Six Key Words for Banks in 2009

Capital, credit quality, liquidity, and non-performing assets are definitely high-profile terms that we hear a lot in the banking circles these days. However, as your bank tackles the challenges of 2009, keep in mind the following six key words that can enhance your ability to succeed in gaining market share, picking up core deposits, and ultimately enhancing the bottom line for the bank:

1. Stability. We all understand the environment we are living in and the tremendous media that is focused on the banking industry. Unfortunately, so much of that media is looking for a story or a conspiracy somewhere. As a result, we get stories about Wall Street “Bank” bonuses, banks not lending (even though lending is at a record high), or banks closing (three more this past Friday). Therefore, it is critical that you continue to communicate a message of stability and strength to your marketplace. Don’t begin to think that your customer base and market got the message after a few ads. You need to structure your entire organization around the message of stability, communicating the message internally to your people so that they are confident in communicating that to the customer. You also need to communicate a stable message externally through speeches at local club luncheons, press releases, sponsorships and advertising. A good example of this effort is in the recent SunTrust campaign that uses the theme “Live Solid. Bank Solid.” watch video
   


2. Customer: While this might seem to be an obvious word to focus on for most banks, I would suggest to you that it is not. Since the economic crisis has begun, most banks have turned inward to focus on their own problems; when communication is made to the marketplace, it is usually about us, the bank. Look at us. Aren’t we strong? Aren’t we stable? Aren’t we good? It is critical that banks get outside of themselves a little bit and connect with the people on the streets. Look for a way to let people know that you understand they are struggling too. Look for a way to reach out and help. Look for a way to educate and lead during these times. As a general rule, if you think about customers and how you can meet their needs, your needs will eventually be met.


3. Savings. There is no doubt that Americans have been living above their means for many years. However, our current economic crisis has sent a loud wake-up call to most Americans; as a result, there is a new attitude about saving money. In January 2005, the individual savings rate was .05 percent, but in January 2009, it shot up to 2.8 percent. The present situation has taught us to go back to the basics and save for a rainy day. However, in reality, a lot of people are new to the concept of savings. Therefore, it is a good time to reevaluate savings products and educate your marketplace on the many options that are available to meet the needs of your customer base. Look at it this way: if Sears can successfully bring back layaway, you can bring back all kinds of savings products—from passbook savings to children’s savings and Christmas club accounts. There is tremendous opportunity to gain market share and core deposits through the promotion of savings.


4. Value. In just about everything I read from leading marketers, the key word for 2009 will be “value.” People are strapped and concerned about the future. Since they are setting aside more money in savings, they don’t have as much money to spend. Therefore, people are thinking more about the value of their purchase and if they are truly getting their money’s worth or not. This is so easily seen from the retail report for 2008. While most retailers were posting losses for 2008, Wal-Mart recorded a 17.3% gain in revenue due to the position of value. The marketplace understood the position and believed it; as a result, Wal-Mart increased sales through the message “Save money. Live better.” Therefore, without compromising your brand, look for ways to communicate value to the customer in the form of rewards, loyalty, relationships, benefits/features, convenience and control. Some of your greatest opportunities in 2009 will be through cross-selling existing customers with value-added products to increase retention and share of wallet. Don’t be afraid to try new things this year. It might even be a good year for old-fashioned coupons.


5. Brand. It is going to be a challenging year for all banks, and as a result, banks will need to communicate a variety of messages. However, it is important that, more than ever, you stay “on brand.” Your organization’s brand is more than just an ad campaign or slogan. Your brand represents the core values of your organization, your philosophy, passion and purpose for existence, and a message that resonates with the marketplace in a way that is relevant, emotional and creates an experience. Your brand is a combination of who you are and what the marketplace feels about you. Stay in touch with the marketplace through focus groups studies, town hall meetings, surveys and meetings to understand how your brand is being impacted by the current economic situation. It is critical that you continue to learn how the market “feels” about you. Then, with a clear understanding of your brand, tell your story with each of the other five key words in mind. However, tell it only as you can tell it, and avoid the temptation of telling it like someone else. Know your brand … know who you are and then be true to that brand for greater distinction and differentiation in the marketplace.


6. Metrics. The days are long gone when we can just throw money to marketing for the purpose of something that looks good or sounds good. Yes, you do need to be creative; and no matter what anybody tells you, there is always going to be an element of trial and error in any marketing effort. However, if bank marketing is going to be successful and more than fluff, it will have be strategically driven and systematically measured. Look for ways to measure your marketing efforts in 2009. If you are focused on brand, you can conduct Top of Mind Awareness surveys every six months to see movement and impact of your efforts. Top of Mind Awareness surveys always mirror FDIC market share reports and are valuable to determining effectiveness of brand efforts. If you are doing product campaigns, set goals and establish a process of determining cost of funds and return on investment. Permission-based email and direct mail campaigns have great potential for measuring results. On average, banks in 2008 reduced their marketing budget by 10% and most likely those budgets will continue to be reduced in 2009. However, establish some metrics for measuring your bank marketing results and you will be in a position to better maximize opportunities in 2009.

It looks like it is going to be another challenging year. As you determine your goals, consider your threats and assess your opportunities, remember to add these six keys words into your strategy. Craft your message to revolve around your stability, your customers’ needs, the savings and value you offer and your unique brand. Then institute various metrics that enable you to gauge how well your brand is performing and your strategies are working.