Want to justify your Marketing budget?

A new J.D. Powers & Associates report on shopping and switching rates can not only justify your Marketing budget, but it should also put you on the offense ... and defense.

Here are the highlights:

• 8.7% of customers said that they switched their primary financial institution in the last year (up from 7.7% the previous year)
• Shoppers consider 1.9 banks while shopping (up from 1.6)
• The most common reason to switch is life circumstances
• Advertising/awareness & convenience drives their decision
• Less than half (43%) of customers who purchased an additional banking product did so with their PFI

So what does all this mean?

Go on the Offense

We've been saying it for about 2 years ... their is money in motion! People are switching financial institutions. You need to be in the 1.9 institutions that they consider.

Life Stages: You can differentiate your institution and speak directly to your customers needs through life stage messaging. Click here for more life stage information.

Get them to know you: Awareness drives consumer's decision ... and you're in the awareness business. Use your budget wisely and be on the radar of those folks most likely to be your best customers. Use segmentation and mirror modeling to locate your best opportunities - then focus your budget on them. You likely can't battle Chase, PNC, Wells Fargo and Bank of America dollar-for-dollar. It's not about getting EVERYONE to know you, it's about getting the right people to know you.

Go on the Defense

We can no longer assume that our PFI customers are safe or loyal. Assume that less than half of them will come to you for their next product and more than 8% of all your customers are looking to leave. Pretty scary stuff huh?

Focus on cross sells, strategically bundle your products and focus on your team's training - are they prepared to facilitate the customer conversation?

Not to be a fear-monger, but this report should both scare you, energize you and justify the importance of marketing now, more than ever. Share this with your management team and show up prepared with a plan based on ROI.

Good luck and take care,

Eric

The Missing Piece For Consistent Cross-Sell

Cross-selling is a popular tactic used at every bank and credit union. Most financial institutions have developed a strategy and created tools to encourage cross-sell, but process shouldn’t end there…

Engaging and motivating employees is the activation piece that is crucial for long-term success. A good place to start is developing acknowledgement and/or rewards for cross-selling or referring. Rewards should commensurate with the profitability of the product or service to the bank.

In order achieve staff buy-in over the long-term, consider involving staff in developing the campaign or promotional ideas that will promote cross-sell. Involving employees in this process will give them a chance to understand the complexities of the product, rules, regulations and compliance issues. Also, getting staff involved early can provide you valuable feedback into the sales process that may provide insight on how to better target customers.

You can also keep cross-sell top-of-mind by ensuring continuous coaching to understand customer's needs and consistently share progress reports towards a goal.

Best,

Jamie

Competing With Internet Banks

We recently completed an RFP to rebuild a website for a prominent internet bank. Folks, if you're not including these banks in your competitive review, you should be. In a 2010 Forrester study, 2 major internet banks (USAA & ING Direct) ranked 2 & 3 (only behind credit unions) in "trust" when 4,500 banking customers where asked to rate institutions against, "My financial provider does what's best for me. not just the bottom line."

(I'll touch on this again in our FREE Brown Bag webinar on Friday, Sept. 17th)

For the internet banks, the website is everything ... it's their entire branch network, their sales force, their marketing material, etc. You need to be looking at your website in a very similar manner:

• Is your site easy to navigate? Can a customer get to where they need to be in 1-2 clicks?
• Do you make it easy to transact business?
• Does your site allow for an engaging customer conversation? You can accomplish this with online chat, but also with well thought out FAQs, Benefit oriented product bundles, video learning, electronic or personal follow-up to online triggers or forms, etc.
• Is your product information benefit oriented? How can you take product information beyond being an electronic brochure?
• Does your site cross-sell?

In 2010 and beyond, customers are looking more and more to easy, online access. Especially if you're looking to diversify your 50-60 year old demographics with some 20-somethings.

Take a closer look at your website as it relates to the questions above. How does your site stack up against the major online banks? 2011 may be a time to invest in some web enhancements.

Take care,

Eric

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The Little Things Matter...

In today’s economic climate, many financial institutions have reduced or even slashed their marketing budgets. That’s why, now more than ever, it’s imperative that we make the most of every customer communication to ensure customer retention and cross-sell.

When it comes to customer retention and cross-sell, many marketers immediately think “On Boarding.” And while On Boarding is and essential step, we also need to review ALL customer communication messages (including operational messages) that our customers receive…because, as you know, every customer touch point makes up the customer experience.

If you haven’t reviewed your operational communications in a while, it may be time to take a second look. Make sure they reflect your brand and see how you can leverage the communication to encourage customer retention or cross-sell, instead of sending a strictly operational message. For instance, a simple message confirming that a new account is set up for Online Banking can transition into a cross-sell opportunity for Bill Pay or Mobile Banking.

A good place to start would be to review the following:

• Dormant Account Letter
• Loan or CD Renewal Letters
• Overdraft Communications
• Debit Card Communications
• Online Banking Confirmation Communication

Remember to get creative! By adding a marketing perspective to these letters, you can create a large impact on customer retention and cross-sell without incurring additional costs!

Best,

Jamie

Focus on the Customer's Life Stage

I recently saw an email list-serve question concerning "Profiling Scripts" that bank staff can use to look for "hidden clues to better help customers."

Since it costs an average of about $500 to acquire a new customer/member and about $50 to retain and grow the relationships, this is a great idea, however, I really don't believe in scripts.  I feel that our staff come across as more sincere when they use their own language (maybe go with "Talking point", but scripts scare me).  Better than a script, is to make sure your staff uses YOUR institution's products as much as possible.

"I use our online banking and it saves me so much time," is significantly more believable than, "We have online banking and I hear that it's really easy to use."

More direct to the profiling question ... we recommend that our clients focus on the customer's Life Stage.  I believe that we can make educated product assumptions and recommendations based on what life stage a customer is in.  For instance, a customer with a new baby on the way is experiencing all of their life priorities changing.  Now, they likely have needs that they never considered before, like: college investments, an auto loan for a larger vehicle, life insurance, and a consolidation loan to lower monthly payments.  Think about it: marriage, birth, new home, new job, lost job, divorce, death in the family -- all require specific financial needs.

We actually create sell-sheets for our client geared towards those customers experiencing specific life stages and tie the life stage to key bank products.  The staff can then speak to the sell-sheet (like they do with your current product sheets/brochures).

More and more, we're going to be forced to focus on the customer and look at banking through their eyes.  I'm sure our blog readers would love to hear what YOU'RE doing to "profile" customers and better meet their needs (I know that I would).  Please respond to this posting and share.

Happy trails,

Eric