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Turn Your Bank’s Marketing Department From Pain Point to Profit Center

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In today’s digital economy, many community banks thrive by transforming their marketing departments into profit centers. This means turning them from cost centers into ones that actively generate revenue. 

For community banks, marketing can be a significant source of profit and growth. With careful planning and an effective strategy, community banks can leverage their unique selling points to attract customers, build brand loyalty, and increase customer retention. 

To do this, banks need to recognize their customers as digital users and understand their need for enhanced online experiences. Traditional methods of marketing may no longer be enough. Instead, banks must adopt data-driven strategies and smarter communication tactics in order to deliver personalized interactions with consumers.

Introduction: What Makes Community Banks Unique and the Challenges Behind Their Marketing

Community banks have a commitment to providing high-quality customer service and personalized attention. They tailor their services to the specific needs of their community, such as small business lending, low-cost mortgages and deposit accounts.  Because they are local, they have a better understanding of the needs of the people they serve, which allows them to offer more customized solutions.

However, competing against large corporate and online-only banks is often challenging. Local banks have limited resources comparatively in terms of marketing budget and technical capabilities.

Areas in which community banks often struggle:

Digital Customer Engagement

Many community banks have been slow to adapt to the digital economy, despite its many potential benefits. This is due to a number of complex issues and factors, including a lack of investment in customer engagement. 

Banks have invested significantly in technology over the past decade, with a focus on digital banking apps that became the main gateway for customers to interact with their banks. Transactions were made virtual, but customer engagement became somewhat of an afterthought.

Banks need to determine if they are doing enough digitally to let their account holders know that they understand and value them. It is essential for banks to engage with their customers uniquely, at scale, taking into account each consumer’s distinct life state and financial outlook. This engagement should be ongoing — not limited to an app.

Tight Labor Market

Like most industries today, many banks face challenges attracting and retaining top talent. The pandemic has fundamentally reshaped the work environment and employee expectations.

Organizational and cultural change is difficult, and the skills necessary for this change are in short supply. The most difficult skills to develop within marketing teams include:

  • Strategic thinking
  • Collaboration and leadership
  • Technical ability
  • Workflow management 
  • Messaging

As the banking industry shifts to incorporate more responsibilities in terms of digital strategy, it is essential for successful operations to attract and retain high-quality employees. 

Conversely, even if your bank has seen minimal organizational change over the past year, this might actually be cause for concern. Future success could hinge on your bank’s ability to anticipate the talent and resources it currently lacks.

Improving Focus

Marketing managers must avoid simply defaulting to an old task list and playbook. The important functions of marketing: 

You need to do all of this without spending a lot of money. The keys to marketing a community financial institution:

  • Simplification
  • Differentiation
  • Audience segmentation
  • Consistency

It is common for banks to offer many products and services, but it is better to keep things simple. Marketing can usually most easily simplify: 

  • Website management
  • Marketing messaging
  • Branding
  • Local promotion

ROI Trap

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While ROI is a valuable indicator of potential success or failure, it should not be the sole determinant when making decisions related to investments in resources, personnel and operations. Relying solely on ROI can have unintended consequences that ultimately undermine an organization’s ability to reach its enterprise goals. 

Marketing success is linked to a range of objectives, such as market share and sustainability, thus Return On Objectives should be the primary focus. A data-driven dialogue needs to be developed in order to prioritize trade-offs between revenue and margin growth, or growth across different product lines.

A more holistic approach that takes into account risk and other factors may lead to better long-term outcomes. This will also help make decisions about simplifying, consolidating, automating and outsourcing easier.

  1. The benefits of transforming your marketing department into a profit center
  • Measurement of the success and financial impact of marketing initiatives
  • Data-enhanced decision making
  • Transparency and accountability for marketing department
  • Efficient use of budget
  • Improvement in customer satisfaction & loyalty
  • Access to insights to drive personalization

For those in the know, your bank will be considered well-managed, as a focus on ROI indicates strong fiscal responsibility.

  1. How to make this transformation

For your bank to transform, the strategy and investment must start at the top. Executives should develop high-level goals to drive clear objectives and generate data-driven strategies that leverage digital marketing technology.

CMO Alignment with C-Suite

As the role evolves, CMOs must rapidly align with their C-Suite colleagues by:

  • Implementing a shared growth strategy that maximizes digital investments
  • Providing a demonstration of ROI on marketing initiatives in ways that are easy to understand

The majority of finance leaders want to increase spending on digital technology while also protecting and prioritizing investments in their workforce in order to remain competitive in a tough labor market. Automation is becoming increasingly attractive as a tool for increasing workforce efficiencies.

However CFOs are somewhat skeptical of past investment in marketing technology. Although growth strategies encourage increases for martech budgets, these finance leaders sour on certain marketing tools due to underutilization and ROI issues. In order to overcome this, CMOs should consider investing more funds into martech training in order to boost utilization and business value.  Furthermore, with CFOs dealing with intense margin pressure, CMOs must be prepared to prioritize training spending from within their existing budgets. 

CMOs should be able to determine the overall value of every marketing dollar invested. If they cannot verify yield of returns, they may need to consider investing in dependable analytics. Strengthening value calculations is imperative in demonstrating why marketing matters and how it can lead to business growth.

Your bank should prioritize digital engagement and identify the tools and resources necessary to expand their online presence. The marketing department should be given the authority to comply with these requirements and seek out the solutions needed to achieve this transformation.

The Budget Battle

CMO’s must defend their bank’s marketing budget. It can be hard to make the case for a budget increase. And in times of cuts, it can be even more challenging to avoid a reduction. 

The basic tenet to keep in mind: marketing is essential for growth. If marketing is an investment for growth, then cutting it has consequences that must be considered. Your bank needs enough marketing resources to compete against competition in the future.

If marketing cuts must be made, CMOs can establish investment triggers that signal the need for increases down the road. These triggers provide future flexibility in competitive positioning, inform upcoming budget decisions, and create opportunities to expand budgets.

  1. Tips for success

Personalization & Geo-Fencing

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It is important to market to people in a way that shows you understand them as an individual. This means using the data you have about them to create targeted communications, rather than using generic messages. 

  • Targeted emails 
  • Personalized web content
  • Personalized mobile banking experience
  • Brand consistency 
  • Local list management

Marketing Local Level

Allocate some of your marketing budget to each individual market for things like community sponsorships and local advertisements. Doing this gives the people who work in each market more control over their budget. It also frees up central marketing staff to work on other projects.

Leveraging Data and Analytics

Several ways banks can leverage analytics to maximize marketing impact:

  • Implement customer segmentation strategies to target personalized messages to specific audiences
  • Tracking customer behaviors to identify trends and preferences
  • Analyzing data sets to uncover hidden patterns and insights
  • Using AI to optimize ad campaigns and increase ROI.
  • Utilizing predictive analytics to measure the effectiveness of marketing efforts

The good news: your bank does not necessarily need to make huge investments for this transformation. You can start by considering reallocation of the existing marketing budget. 

A successful strategy relies on data, business intelligence, and smarter communication with consumers so they feel like their bank understands them. Every interaction must be personalized even though it is done online.

Banks should operate with clarity of purpose and a plan for growth. In the transition to digital engagement, focus must be on solving problems for customers. This means having a dependable and dynamic tech platform that drives new sales for your financial institution day after day. 

Keep in mind, proof and results are the ultimate measure of success. 

If your community bank needs help transforming your marketing department into a profit center, let us know. We have years of experience helping clients just like you get the most out of digital marketing. For more information, visit us at DIGI CONVO | Community Banks Marketing Experts.

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