The Great Exchange

As I posted earlier, we spent the first few days of this week in Orlando as participants at Americas Community Bankers Great Exchange Conference. The conference was great, and I would like to thank all of those that we met, talked to and shared ideas with during the conference.

While we were involved in two presentations: “How to Differentiate Your Bank” and “Life-Cycle Marketing,” perhaps the most interesting session we participated in was Tuesday’s peer group session, where we discussed three issues that attendees identified as most pressing to them. While a majority of the people in the room held marketing positions – these most pressing issues extend well beyond marketing, and are issues that many institutions across the country are currently facing:

Attracting Younger Customers
Many community banks are faced with an aging customer base; and, as a result are under pressure to attract younger customers to feed the new customer pipeline. I found it interesting that people in the session couldn’t understand why the younger generations would be attractive targets. Their reasons included everything from low incomes to irresponsibility; but, these are pretty big generalizations, and if younger generations aren’t targeted in some capacity, who’s next in line? It’s critical that community banks first realize the importance of targeting the younger demographic segments and follow that with the development of an aggressive strategy – which has implications well beyond the marketing department.

Growing Core Deposits
We have heard this one before – and growing core deposits will continue to be an issue for community banks. Especially in the wake of investment firms like Edward Jones and Charles Schwab continuing to market themselves more aggressively to a wider audience. As with most industry-wide issues, there is not a universal answer here. Real sustainable growth in deposits is more likely to come as you communicate and deliver a real value to your customer – and move away from rate or product driven promotions. And, growing core deposits requires a thorough understanding of your market, the potential within your market and, ultimately, a strategy for achieving that potential.

Training Your CEO
We found this issue to be one of the more interesting issues to arise in conversation – but, once again, the room was largely those in marketing positions; and it’s been our experience that there is usually a disconnect between marketing personnel and the CEOs of financial institutions. So, we discussed ways for marketing heads to better communicate the value of marketing to their CEOs who, in many cases, think of marketing as too “touchy feely.” Some of the more convincing ideas involved discussions of best vs. worst case scenarios, and conducting thorough research into costs and projected ROI before presenting ideas for approval.

Overall, the conference seemed to be a success. I would like to invite anyone to share their thoughts, ideas and comments about the conference right here. And, as always, if you have any questions about our sessions during the conference, please feel free to email me at bwalen@formarketinsights.com.

Three Words

It’s a very simple question; yet, it proves to be a challenge for many community bankers to answer:

What three words best describe how your institution is different from the competition?

We love this question because it is a challenge. It’s even more challenging when we let people know that their answers can not include words like: local, good service or community bank. And this was exactly the question Joe Sullivan posed to the audience this morning during his session: “How to Differentiate Your Bank” at America’s Community Bankers’ Great Exchange Conference in Orlando.

The question encourages people to get down to the core; to emphasize their institution’s strengths; and it starts to inform the first steps of a differentiation strategy. The session was very well-attended this morning, which is an indication to us that differentiation is becoming a more pressing issue among today’s community banks. In addition, the participants asked some great questions which I hope to post here with respective answers within the next few days.

Until then, what three words best describe how your institution is different?

Reality Check

Most financial institutions state growth as one of their goals every year, and 77.8% view branching as their chief avenue to grow. Institutions are seeing mixed results; however, because branching is no longer an automatic success. Instead, many institutions are turning to organic solutions such as differentiation. We at Market Insights are encouraged by this, because it’s something we’ve been talking about for years.

Still, most institutions are spending a lot of time, money and energy pointing out the differences between organizational structures and ownership, and virtually no time pointing out the things that make their institutions unique. They haven’t seen the results that they expected, and now they’re wondering, why?

CALLING ALL CREDIT UNIONS AND LOCALLY OWNED COMMUNITY BANKS

It’s time for a reality check. It’s time to check in with how consumers view you. Step out from behind the teller line, away from your desk, out of the office and separate yourself from everything connected to your job.

Now ask yourself:

Do you care what type of institution holds your checking account? Does it matter who’s paying that 5% on your CD? How much of the interest from your loan do you expect to benefit from through Community Reinvestment?

The simple answers to these questions for most consumers are: No. No. and Huh?

It’s time to take that rare, proactive approach to answer the public’s age old question of, “What does that mean to me?” Customers, members, and clients alike have a hard time connecting with the classification of any institution, because quite frankly, they don’t see how it affects them. If you can show the general public some real value (in their eyes, not yours), then you can start to build a case for your institution.

Where do you start? Avoid the Credit Union vs. Bank and the Community Bank vs. National Bank comparisons; and instead, focus on how your individual institution is different from every other institution in Bankland. Figure out what you can provide that is truly unique to your institution. Then figure out how to communicate your uniqueness to the public. After all, your most compelling case for Community Banks is also a compelling case for your Community Bank competitors.

Next week in Orlando

I am looking forward to America’s Community Bankers’ Great Exchange Conference in Orlando next week, and wanted to get a pulse from anyone who is also planning to attend. We’ll be exhibiting and Joe Sullivan will be presenting two sessions during the conference; we would like to give you the opportunity to ask us questions before the conference – which we will answer here and incorporate into the sessions where appropriate.

Session Details:

Monday, April 23, 2007
10:30-11:45am

How to Differentiate Your Bank

Find out how to determine the key factors that differentiate your bank and communicate effectively to employees, customers and other stakeholders. Defining your brand is more than a logo, it’s key message points and action that supports making your bank standout.

Wednesday, April 25, 2007
8:00-9:15am

Life-Cycle Marketing: From the First Account to Retirement Plan

Learn how to build a life-cycle marketing strategy that delivers financial services targeted to key life milestones from saving for that first new bike (or iPod) to going to college, buying a car or residential property, and starting a family. Find out how to obtain and track important data to anticipate financial services needs to match each customer’s evolving needs.

If you’re planning to be at the conference and would like to talk to us about the sessions, our services and/or your unique challenges, send me an email at bwalen@formarketinsights.com or stop by and see us during the conference – I’d be glad to set aside some time for a conversation.

We’ll look forward to seeing some of you in Orlando.