Speak to a community bank marketing exec today, and you’ll
most likely hear about how their customer base is “graying out” — aging, dying
— and how the substantial deposits of those customers is leaving the bank. And
they’ll also tell you how they are struggling to attract Millennial and Gen Z
consumers against the ever-growing wave of megabank marketing and fintech and
neobank competition.
Compounding the problem, younger consumers tend to have
smaller balances than the older consumers, so replacing a single older customer
might require winning multiple younger ones. At the same time, the top six
megabanks are winning the vast majority of these younger consumers. In fact,
Bank of America alone is winning a third of them.
Community financial institutions — even those with assets
well into the billions — don’t have marketing budgets that get anywhere close
to those of the megabanks. They also can’t compete on a national scale, with
the custom-built technology of fintechs, or with the sheer pervasiveness of the
megabanks’ branch networks. So how can community banks and credit unionsstand
out as these trends accelerate?
Three words: Define your niche
The trick is shaping and defining a niche in which you can
stand out. Much has been written about the niche approach. It doesn’t require
rethinking your entire brand, just your messaging — but landing on the right
message and niche is difficult. Fintechs and megabanks use data-driven
approaches to understand what the market needs and how to stand out. Even
without a data analytics team, community banks and credit unions can take a
similar approach. It all starts by leveraging an asset that only your
institution already has: your first-party data.
Let Data Drive You, Not the Other Way Around
The goal is to find out why the Millennial and Gen Z
consumers you have chose you. This starts by finding similarities among them.
You have rich demographic and transactional data already in your core system.
From that, you can recreate the journey those customers took to find and grow
with you with a few key steps:
Data analysis and segmentation. Start with broad
brush strokes — collect data on your customers under the age of 45, for
example. Pull the data — from your core, mortgage, card systems, and more –
into an analysis tool like Tableau or PowerBI.
Piece together their journey. What were their
starting balances with you? What product(s) did they start with, how long have
they been with your institution, and how have their deposits or products grown
in that time? Where do they live, how did they learn about you?
Focus group/surveys. Reach out to a representative
set of these customers — say 5% to 10% of them with varying balances and
products and time with your institution — and interview them to understand
their sentiments about you. Offer a gift card to a local business in exchange
for their time. Find out, in their own words, what led them to you and why they
stay with you. Find out what more they want from your institution, whether that
be technologies, features, services, etc.
Demo and third-party data analysis in your area. Now
look at your wider area, not just your customers, and understand the trends.
What are the major industries in which younger consumers work, where do they
live and commute to, etc.? (You may have some intuition of this — but back up
that intuition with real data.) Look from the digital data perspective as well:
What are Google search trends in your area, popular Facebook groups, etc. Look
into digital data analysis tools, like tracking pixels on your website that can
tell you what your current audience indexes highly for versus the general
population. For example, are visitors to your website more likely to want a
certain car, have a certain credit score, etc.? This can inform your messaging
and targeting.
Competitor research. What are your closest
competitors doing, both in the physical and digital worlds? Keep an eye on
everything from physical signage (bank marquees, billboards) to digital trends
(what other institutions show up when you Google “checking accounts near me”).
Psychographics — interests, desires, ambitions, fears.
With an understanding of the data points of your current customers, you can
begin to piece together their personas in more detail. You understand their reality,
now put yourself in their shoes to understand what motivates and drives them.
For example, are they most concerned about the long-term future, or buying that
home in three years?
With all this data in hand, document it via persona mapping
diagrams and customer journey diagrams. These will provide you easy reference
points to the material in the future, rather than sifting through dashboards,
reports, and spreadsheets of data.
Find More Like-Minded Customers
Collecting and analyzing the data isn’t easy, but the
rewards are big — you’ll out-message and out-target your closest competitors.
But once you’ve collected the data, built new data-driven personas and journey
maps, you can shift your focus to actually finding consumers with similar
profiles and reaching them with precise, specific messaging.
Data should inform your tactics (the best places to reach
the prospects you want), your message (what you actually say in your ads to
stand out), and the experience you build (what happens when they engage with
your ad). But now you can rely on your intuition and marketing skills to start
building those messages and experiences.
In today’s digital world, if a consumer is engaging with
your ads and landing pages, keep in mind that simultaneously, they are engaging
with your competitors’ ads (including Bank of America’s!) and landing pages as
well. Your interactions and experiences at this point must match up.
This isn’t about having a “cooler” landing page than a
megabank, but it is about making sure an ad promise doesn’t dissipate on your
website. You could have the most effective ad in the world, but if the landing
page it leads to doesn’t work on mobile phones, you’ll immediately lose 70% of
your traffic or more. So follow through. Remove frictions to any interactions
with you.
Leverage Marketing Technology, Strategically
You don’t need custom-built marketing technologies like the
megabanks have. There are thousands of marketing technology companies with
which you can piece together a tech stack to accomplish anything the megabanks
can do. A few key areas for community banks and credit unions to look into are:
Analytics tools for audience insights. Above, we
mentioned tools that can be used to pull all your marketing data into one
place, and run analysis on it. These are great for more manual analyses — that
lead to persona development, journey mapping, and strategic planning. With the
manual approach, you can get insights that will impact your next 6-12 months.
With an analysis tool stood up, you can also repeat the analysis on a regular
basis, say quarterly, to see how your marketing efforts are actually impacting
your institution’s customer base.
Example technologies: Tableau, PowerBI.
Marketing databases. There are many technologies out
there today that can replace the aging MCIF. A marketing database can ingest
data from your core system, provide real-time insights and help you onboard
that data digitally for retargeting and lookalike prospecting.
Example technologies: Amazon Web Services, Azure, Google
Cloud, Merkury.
Real-time personalization. Analytics tools inform you
about your audience, but you won’t be able to do things like real-time
personalization of your website or ads. You have a better understanding of your
customer base, but not of the individual customers. Building a real 1:1
marketing database can help you build a personalized experience on your
website, in the teller line, at the call center and online chat. This is a much
bigger undertaking than just dumping your data into an analysis tool, but one
that pays off in the long run in terms of providing better customer service.
Example technologies: Pega, Salesforce, Tealium.
Marketing automation. This is the first marketing
tech area many banks and credit unions invest in — allowing you to build and
orchestrate campaigns (typically cross-sell) across email, direct mail, digital
advertising and more. Your investment in a marketing automation tool will be
greatly enhanced if you also have a marketing database and analytics tool as
well, because you can create automated campaigns with more relevant and timely
insights.
Example technologies: HubSpot, Unica.
Analytics tools for marketing measurement. There are
also separate tools that can help you with attribution and ROI measurement of
your digital and offline campaigns — informing you what’s working and what’s
not. You need to move beyond the click. It’s often the case that exposure to
many different types of ads is what gets a person to finally open an account.
Your direct mail piece, by itself, may not have led to any account opens,
because many people today might receive the mailing and then Google you, taking
action online and throwing the postcard away. But receiving the postcard was
actually a key step in their journey. A measurement tool will help you
understand these trends.
Example technologies: Google Analytics, Adobe Analytics.
You can’t directly outcompete BofA in your area, but you can
outcompete BofA with a subset of customers in your area. Trying to reach your
entire area means your budget is spread thin and your message is more generic.
It will not be seen as frequently, and when it is, you’ll sound like all the
other banks and credit unions doing the same thing.
Using your first-party data to focus in on one or a few
subsets of the Millennial and Gen Z market will allow you to have a more
specific message that stands out. You’ll win a much bigger market share of
these subsets, even against megabank and fintech marketing — meaning a better
bottom line for your institution in the long run.
Click here for the
original article.