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