The Secret To Marketing To Gen Z and Millennials


millennials-3-26-19.pngIt’s a constant surprise to see how much opportunity still exists within a customer base for increasing revenue via timely and effective cross-selling. Growing revenue by meeting a greater share of an existing customer’s needs is almost always more cost-efficient than seeking out new customers.

We also see many questions about how best to attract and relate to younger consumers among the millennials and Generation Z.

Fortunately, a well-executed digital marketing strategy can be beneficial in expanding your service to existing customers and attracting new business from among the millennials and Gen Z.

Content Marketing
It all starts with a story. While “content marketing” is a common buzzword, the concept is as old as writing itself: good stories get people’s attention. Content marketing is nothing more than informative and entertaining solutions to your customers’ challenges.

Developing an outstanding content marketing program requires deep understanding of the consumer buying cycle. Referred to as the “buyer journey,” this roadmap of consumer behavior outlines the prominent questions and issues at each stage of the buying cycle.

For example, according to a Harris Poll conducted for the Transamerica Center for Retirement Studies, 71 percent of millennial workers are saving for retirement and 39 percent of millennials are saving more than 10 percent of their salary. Imagine your bank is selling this group IRA’s and want them to come in for a financial planning session.

It would seem like a perfect fit. But not so fast.

A Charles Schwab study showed that millennials hold 25 percent of their portfolios in cash due to worry about the stock market and investing. Bank marketers have an opportunity to educate potential customers on ways to make those savings grow rather than just promoting the “end point” IRA product.

Savvy marketers prepare a range of content for each stage in the cycle and for each channel of their marketing efforts. Blog posts, social media content, video and podcasts work together to place your bank at the forefront of the consumer’s mind through the process.

Paid Online Advertising Combined With Machine Learning
The world of paid online advertising has expanded dramatically in the last two decades. Commonly referred to as “pay-per-click” or “PPC” advertising, there are tools that allow bank marketers to target specific consumer and business populations with uncanny accuracy. This combined with advances in machine learning technology allows banks to deploy efficient campaigns that deliver targeted content and offers when they are most likely to capture attention.

Paid advertising is measurable in ways traditional advertising is not. PPC advertising allows bank marketers to run campaigns on the basis of Return on Ad Spend (ROAS) nearly in real time. Budgets can be increased or decreased if lead costs are favorable. Offers and creative can be tested on the fly using financial results.

User Experience Design
Many articles gloss over the significance of user experience design in favor of touting the virtues of “online banking.” Marketers ignore this facet of customer acquisition and retention at their peril.

The user experience, or UX, does not need to be pretty in order to be effective.

For banks, UX is important in reducing the friction of any financial transaction where consumers spend most of their time online. Rather than simply think of “having online banking,” bank marketers need to measure the rate of sign-up abandonment, transaction cancellation, and other indicators that a bank’s online tools are difficult to use.

Banks that lack the brand strength of large national or regional players and rely on high-quality customer service need to be relentless in making their online banking options easy to use. Asking customers to download three different apps and carry multiple logins is a far cry from the face recognition and one-button interface offered by some of the nation’s largest banks.

Tying it All Together
The need for financial services is lifelong. Consumers pass through a variety of financial stages throughout their lives. Each of these stages contains its own, unique buyer journey.

Surveys and regular email and social media communication can help current customers find answers to their questions at the right time. Intelligent remarketing that drives paid advertising can help your results appear in their web searches and expand their understanding of the full range of services you offer. Thoughtful UX can enable customers to discover new products that solve problems when they first encounter them.

All of these benefits apply to your prospective clients. Being able to precisely target consumers when they are searching for answers means you can capture their attention earlier in the buying cycle.

Frictionless and “invisible” UX allows you to bring those new customers into your product and service ecosystem with the ease that younger consumers expect.

Getting the Most Out of Your Branch Network


8-25-14-fiserv.pngWith narrowing net interest margins, less-than-optimal loan volumes and service charge fees under fire, it’s more difficult than ever for America’s financial institutions to plan for the future and achieve their strategic objectives. You probably believe you’ve squeezed every drop of efficiency out of your operations already. What’s the key to further efficiency, profitability and growth in this environment?

It all comes down to the branch.

Branches represent 66 percent of the non-interest expense for the average financial institution, at a time when consumers are making the transition moving to online and mobile channels. That’s why banks must maximize the value of the branch to position themselves for success. Financial institutions of all sizes can profit from creating what I call a “branch planning playbook.” This is a highly structured process of reimagining your branch network, and the time to start is now.

An Honest Appraisal
You can begin by stepping back and asking some tough questions.

  • What has been the historical purpose of your branches? Document how each one has performed, based on this purpose. Imagine the shape of your branch network if you were starting over today.
  • Does your funding strategy make sense? How you fund your bank—with wholesale or low-balance accounts, for example—shapes your path to high performance.
  • Do you have excess capacity? All financial institutions experience excess capacity as they add branches. The question is how long they will subsidize it.
  • How do your branch efficiency metrics stack up to those of high-performing peers? Measure core deposits, revenue and number of accounts per office. Then size up revenues, loan volume, deposit totals and number of accounts per full-time equivalent employee.
  • What are your franchise-level growth goals? Determine how these goals compare to the growth projections in the market.

Evaluate Each Market
Now you should have a picture of where your financial institution has been, where you stand and where you want to go. Next, you must examine how that matches up with your marketplace and how you can improve your position.

For a complete market view, you’ll need market analysis tools. There’s a wealth of data available and you want software that can identify both competitive saturation and the demographics of your potential customers. These tools are indispensable as you complete these steps for each branch:

  1. Define the geographic market. Typically, this is an area with about 20,000 households and businesses.
  2. Identify the primary market type. Is this market consumer-oriented, commercial or diverse? Is it large or small, urban or rural? Define its growth characteristics.
  3. Measure market growth potential. Get five-year and annualized growth estimates for consumer and commercial loans and deposits.
  4. Evaluate your best consumer and commercial segment opportunities. Upscale earners or growing families, for example, represent solid prospects.
  5. Quantify your best product opportunities. Select products and services that appeal to your top consumer and commercial segments.
  6. Analyze market competition. Identify your competition, their locations and market share.
  7. Evaluate your current customer base. Identify the household and business types with which you resonate. Analyze wallet share and gauge customer loyalty.
  8. Build a branch strategy matrix. This is expressed as a quadrant diagram that sorts your branches according to current market position and market growth potential, identifying top branch performers as well as branches that may be candidates for closure or consolidation.

Define Focus and Set Clear Goals
Armed with your research, you can now set up your branches for greater success. Narrow the focus of each branch to products and services that fit the market. For example, you might designate a branch as an origination point for commercial deposits, catering to the health services industry. Then, staff accordingly.

Set obtainable goals. Your goals should be conditioned by what you’ve learned about the growth potential and competition in the market.

Executing the Plays
The strategic framework in the branch planning playbook provides an orderly plan for refining your branch network to achieve strategic objectives. It will mean making important decisions—perhaps even closing or consolidating branches. But you can rely on the intentional use of market analytics to help maximize your financial institution’s investment in current branches and inform your decisions to open new ones.

I encourage you to start imagining a more focused future, today.

To further explore the process for creating your own branch planning playbook, review the Branch Planning Checklist from Fiserv.

Is it Time to Rebrand?


7-25-2014-GLC.pngAt many banks, marketing is a four-letter word. That’s because for decades financial institutions have relied on their legacy to lead their brand—and bring in business. But in today’s world, where there is fierce competition in the marketplace, as well as numerous mergers and acquisitions, marketing—and often rebranding—is a must if you want to stay ahead. Hundred-year-old banks can’t act or look a hundred years old. Updating your brand is crucial to staying relevant to savvy customers. Studies show that your brand should be vibrant for seven to ten years—after that, it’s probably time for a revamp.

But before you start, you need to get answers. What will you spend and what is your strategy?

The typical budgeting benchmark for financial institutions is 0.10 percent of assets. That means, for a $400-million asset bank, approximately $400,000 should be allocated toward a robust marketing program. It may seem like a lot, but it’s an investment that—when done right—will bring you the optimal business that you want with quantifiable return on investment.

What does that look like? Seven out of 10 financial marketers put online advertising and social media on their list of rebranding channels for 2014. But it’s not enough to put a message on Facebook and hope the masses take interest. These are tactical executions, not branding strategies. Branding is an intense project that requires months of focus and dedication from bank boards and management, and a marketing professional (internal or external) that can run the project.

So how do you start? First, take stock of your brand and look both internally and externally. Conduct a S.W.O.T. (strengths, weaknesses, opportunities and threats) analysis to fuel discussion, positioning and branding. Ask yourself the following questions:

  • Who are we?
  • What do we stand for?
  • Why are we changing?
  • What does our competitive landscape look like?
  • What makes us unique?
  • Are we delivering consistent messaging?
  • What’s our brand promise to our customers?
  • What channels are important for our demographics?
  • What do we need to succeed?
  • How will our staff be impacted by these changes?

If the questions seem overwhelming, that’s because they are. In fact, 71 percent of financial marketers retained agency services in 2013 to run their rebranding programs.

But if you stay focused and committed, the process will become easier. And remembering these lessons can help you assess what your bank needs and what makes sense for your brand:

Lesson 1: You don’t have to throw the baby out with the bathwater. There’s equity in your brand—a look, a feel, emotions, etc.,—that are familiar to your customers. Don’t be too quick to ditch them. Figure out what stays and what goes.

Lesson 2: Whatever you decide to do, do something that will trigger an emotional or personal reaction. No one wants to connect with a dull and uninteresting brand.

Lesson 3: Don’t go more than a decade without revisiting your brand. Times change and so must you.

Lesson 4: Take a step back and ask yourself, what’s YOUR story? Try to infuse that within your branding. People love history and connect with personal stories.

Lesson 5: Take your message wherever your customers and prospects are. You can’t be afraid of digital. Embrace each channel for what it can do.

Social Media Series: A Look Ahead


This is the fifth and final post on the value of social media for today’s financial services executive. Over the last month, we’ve looked at the fundamentals and why you need to care about newer trends and technologies, how some have successfully incorporated social media into their institutions way of doing business, the need for individuals and companies to be both authentic and transparent, and how you might personally get up and running if you’re not already. Today, we look ahead to social media in 2011.  

As this series draws to a close, cue the music*:

If this is it
Please let me know
If this ain’t love you better let me go
If this is
I want to know
If this ain’t love baby
Just say so

By now, we all know that social media marketing carries the same risks as traditional marketing. But with the continued surge in social services like those offered by Twitter, LinkedIn and Facebook, social networking platforms present powerful ways to connect with employees, consumers and shareholders of all generations.

fortune.jpg

Social media blends technology and social interaction; done right, it can be a win/win/win. Such networking co-creates value for you, your financial services company and your customers. Community building is something we all can do more of in 2011; hopefully these columns have inspired you to think about how you can get engaged and stay involved with conversations about your institution. Yes, a LOT has been written about social media, so I thought it would be interesting to share three predictions for 2011.  

Beyond the standard ‘you will train employees on the proper way to communicate with customers through social media,’ I’m excited to see the following take place:

  1. As more people take to mobile technologies (coupled with a wider adoption of tablets like the iPad), marketing efforts that incorporate online, in person and in print activities — supported by social media plans — will appreciate in value.
  2. Customer service departments take over as the main proponents of social media, with the full support of the CMO and leadership teams.
  3. Banks leverage geo-tagging applications to prepare/predict for traffic in their branches and at least one gets into social gaming in a big, big way.

Have a few predictions of your own that you’d like to share? Leave a comment for us below. While this is the last post on this particular series, our VP of Digital Strategy will be leading a panel discussion at our annual Acquire or Be Acquired conference in Scottsdale later this month. If you’re game to share your view(s) with her, I know she’d appreciate your thoughts.

*Can’t get the refrain out of your head? You have Huey Lewis & The News to thank for that.

Social Media Series: Authentic – true to one’s personality, spirit, character…


Last Monday, I wrote about how social networks are changing a bank’s customers’ experience. Well, its up to the leadership within an institution to incorporate your online interaction into your way of doing business, and today’s column looks at how one company is doing just that.

If pressed to offer just one word that that sums up social media today, it is the title of today’s post.  That is, successful financial services companies do not automate their responses, yet they do integrate links/videos/pictures and they understand that they simply influence (not control) their bank’s message.  In short, they are true to their culture, which I assume aspires to provide exceptional customer service.

In our “world-is-flat” day and age, the Internet offers around-the-clock service and availability to customers as well as an engaging platform for prospective ones. Being “always on” allows a company, bank or credit union to continuously share brand messages and gain macro-level insights into their customers’ online behavior. Regardless of your asset size, understanding the strengths and weaknesses of your competitors is a critical component for improving your own institution’s business results and profitability.

social-media-ally.jpgWhether you’re a bank with relatively small deposits, an institution of a healthy asset size or one of these banks’ competitors, social media provides smart, progressive types with a tremendous amount of research on user behavior and attitudes.  Take, for example, Ally Bank and USAA.  The former being the old GMAC; the latter, serving the military and their families since 1922.  Both provide insurance, online banking and mortgage operations to its customers.  But notice anything interesting about the twos interaction with their respective followers on a social media site like Twitter?

While I’m not suggestion the number of tweets correlates to the number of followers, a quick survey of the comments and conversation leads me to believe that USAA gets the whole concept of community building.  In fact, I reached out to both Ally and USAA through Twitter where my online inquiry to Ally was met with silence, and the one sent to USAA received a response within two hours.  Community building is something that all banks should be doing, as so much of what we do work-wise and personally requires some form of relationship with a bank.  And it’s not just on Twitter that USAA is making itself available. Take a look at its Facebook page.  As of December 22nd, 127,696 people “Liked This.” Impressive.

USAA-_Facebook.jpg

I use these two examples not to castigate Ally or promote USAA; rather, to show how one company has realized that, despite our turbulent financial environment, investing in this medium allows them to really engage with their customers, build trust and act in an open and honest manner.  Living in Washington, the word that bankers and financiers can’t escape is transparency.  So if we opened today’s post with the word authentic, let me close with transparent.  If you can marry the two, you’ll be well ahead of your competition.

Social Media Series: A little bird told me…


Part one of our Social Media & Financial Services Series

Last week, Fiserv released a white paper on the current and future interests consumers have in connecting with financial institutions through social media. At a time where everyone seems to hype the promise of social media, I admit I read through the report with a degree of analytical scrutiny and yes, intellectual skepticism. While I’m not alone in questioning certain elements of the survey (most notably, that 11% are socially connected to their bank), can we all agree that this “social media fad” just ain’t going away?

twitter-birds-icons.jpgCase-in-point, at our last two conferences, I found myself talking about the various uses of social media today with outside directors of mid-size financial institutions, community bank CEOs and service providers that work with some of the largest banks in the country. Some people get it. Others questioned my lack of concern for privacy and opening myself up to something dastardly.  

Sadly, I think some of the confusion around social media is borne from the rise of the so-called gurus and self-proclaimed experts that have sprouted up in every nook and cranny of the country. While there are quite a few talented professionals supporting our industry, so too are the snake oil salesmen preying on the less informed.

Personally, I turn to sites like Twitter as a business intelligence tool (I want to see what people are saying about us or people we work with) and Facebook to stay connected with friends and family (keeping business totally separate). But these are only two social networking sites available; yet they seem to represent all things good and/or bad when it comes to social media.

I’m here to tell you it ain’t so.

While other articles share technical or tactical advice, I’ve decided to write my next five posts about social media from the perspective of a CEO and the key leadership team at a financial institution. So let’s start with the basics: social networking platforms present a powerful new way to connect with consumers of all generations.  

According to Fiserv, “more Gen Y (ages 21 – 30) and Gen X (ages 31 – 45) consumers utilize these sites; however, a high percentage of the Boomer (ages 46 – 64) and Senior (ages 65 and up) populations also engage in social media. Want some big numbers? Try these on:

  • 94% of Gen Y engage in social media;
  • 90% of Gen X engage in social media;
  • 78% of Boomers engage in social media; and 
  • 65% of Seniors engage in social media.

So according to the technology firm, that shiny new iPad for Grandma might actually be put to good use this winter.

As I said, I don’t blindly accept these numbers. I do, however, think they are relevant to our community. For as technology capabilities continue to expand and evolve — and an ever increasing number of your customers connect to brands and businesses online — I have to ask: are you ready?  

This is not a rhetorical question; to-date, social media is a communication channel that many banks have failed to leverage. So why should today’s financial executives and directors care about social media — and how can they make it work for their institutions? The easy answer? There is gold in them hills: social media blends technology and social interaction; done right, such networking co-creates value for both the bank and it’s customer.  

Social media can take many different forms — not just Facebook and Twitter. The space is ever growing, and incorporates online forums (think the early days of AOL), blogs like this one (or DCSpring21), wikis (hopefully more wikipedia than wikileaks), photo sharing sites like Flicker, video sites like Vimeo and YouTube, and rating or social bookmarking ones like Digg.

social-media-connect.jpgFor financial services companies, social media allows for collaborative projects within an organization (e.g using a twitter-for-the-enterprise tool like Yammer), micro-blogs (e.g. Lincoln Financial’s amazing future self site), and yes, social networking sites (e.g. Facebook).  

But like most things in life, what you and your institution get out of social media coincides with what you put in. Because the big thing you need to come to grips with is the fact that you no longer wholly control your message…at best, you influence it. So as the use of social media tools become even more ingrained in so many consumers’ everyday lives, these are channels you can no longer afford to ignore.

For more on the social media series, please read the following posts:

  • Part 2: Is your bank using social media?
  • Part 3: Authentic – true to one’s personality, spirit, character…
  • Part 4: Getting Up and Running
  • Part 5: A Look Ahead