Banks Need To Pivot To A Customer-Centric Marketing Model

Welcome To ‘Business Unusual’ In The Banking World

Banks Need To Pivot To A Customer-Centric Marketing Model

BY STEVE SALLOWAY, SPECIAL TO BANKING MID ATLANTIC

In the recent past, the financial industry practiced years of self-centered marketing approaches that ultimately served to commoditize banking products and services. Then COVID-19 hit. In a somewhat ironic development, these anxious times have seen the advent of a new era of consumer-centric marketing opportunities.

The extended lockdown has had a tremendous impact and has produced lifestyle changes, a shuttering of businesses, a huge wave of unemployment, and a dramatic hit to many people’s retirement savings. The virus has changed what consumers need and—equally important— what they expect from their financial institutions.

To remain competitive, banks would do well to take notice and respond accordingly.

Welcome to “business unusual” in the banking world.

Change Drives Change

A change in consumer expectations demands a change in marketing strategies. While business objectives may remain the same as before the outbreak, the strategies and resulting tactics must change to meet the challenges of the new normal and to meet consumers where they are right now. Consumers are in pain and marketers have the responsibility to cure that pain and lead their institutions through the marketplace revolution that is occurring.

While many brands are responding by quickly producing self-centered feel-good messages that speak only about themselves, consumers are left with the nagging question: “What’s in it for me?”

Banks and credit unions should use these challenging times to pivot and become customer-centric, relationshipdriven institutions. Financial brands should be seeking to create a sense of stability, adaptability and provide solutions that are based on actual consumer needs. Consumers have long been in control of the purchasedecision journey and now, more than ever, they expect more.

What consumers need and are looking for today are personalized solutions to solve the challenges they face within their current circumstances. They are looking for guidance, accessibility and understanding—in other words: security.

Migration Needed

Success requires that financial institutions migrate from an institution-centric product-oriented marketing approach that is based on the “4P’s” (Product, Pricing, Place, Promotion) to a customer/member-centric service model that places an emphasis on their members/customers and consists of Solutions, Information, Value and Access, known as the “SIVA” model.

The difference between the two approaches has profound effects that can show real benefits to both customers/members and the institutions that implement them during this crisis and afterward. The service model is entirely based on understanding customer needs and then developing solutions that satisfy them; anything else is just “noise.”

Your financial brand can bring about this change and position itself as being a valuable ally to your members/ consumers. How? Start by acquainting yourself with your brand mission, positioning or brand story if you have one. Translate these brand linchpins into customer benefits and solutions and visualize what they look like in a tangible way. Make sure all employees are made aware of what they are and what they mean.

Then speak with your customers/members. Take the time to get to know and understand them and identify what they need. Build a bridge between the institution and the customers. This may involve modifying or creating new processes or developing new products or modifying existing ones in the short term.

Novel Bundling

Reliable access must be guaranteed by leveraging online capabilities and apps, but brands must ensure not only a successful and friction-free environment but a cohesive and consistent user experience across all channels. Remember, customer expectations are higher now and for many customers, this may be the first time they are using online channels or at least, they may be relying on them more than ever.

Banks and credit unions can bundle products and services together in novel and relevant ways to meet the practical needs of customers. People who have lost or fear losing their jobs may want a pool of ready cash for an emergency fund, so maybe a “ready-cash” bundle could include packaging a HELOC product with a deposit product and budgetary tool if offered. Mixing and matching products and services in compelling ways can provide practical offerings and create a unique value proposition against competitors. Investigate the competitive landscape and determine if there are voids that can be filled by a new or revised product/service set.

To convey a cohesive message across all channels, banks should leverage their entire tactical ecosystem. We are fortunate to have a variety of tactics available today to create a cohesive and unified brand experience that can be both personalized and broad-based to support the brand.

Retaining members/customers is less expensive than finding new ones. Focusing on defending the customers you already have is important. If marketing budgets get slashed due to crisis-driven budget cuts, preserving and protecting your existing members/customers becomes even more important. Marketing messages should be personalized to be truly beneficial and valuable to your existing customers.

Leverage The Tools

Internal analytic software, customer relation management systems and other segmentation tools can best be leveraged to provide personalized direct marketing. Data is key in developing an understanding of what is important to your customers and in developing messages that would resonate best with them. Email is a great tactic to deliver relevant, engaging and therefore valued messaging directly to your customers/members. Don’t forget the value of a telephone call. Your top 10% of customers and especially small business owners deserve one-to-one personal attention.

Marketing budget cuts mean looking at alternative media tactics that cost less. Public relations can be leveraged to garner unpaid media impact. Social media is how brands maintain relationships with their customers. Insights into what customers are feeling right now, what they are sharing and saying can all be used to determine what it is your institution can provide that is useful to your customers/ members.

Social is a two-way conversation and should be used to engage your audiences and show how your brand is supporting online and offline communities. All social media tactics should be monitored; messages that are in line with brand missions and values should be developed and coordinated to ensure a cohesive presence and a consistent brand voice across all channels.

Grow Share

“Down Economies” are excellent opportunities to grow market share. There are many studies of past recessions that could be cited to prove that. Political advertising, the Olympics and other sporting events have been postponed and these uncertain times may cause many competitors to cut their media budgets.

Forward-thinking brandsshould take advantage of unsold media inventory to increase their share of voice on local media and to negotiate better pricing to lock in longterm media contracts while the media has unanticipated excess inventory. Daytime streaming is exploding and now is the time to take advantage of this tactic.

As a common thread throughout the fabric of their communities, banks and credit unions have a unique role to play in supporting and binding the local communities and economies together during this health and economic crisis. Small business owners are not only commercial customers but retail customers as well. Banks and credit unions should be relearning and living their missions.

Uncertain times will cause change, but the mission and brand values remain the same. Indeed, they are guideposts that are constant and thus are the underpinnings of a solid brand.

Steve Salloway is director of strategic planning at Davis Advertising. He has over 20 years of experience in putting together strategic marketing and media mixes designed to achieve client’s business objectives.