The Brave New World of B2B Marketing - Are You Ready?

Your B2B markets are changing rapidly. It is now harder than ever for B2B vendors to get the attention of our audiences. The effectiveness of traditional push marketing is rapidly declining, marketing budgets and headcounts have been slashed over the last few years (while output expectations have increased), and the availability of new technologies for marketing automation is leaving many B2B marketing professionals scratching their heads.

Power Shift
Knowledge is power, and the balance of power is clearly shifting from vendors to the customer. B2B buyers are more sophisticated than ever. They educate themselves on the nature of their business problem, possible solution options, available vendors and products. Today's prospects filter out most attempts by companies to interrupt them with vendor and product focused marketing messages and sales pitches. As a result, many vendors don't show up on prospects' radars anymore - unless they are actively sought out, they are often simply not invited to the party anymore.

Adapt to Stay Relevant
Our entire approach to marketing has to change if we want to stay relevant and add value to the business in this new environment. While this situation can create a crisis in many marketing and sales organizations, it also offers a great opportunity. Remember that today's prospects are actively searching for high-value information to help them better understand problems and solutions, make sense of available solutions, select the best fit for their requirements, and ultimately make an informed purchase decision? Now imagine the information customers are finding is yours. Clearly presented, educating the reader along every step of their decision making process. With compelling content that is relevant, valuable, and of high quality. Remarkable content that leaves a lasting impression and engages the reader to take action such as requesting access to your Webcast or asking to get in touch with you to learn more about your solution.

Brave New B2B Marketing World
Welcome to the brave new world of marketing. This new world is at the intersection of (1) valuable content that carries your message to the prospect, (2) the social and online media that prospects are increasingly using to find information and ask peers for their opinion, and (3) the marketing automation platforms to manage all of this complexity (campaigns, content, leads, etc) without losing your mind.

This intersection of content marketing, social media, and automation is where innovative marketing teams can help their companies gain traction and develop ongoing relationships and customer engagements. I mention "ongoing" because I believe the days of linear, one-dimensional, time-limited "campaigns" on the marketing side and transactional selling on the sales side are for the most part over. The effectiveness of these traditional tactics is declining steadily, and if you are in the marketing profession you'd better pay attention because we are looking at nothing less than a fundamental shift in the way companies engage with prospects.

What we need in this new environment are ongoing, parallel conversations with target audiences that lead to engagements with qualified prospects which in turn lead to value exchanges between both parties. Content marketing is rapidly gaining traction as a truly customer centric marketing tactic that aims at educating prospects and guiding them along their journey towards an educated decision in your favor - exchanging their money for your solution.

Steps to Surviving the Transition - And Thriving in the New Marketing World
So while the idea is pretty simple, execution is not all that trivial in complex B2B environments. After my article on the 5 Steps to B2B Marketing Success, I was asked to provide more guidance on how to actually implement this new approach to marketing. So I have spent some time thinking about how to approach this new world of marketing and developed a simple 7-step framework.

Here are the key components of the framework that I see, and I will spend the next few weeks covering each in greater detail. Interestingly enough, the "new marketing world" will put more emphasis on traditional marketing concepts as they are now truly the foundation for the success of your business - so many of the concepts below will not be new to you. The focus of this article is on content marketing as I believe it to be one of the most effective approaches available to marketers today. Other tactics are still relevant and effective.

Here are the seven steps to B2B marketing success in this new era:

1 - Segmentation & Profiling
Sound familiar? While the concept is not new, the majority of B2B vendors do a poor job at properly segmenting their markets and identifying the most profitable ones they want to compete in. In my opinion, this step determines success or failure on a strategic level, as simple as that. Segmentation as a way to identify target markets that are an ideal fit and allow you to compete successfully while focusing your resources is the first step to understanding your strengths and weaknesses relative to the opportunities and threats in a market. Only with this knowledge will an intelligent marketing approach become possible. Profiling of ideal companies and everything else follows from here.

2 - Buyer Persona
After establishing your target segments at the macro level, and defining your ideal customer profile, let's look at the people within those target organizations that influence and make buying decisions for the type of products or services you offer. What are their roles, goals, motivations, frustrations? How do they impact the buying process? Have you mapped out buyer personas and built profiles in order to align your messages and content with their needs? Where are these buyers looking for information to guide their decisions?

3 - Buyer's Journey
Once we understand who we are trying to influence, let's take a look at their buyer’s journey, from status quo to ultimate purchase of a product or service. What stages do your buyers go through? What are the decisions or outcomes you want to influence at each step of the way? What messages and information do you want to convey? By the way, mapping your entire marketing approach to the customer lifecycle is one way to become a truly customer-centric organization and impact prospects behavior and decisions. More on this later.

4 - Mapping Content to Buyer's Journey
After understanding the world from our prospects' perspectives, let's look at how we adapt to it to better engage and provide value. In this section I will talk about classes of content that map to the various stages of the buying cycle. It is much less complicated than it sounds :)

5 - Content Planning & Creation
At this point, it is time to clearly plan what pieces of content you want to offer specific to your segments, audiences, personas, and buying cycle stages. If not earlier, by now you will likely have a panic moment, realizing that you would need to employ dozens of domain experts and writers to create all the content assets you have identified. Time to take a step back and think about smart strategies to re-purpose and leverage existing content. Perform a content audit to identify gaps and overlap with existing assets. Also, consider how you will make sure that your content is on message and consistent (this is not trivial when you have multiple writers) - for example, do you have message maps that capture your key messages, differentiators, value proposition and positioning - by audience and segment?

Now is also a good time to think about focus as lack of focus has consequences. The further you stretch your resources and attention span (and your understanding of your markets), the less impact you will have on any of your target segments and people, reducing your demand generation and conversion rates significantly. So prioritize and rank your markets, audiences and content assets, and cut back everything that doesn't move the needle, starting from the bottom of your list. Pareto would probably suggest that only 20 percent of your market segments, decision maker personas, content assets, and programs contribute 80 percent of your impact on revenue. Identify those 20 percent - remember the goal is to work smarter, not harder :)

6 - Content Delivery to Engage Audiences
Now that you have planned and created compelling content, how are you going to get it in front of your target audience? Are your buyers frequenting certain online communities, are they searching Google with specific keyword and phrases, do they subscribe to your newsletters? Here you have an opportunity to map out how prospects will receive your information and how you increase your odds of it actually happening. Do you hide all of your content behind registration forms? Do you set it free and make it easily shareable via Email, Twitter, Facebook? Are you building specific calls to action into your content to drive prospects to your next piece of content or interaction with you?

7 - Performance Measurement
With regular reviews of actual performance against goals, you can quickly identify areas for improvement, opportunities for resource re-allocation, process changes, and further education. Dashboards, as the "glue" between strategy and execution, can provide leading and lagging indicators and metrics to correct issues and take action before they grow into bigger problems downstream.

While this approach looks like a neat sequence of steps that can be planned and executed in a waterfall type of fashion, in reality things are often much less clear cut. In analogy to agile programming, we are looking at a highly iterative process that at each step needs to be tested, validated, and tweaked before moving on to the next step. Yes, this is messy, it requires a lot of "hypothesis testing". Don't listen to anybody who tells you they have all the answers already, they don’t. And worse, be prepared to repeat this exercise frequently as your external and internal environment is in constant flux and you will need to adapt. Start with baby steps, learn and improve. This will become easier as you develop frameworks on how to do this so you can build best practices and don’t have to reinvent the wheel with every iteration. Again, welcome to the brave new world of marketing.

Let me know what your experience in this brave new world has been so far. I will spend the next weeks to dive deeper into each of the 7 steps outlined here, and I would like to incorporate your ideas and best practices. So send me your feedback using the comment feature below or send an email to hhschulze@gmail.com.

Commencement

In every town in every state, this is the season for commencement speeches. In the next 2-3 weeks, hundreds of young adults in your community will begin new lives ... some moving away from home for the first time ... many to begin writing checks for their first bills ... still others facing larger investments like college and new cars.

So, lets look a little closer:

• Young demographic
• No current financial institution
• An immediate need for checking
• Soon to have lending needs
• Psychographically loyal if treated right

Sounds like a dream customer, huh?

But how do you reach this target?

Let's first look at their needs:

ACCESS

First and foremost, they demand access. As they are likely to be leaving your community in the next 2 months, focus on online and ATM access.

COMMUNICATION

This is not your average 50 year old member. If you want to make an impression, talk to them the way they talk to each other ... text and email. It may be hard to acquire them through these means (I'll talk about an acquisition strategy in a minute), but once you have them, make plans to continue communication electronically.

EARN TRUST

This may be the smartest banking generation yet - but the bottom line is that they need guidance. Odds are that their parents don't balance their own checkbooks on a regular basis. So, as community banking institutions, we have an opportunity to tutor. Focus on financial education ... help this demo build a budget ... show them how to use online banking and debit cards to track every dollar that they spend ... demonstrate how borrowing money from someone you know is better than borrowing online (this may be a tougher sell than you think).

Target to the Right People

Many community banks and credit unions try to target students by, well, targeting students. But studies show that many Millennials start their banking search by going where Mom and Dad bank. The fact is that Mom and Dad will be the best influencers you have - and they're easier to reach. So, think about Mom and Dad's wants for their children:

• Access: The kids will be away from home
• Security: not the FDIC or NCUA variety, but some control over Jr's spending
• Peace of mind: By co-signing on an account, you can tie the parent's account into the student's. This does 2 things:

A) Mom and Dad can track spending with online banking

B) There's a safety net. If the student's account falls low one month, the parents can easily transfer money through online banking.

As the commencement speeches are wrapping up, you can commence opening their new accounts and earning the loyalty of a new generation.

Good luck,

Eric

The Wave of Indifference

It seems that every company wants to focus their marketing message on providing, "outstanding service."

Yet most places we go, we're met with a tidal wave of indifference.

Seriously, it's when you're helped by someone with a personality that the service really stands out. That's a bit sad.

Shop

Take a day and shop your competitive branches. Trust me, it'll be eye opening. Besides, the weather is beautiful this time of year and it'll give you a reason to get out of your office.

Simply ask the first employee you see about checking accounts and see how they handle it. Do they ask you leading questions that will help them make a recommendation:

• Where do you bank now?
• What do you like about your account?
• Why do you want to change?
• What kind of balances do you carry?
• Etc, etc, etc

Or do they simply hand you a brochure and say, "If you have any questions come back and see us."

You'll quickly find out which banks or credit unions will be climbing the market share ladder and which will be sucked under the wave of indifference.

Training

When I speak on this topic, I love to use a Disney example and you can too.

Last summer I took our family to Disney. My 5 year old daughter wanted to see Sleeping Beauty. That's all she had talked about for months and we finally were there. We drove for two days to get there in a van who's A/C broke as soon as we hit the Florida border. We were at the park on the hottest day on Disney record ... 115 degrees - no exaggeration. We paid a king's ransom for the privilege of baking in the "Happiest (frickin') place on earth." By lunch, my 7 year old son was actually crying, "Don't make me go back out to Disney." But we hadn't seen Sleeping Beauty yet. When it was her scheduled time, we waited in line for about an hour and a half and finally came the moment of truth...

Now, imagine if Disney staffed their parks with the same employees that ride the wave of indifference. And how upset my daughter would have been and how I might have actually strangled someone.

The reality is that Sleeping Beauty and all of the other princesses, in heavy gowns and full make-up during the hottest day of the year, where exceptional! They all were on stage and they all brought their "A" game. It made the entire experience worth while and the rest of day quickly became MUCH better - especially when it cooled down.

The point? All of your employees are on stage. And there is no way of telling what trials our customers had to face to get to our branch on a given day. We need to jump off the wave of indifference and drown our customers in positive feelings. Smiles, sincerity, and an honest attempt to help. It's really not that hard, but it's also few and far between.

Do you want to differentiate your bank or CU? Spend less time worrying about checking rewards and focus on the faces and voices that customers deal with everyday.

Happy Friday,

Eric

Is Your Business Leaving Money On The Table?

Don't Forget Search Engine Marketing and Optimization!

Many marketers and business owners think they're doing everything they can to get the word out about their company. They allocate their marketing dollars to direct mail, e-mail, banner ads, print ads, and pay-per-click (PPC). They spend much of their time, effort, and money on getting those methods to produce a positive ROI (return on investment). But they're ignoring a major source of potential traffic... which means they are losing loads of potential new customers ... and to me that's leaving money on the table: A HUGE mistake.

I'm talking about organic (natural) search engine marketing and optimization (SEM/SEO). Organic search results are those listings you see on the left side of Google after you type in your search term. You know, those little blurbs with links to someone's website. It's not to get confused with "paid" search, which are the small text ads that typically appear on the right side of the Google search results page. There's usually a subtle line separating these ads from the organic results and have a "sponsored links" headline at the top.

Many marketers think focusing on organic search is "a waste of time." Some think there's no way to monitor, measure, and monetize the results. But they're confused. According to a survey by Jupiter Research, 80% of Web users get information from organic search results. And measuring sources of traffic and visitors is easy with the free Web tool Google Analytics.
Search engines like variety in relevant back links to your website. And one of the best ways to get tons of relevant back links is with a systematic method I develop regarding the synchronized distribution of your content (read http://www.precisionmarketingmedia.com/sonar.html for more info.).

So in addition to having optimized website pages -- having a variety of news aggregators (i.e. Google News, Yahoo News), social networks, blogs, and directories linking to your site helps give you a heavier weight in organic listing results. Your company will appear more often and higher in the organic search results ... eventually dominating the critical first three results listings. This helps build your organic market presence for little or no cost. And, let's face it, low cost is a good thing.

Using organic search strategies helped increase traffic rank and visits to a health website I launched by 3,160% and 81.5%, respectively, in only three months. In that same time this websitehad a 62.01% rate of converting that organic search traffic into subscribers. In other words, the traffic was turned into sales (or monetized)! That's about 16,000 organic names in three months at virtually no cost.

So search engine naysayers...do you still think SEM and SEO is a waste of time?

Life Cycle Financial Sales Training... Part II

The birth of a child is an exciting time, no doubt. Life changes so quickly. Values get reevaluated. New perspectives evolve. New priorities emerge. Yes, that one day when a child is born, much changes.

In our financial lives, the birth of the first child means you are now a "Charlie", as I call it. No longer a single individual or married couple, you are now a family.... and families have different financial needs than their non-parental counterparts. As we train bankers to develop deeper customer relationships, we include financial counseling tips that bankers can use to really make a difference in their customers' lives. For the "Charlies" and "Deltas", families with preschool aged children or school age children respectively, there are some important conversations we should be having.

Probably the most important is to review the topics they should already have mastered, learning the savings habit and taking care of their credit score. After revisiting that, we can move on to a few new topics, savings for the child or children's college education (or just savings for the child) and starting long-term savings for long-term goals or retirement. By now, this young family has some goals, whether short term goals or long term goals and they need to be planning to create that future....
We can help our customers by talking about the need for mortgage loans to buy that first home (or a bigger home as the family expands).
We can help our customers by asking if they have started participating in their employer's 401(k) plan. If not, that is the number 1 recommended savings vehicle, especially when the employer gives a matching contribution! You can't beat matching with any other investment out there. And if they are participating in their 401(k) plan, we can remind them that they can also deposit up to $6000 per year into their own IRA plan and build an additional retirement nest egg. When our employees are well-versed in the IRA rules and regs, they can talk to many customers and help them plan an annual contribution program ( of course, customers should consult with their tax advisor regarding deductibiity).

If we are helping our customers move through each life cycle stage with just a few of the basic financial planning tenets in place, we will know that we have not only made a difference in their lives, but that we have developed a loyal customer as well.

Next time, we'll look at how we can be helping our "empty nesters" and retired "foxtrots" also.

Are you including life cycle financial selling in your basic bank training? If not, we can help. If so, please let me know what you do. If you are passionate about financial education like I am, please email me at slovejoy@marketmatch.com.

Until next time,

Sharon

You CAN Measure Social Media (You Just Need To Know How!)

Many people have been using social media because they "think" it's what they should be doing. Afterall, everyone seems to have a Twitter or Facebook account. However, some businesses are putting all this time and effort into SMM (Social Media Marketing) because "everyone else is doing it" and they're not even measuring their efforts to see if all this work is paying off.

Since my background is direct response and PR, I was able to analyze social media goals and apply some fundamental metrics that DR and PR people use.

The Basics
In a nutshell, social media is an interactive platform where people can correspond - via chat rooms, forums, bulletin boards, networks (as in MySpace, Facebook, Classmates, LinkedIn, Bebo), user-generated content sharing (as in Digg, StumbleUpon, Reddit), wikis (interactive online encyclopedias), and blogs - with like-minded individuals who share similar interests, whatever those interests may be.

Cutting-edge businesses and marketing-centric companies have jumped on the social media bandwagon to leverage the increased popularity of this phenomenon. Companies large and small got their marketers to create MySpace, FaceBook, or LinkedIn profiles in order to have their fingers on the pulse of the market, correspond with consumers, and create buzz about their products.

I have been on the Web for some time now, dabbling in all sorts of social media activities with content syndication, viral marketing, and online PR efforts.

How have I been measuring my efforts? By using the same metrics that are used to measure a public relations efforts: Outputs, outcomes, and objectives ... or what I like to call the "3 O's."

1. Outputs (measures effectiveness and efficiency)
For our example, I look at Google Analytics for spikes in traffic to the website's I'm doing social media marketing for in the days following the article's publication. I'd look specifically at traffic sources, visits, unique visits, and visit percentages. I'd also look at referring sites and search engines to see whether the traffic is coming directly from social media platforms. And I'd look for an increase in new subscriber sign-ups (leads) during that same time period.

2. Outcomes (measures behavioral changes)
For this metric, I'd look at feedback from customers... e-mails, phone calls, comments posted on my clients' websites member forum. I'd also do some reputation monitoring --by searching the Web for keywords for each of my clients' website, key personnel at their companies, the article title that I may have syndicated, and any top product names associated with their websites -- to see what buzz is going in targeted and relevant chat rooms, external forums, and bulletin boards.

3. Objectives (measures business objectives/sales)
The most obvious and directly related metric is direct sales of the product that are tied to the editorial. Orders generated from an e-mail link or ad link are coded for tracking, so attributing sales to those sources is definitive. If the sales come from a product page on our website where the true "source" cannot be tracked, I'd collaborate with my clients to review the sales that came in during the corresponding dates of the campaign and look for correlations.

Finally, for each of the above, I would compare the current campaign data versus the year-to-date (YTD) average and year-over-year data to clearly illustrate pre- and post- campaign performance. In other words, I'd check out website traffic, unique visits, specific product sales, etc. - all for the same time periods. That way, I'd have an established benchmark against which to measure our current social media efforts.

Social media is a low cost and effective way to spread the word about your company and products, as well as to conduct market research. By understanding the "3 O's" and how they work, you can actually quantify your efforts with hard data... a critical component for any online direct marketer.

Marketing Through a Recession

One of the fundamental tenets of marketing is, "Those companies that emphasize marketing during a bad economy recover faster and emerge stronger when the economy improves."

It's been proven time and again through case studies in numerous industries, but when it's YOUR institution ... facing shrinking spreads and changing regulations ... the gamble seems awfully risky. If only we had some apples-to-apples statistics to prove it...

Thanks to a Callahan and Associates article released on May 10, we now can base our marketing decisions on relevant data.

This study looked at the marketing expenditures of 645 credit unions and segmented them by:

• Institutions that decreased marketing expenses
• Institutions that kept marketing expenses relatively flat
• Institutions that increased marketing expenses

The study then compared these groupings based on factors like: loan growth, deposit growth, checking growth and member/customer growth.

Click here for the actual article

The bottom line is that those institutions that increase marketing are more likely to experience:

• Higher loan growth in all areas (except mortgage). In fact, those that increased marketing were the ONLY group to experience positive auto loan growth.
• Higher checking growth
• Higher IRA growth

With the onslaught of negative media towards the "Too Big to Fail" banks and the positive national coverage of credit unions and community banks, the environment is better today than it ever has been for you to position yourself for growth. You don't necessarily need a big bank budget to take market share, you simply need to make yourself part of the community conversation.

Awareness and differentiation can drive growth. And when you partner with a marketing firm with a ROI Guarantee, there's nothing left to chance .. and the upside is positioning your institution correctly ... moving forward with expert help at your side!

Inset is a chart from the referenced CreditUnions.com article

Analyzing the ROI Formula - Part 1

This is the third in a series of articles about measuring the performance of marketing, including the use of marketing return on investment (ROI).  In my last post, I described the basic concept of ROI and discussed how ROI has been used to measure many types of business performance.  Beginning with this post, I'll discuss each component of the basic ROI formula and explore some the the issues that each component presents when ROI is used to measure marketing.

The basic ROI formula is:

ROI = (Gain from Investment-Cost of Investment) / Cost of Investment

So, the ROI formula contains three components:

• Gain from Investment
• Cost of Investment
• Time - Although the formula doesn't expressly contain a "time" value, ROI is always measured for a defined period of time.

This post will focus on the Gain from Investment component of the formula, and this component presents two basic issues.  First, how should Gain from Investment be defined?  And second, how should ROI be calculated when the Gain from Investment is produced by more than one marketing campaign or program?

For ROI purposes, the best definition of Gain from Investment is the incremental contribution margin produced by the marketing function or by a marketing campaign or program.  One of the biggest mistakes that I still see some marketers make is to use incremental sales (revenues) to calculate marketing ROI.

To understand why this mistake distorts ROI, remember that most marketing programs are designed to increase sales volume either by acquiring new customers or by increasing sales to existing customers.  But increases in sales volume are not free - there is always an associated cost of producing and delivering the additional products or services.  Therefore, if incremental sales are used to measure ROI, the ROI will be overstated.

Using contribution margin solves this problem by taking costs into account.  Contribution margin is defined as sales minus variable costs.  Variable costs are costs that the company will not incur if the additional sales are not made.  Therefore, incremental contribution margin is a measure of the "net new revenues" produced by a marketing program.

The second major issue presented by the Gain from Investment component of the ROI formula is how to address situations where the Gain may have been produced by more than one marketing campaign or program.  This situation is not at all uncommon in B2B companies where each prospect may be "touched" by several marketing programs over the course of his/her buying cycle. 

Some companies deal with issue by assigning all of the incremental contribution margin earned from a prospect to the marketing program that generated the first "inquiry" from that prospect.  Others assign all of the incremental margin to the program that "touched" the prospect last (just before the purchase).  It should be obvious that this first touch/last touch approach will often produce a distorted picture of marketing ROI if a prospect has had several interactions with your company.

Some companies attempt to eliminate this distortion by allocating the Gain to all of the marketing programs that "touched" the prospect.  But what percentage of the Gain do you assign to each program?  Allocating the Gain equally to all of the marketing programs may not reflect which of the programs were truly influential in the purchase decision and which ones weren't.  Unless you have some way of knowing how much influence each program actually had in driving the purchase decision, the allocations are arbitrary, and the resulting ROI measurement is likely to be inaccurate.

This allocation issue presents one of the most serious challenges in measuring marketing ROI accurately, especially when we attempt to measure marketing ROI at a very grandular level.  The difficulty of using ROI in this way suggests that there may be a better approach, and I'll have more to say about that in a later post.

The tide will turn...

Good morning and HAPPY MONDAY to everyone....

Thank God its Monday!

Today really is a good day.  Sunny, not windy and will be getting warmer...plus my daughter is getting back to a good plateau in her health!

Now, for the update...later this week, we will be launching an exciting new service for bankers around the country and the timing is based upon my belief that the tide has begun to turn and there are plenty of bankers that are looking to charter a new course and the investment community is seeing the opportunity, too.

De novo banks typically open in areas where a void has been left or created.  Closed banks, merged banks, growing markets...all ripe for a de novo bank.  With many execs displaced in mergers, the executive operational talent and drive to start a bank is richly available. 

Here is a chart of de novo bank start-ups in the last couple of years.  You can see they have fallen, but the rise is about to occur.  MarketMatch will be there to help with our expertise and focused assistance!

As you can see, there are parts of the country that flourish with de novo bank openings... keep your eyes open for our announcement later this week.

Have a GREAT MONDAY!

Bruce

Quick Tip: Social Media Measurement Tools

Think you can't measure social media marketing? Think again. Here are some quick ways to keep an eye on your social marketing efforts...

Google Analytics

-Check the "referring sources page" to see how much traffic was generated by the social media sites you've been active in.-Look at overall traffic to website during same time period of your efforts. If you have a sign up/email form, look for lead spikes during time period of your effort.

Google Alerts

-Set alert for your name, your company name, and keywords in your content. You'll get notified via Alert if content/your messagegets picked up and goes viral.

Backlink Checkers

-Google Webmaster Tools: Check back links going to site during same time period of your effort.-Link Popularity Check: Link popularity analysis is one of the best ways to quantifiably and independently measure your website's online awareness.

Check out free backlink checker tools from iwebtool.com and backlinkwatch.com.

Reg E Realities

Reg E ... Everyone's in a panic ... it's the End of fee income as we know it ... all Eyes are on Marketing to make it better.

Sounds like the Y2K scare a bit, huh? My bet is it's probably as credible.

The reality is that Reg E will effect less than 50% of your existing NSF income (debit and ATM only). And the 50% that's at stake, is driven by about 12% of your customer-base.

The trick is to target those heavy overdraft users and make sure they opt-in.

From a communication stand-point you need to:

• Educate: Stick to the basics of: what an overdraft is and what will be different on Aug. 15 than today.
• Motivate: The customer can make an informed decision if you provide examples of how fees will apply and when a card will be declined. Do they want the chance to buy a $30 cup of coffee, or do they want their card declined in the busy grocery line?
• Get a Response: Make it easy. Include a form with self-address and indicia in your customer letter. Make sure your front line staff know your heavy users and are pushing for a response in the branch and when the customer calls in. In the last 2 weeks, divide your heavy user list between your personal bankers and have them make outbound calls (provide a script).

The more heavy-users you can get to opt-in during the next 3 months, the less impact this reg. will have on your institutions bottom line. Come January 1, we'll all look back and wonder what the big hoopla was all about.

Has your institution maximized it's investment in an MCIF?

Does your institution have a MCIF?

More importantly, if so, is your institution getting the maximum return from it's investment in an MCIF?

So often, the individual that championed the initiative to select an MCIF vendor and bring the technology in-house moves on to find a "new challenge." When this happens, it is not uncommon for the MCIF to set idle as no one else in the organization "steps up" and assumes responsibility for making the MCIF an integral part of the organizations marketing strategy. Consequently, the data doesn't get refreshed on a timely basis, management forgets why the investment was made in the first place, and finally, the system that houses the MCIF sits off in a corner someplace in the office "collecting dust."

If this has happened in your organization, the organization is missing out on a great opportunity to retain and strengthen existing customer relationships!

Let's assume you have an MCIF and it is being updated in a timely manner and you are using it to retain and strengthen existing relationships.

Have you taken the next step to maximize your investment in an MCIF?

Retaining customers and strengthening relationships is only "half the equation." In order for your organization to grow and prosper, you need to bring in new households.

Appending a segmentation code to every household in your database allows you to better understand the type of customer your institution serves. It allows you to see the types of products that they have a propensity to purchase, the channel they use to purchase those products, balances they are likely to bring when the product is purchased, etc.

Utilizing segmentation also allows your organization to find prospects that look like your most profitable customers, provides information on the best product to offer to initiate the new relationship, tells you the best media to reach out to the prospects, etc.

Bottom line - if you have an MCIF and aren't using it, get started. If you are currently using your MCIF to retain and strengthen relationships, but haven't appended a segmentation scheme, get started.

The April "Brown Bag" webinar was on "Segmenting Your Market." If you were unable to attend this session, contact Bruce Clapp at MarketMatch and he can email you the presentation complete with the Q & A that took place.

Have a great week/weekend!

Mike Witsken

Train Your Bankers to Talk to Gen Yers

Since the financial meltdown on Wall Street began in 2008, I have believed that we all, as bankers, could have done a better job of advising our customers in sound financial principles.
We talk about "selling" to our customers, and we measure our "cross-sell" ratios, and these things can be good objectives. But has your bank intitiated a training program for your front line people about how to advise your customers on basic financial topics? Shouldn't this be part of banking's "customer service" concept?

Today, I would like to talk about the new, young Generation Y group. These may be individuals just starting out on their own, or young married couples just starting a new life together. Their financial needs are different than other generations. Do you train your staff in how to talk to them?

For example, Gen Y looks at the world differently since they have grown up in the information age and are incredibly knowledgable and comfortable with things like the internet, computers, online anything, cell phones with many functions, and instant access to anything they want.

Yet they still need basic financial lessons. How many young people today get good financial literacy at home or at school? Not many. So, a couple of basic lessons we could help them with would be saving and managing their credit score.

I teach lots of bankers about cross-selling, but I always talk about how to really help customers with the financial needs they have based on their life cycle stage. Basic financial needs really are predictable based on where you are in your life stage... For example, these Gen Y'ers could be offered a suggestion like: "We recommend to our customers to save 10% of your take-home pay... is that something that we could help you get started with?"

Or how about "Managing your credit score is really important in today's world... have you established any credit in your name yet? How has that gone? I can share some ideas with you about managing your banking that will help protect a good credit score or help you improve a weaker one. Would you be interested?

In our Winning Team Training program, we then go into detail and examples of how to have these conversations, what options to offer, how to continue to connect with this generation in selling the related products and services, like online banking, mobile banking, and more. There is a "right" way to talk to them that lets them know you "know who you are talking to". It can make a huge difference in their loyalty to you and a huge difference in their financial lives....

After all is said and done, bankers can be the unsung heroes to our customers, if we are well-trained, if we take opportunities to be financial advisors, and if we are alert to each major group of customers and their life cycle financial needs.

I will discuss more about the "Charlie's" next time. Those families with children and how their financial needs are different and how we should be helping them.

Until then, think about your financial institution's sales training programs... are you addressing the real financial issues your customers are concerned about or just training to "sell"?

Email me your concerns or issues at slovejoy@marketmatch.com.
Happy Tuesday!
Sharon

The Basic Idea of Return on Investment

As I wrote earlier, return on investment has become the "gold standard" for measuring the performance of marketing.  Return on investment is now used to measure both the performance of the overall marketing function and the performance of individual marketing activities and programs.

In addition to measuring past performance, marketers are using ROI estimates and forecasts to make decisions about future marketing programs and to allocate marketing budgets.  Therefore, ROI is playing a significant role in determining how marketing wll be done.

The basic idea of ROI is easy to understand.  Investopedia.com defines return on investment as:  "A performance measure used to evaluate the efficiency of an investment or to compare the efficiency of a number of investments.  To calculate ROI, the benefit (return) of an investment is divided by the cost of the investment; the return is expressed as a percentage or a ratio."

The basic ROI formula is:

ROI = (Gain from Investment-Cost of Investment) / Cost of Investment

For example, suppose that you purchase 100 shares of stock for $10 per share.  One year later, you sell the stock for $11 per share.  Your annual ROI for this investment would be 10%, calculated as follows:

ROI = ($1,100 - $1,000) / $1,000
           $100 / $1,000
           10%

ROI has been used to measure the performance of companies and business units for over eighty years.  ROI estimates have also been used to evaluate major capital investments for decades.  More recently, ROI has been used to measure the benefits provided by everything from process improvement projects to employee training programs.  All things considered, ROI (or one of the variations of ROI) has become the most prevalent measure of financial performance used in business today.

It's only natural, therefore, to use ROI to evaluate the performance of marketing activities and programs.  CEO's and CFO's are rightfully demanding proof that their "investments" in marketing are producing real financial benefits, and they view ROI as a proven method for measuring those benefits.

So, if you're a marketer today, you need to be ready to measure and/or estimate the ROI of your activities and programs, or you need to be prepared to show why a different metric should be used in lieu of ROI.

In my next post, I'll take a closer look at the "return" component of the ROI formula and explore some of the issues that arise when ROI is used to measure marketing.

Its May...

Can you believe it? Its May!

May marks the true Spring into Summer connection.  The spring weather is heating up (shout out to our friends in Arkansas, Mississippi and Tennessee to be safe!!) and the weather can be unpredictable.  You know that summer is coming and we just have to be patient and wait for it.

However, you SHOULD NOT be patient and wait for customers to heat up, be predictable, and come to you.  With the Move Your Money action is full force...even it is not visibly active in your market...it IS in your market!  People are reconsidering their relationships and you have to put yourself on the "radar screen" of your marketplace.

Three tactical actions for you to do THIS WEEK:

1. Segment your top customers into three categories (in person, phone, mail) of contact you should implement in May and reach out to each!
2. Provide a list to each banking office of 100 prospective new HHs
3. Review your progress toward your 12/31 organizational goals

Take inventory of your position and make the small changes needed to realign your progress with the goals, in anticipation of your June 30 mid-year review.

The key?  Plan, review, plan, review...and implement in each interim step.  Remember, the key is the alignment between the plan and implementation with the results!

Cheers!

Bruce

The Blurring of the Line between Marketing and Publicity

The global economic crisis has made almost every industry reexamine its business practices in an effort to reduce costs, find efficiencies and tap new sources of revenue. A sector with perhaps some of the most significant changes has been media outlets. Television stations are now requiring reporters to also function as their own cameramen and video editors. Some stations are heavily investing in online media as their revenues from broadcast commercial sales shrink (Pepsi decided not to advertise during the Super Bowl for the first time in 23 years). Print media outlets are rapidly shifting content and focus to online domains, and if they already had robust online presences, some like the Washington Post are looking into other sources of advertising revenue, such as developing iPhone applications. Reviewers and culture writers are seemingly a dying breed as news outlets consolidate resources and rerun content from other providers (the Los Angeles Times regularly runs articles from its Tribune sister in Chicago), including more and more from user generated sites.

The new trend seems to be a blurring of the line between publicity and marketing. The longstanding tradition of having an impenetrable fortress between advertising and editorial at major news outlets seems to be waning. It used to be that the most an advertiser could do to help push a story was to ask their ad rep to get a press release on the right desk, however I am starting to see more and more advertising proposals that include guaranteed opportunities for press coverage and interviews. Media outlets are starting to regard press coverage as added value to advertising contracts designed to encourage a higher advertising spend. In the most extreme circumstances, there are now significant media sources that have become exclusively pay to play—meaning that the only way to secure editorial coverage is by signing an advertising contract. A recent article highlighted this trend in Seattle where arts organizations have banded together to purchase editorial time on a television station, however this isn’t an infomercial or advertorial, it simply is editorial coverage that is bought and paid for.

My concerns about this new model:

• Is there a role for an impartial voice? One of the reasons that news outlets are trusted is that they are (mostly) viewed as being impartial. Will editorial features ever have the same power that had in the past if the readership realizes that the coverage has been purchased? How can you have an impartial review if the reviewer works for a publication that is selling editorial opportunities?



• Is there a role for small organizations? Many small organizations live on earned editorial coverage as they do not have an advertising budget. As news outlets start to allow their editorial coverage to be influenced by advertising spends, what happens to the small organizations that have no money to spend?



• Is there a role for a publicist? Many publicists I talk to are enraged about this new trend. Imagine that you are a publicist, and have been pitching an outlet for months and months with no success only to find out that the publication is pay to play. In a manner of minutes, the marketing director places an advertisement and all of a sudden editorial opportunities are available. What then becomes the role of a publicist?