Thursday, December 15, 2011

Bank Marketers Face Challenging Times With Great Opportunity

After two years of responding to government intervention into the revenue structure of financial organizations, bank marketers are now faced with heightened levels of competition, a more demanding customer base, an unfavorable rate environment and, in many cases, a shrinking budget. But potentially most challenging to financial institution CMOs I meet in my travels is the ability to respond to the shift in the ways we interact with customers and prospects.

The flood of data, channels, devices and changing consumption patterns have marketing departments in financial organizations of all sizes trying to determine if they are prepared. They are reviewing the skills sets that will be required to take advantage of the opportunities these challenges present, and realizing that gearing up may require a heightened level of personal engagement from all members of their team.

These challenges are reinforced by a set of studies that I recently reviewed that surveyed marketers from all industries. IBM's 2011 Global Chief Marketing Officer Study entitled, From Stretched to Strengthened found that the majority of CMOs feel unprepared when it comes to the explosion of data available (71%), the impact of social media (68%) the growth of channels and devices (64.5%) and the movement from mass markets to micro markets (64.5%).

More importantly, several of the areas where CMOs stated they were least prepared were also those they believed would be the most important for their businesses. As shown below, each of the top four areas of preparedness gap are also in the quadrant where the impact on the marketing function was thought to be the highest.

Preparedness vs. Impact on Marketing Comparison - IBM CMO Study, 2011

But while there were many references to the growing analytical side of online measurement and monitoring in the IBM study, only 26% of CMOs surveyed track blogs, 42% track third-party reviews and 48% track consumer reviews. The need for a much better understanding of ROI was referred to many times in the study, going as far as saying that the CMO of today is in position similar to that of the CFOs 10 years ago.

Turning data into action was also the primary organizational issue in Unica's Annual Survey of Marketers, with the need to harness the power of the mobile device and to leverage the potential of truly integrated marketing also ranking high. As with the IBM study, the Unica research indicated that there is a significant gap between desire and achievement, with much more progress needed in the use of insight for better customer communication and measuring the impact of efforts across channels.

Three Most Important Issues for Marketers - 2011 Unica Survey of Marketers

What was interesting about the Unica study was that, while social media definitely registered as the champion of emerging channels in terms of use (53%), the enthusiasm for the channel was less than in recent years, possibly signaling the desire to see more tangible results from efforts. This also seems to be true in the bank marketing industry, where many are questioning the financial impact of investments made in social media and wanting to connect 'fans' and 'follows' into leads and sales.

Just like most other industries, bank marketers are being tested daily during a period of unparalleled change and will be required to respond to these new market realities:
      • The consumer is definitely in control of the business relationship, with the ability to shop with a click and change bank partners without ever confronting us face-to-face.
      • While margins are thin and the tolerance for fees is low, delivering customer value is the table stake in the game both from a perspective of products offered as well as access afforded.
      • There is a greater need for seamless integration of marketing channels with an eye towards both effectiveness and efficiency.
      • Accountability for marketing investments has never been more important at a time when bank revenues are at a premium, with new tools for measurement and skills for assessment being leveraged.
      • Each of the above realities will require a more robust and continuous level of testing as tools, approaches and consumer attitudes continue to change.
Over the last few days at the National Center for Database Marketing Conference, where hundreds of practitioners met to discuss current trends and share success stories from a variety of industries, one thing was clear . . . there is no silver bullet. In fact, most marketers are working hard to hone their skill sets in a very fluid environment.

The good news is that there are amazing solutions being developed daily to help marketers do their jobs more effectively. The bad news is that the change is continuing at a more rapid pace every day. To be effective, bank marketers will need to have both great learning agility and adaptability to 'what's next'.

What do you see as the biggest challenge facing your marketing department in the coming year? Is your team prepared for the changes ahead? What are you doing to prepare for the new marketplace?

I would love to hear your comments below.


  1. Financial institutions need to mine their current customers through on-boarding. By focusing their attention on building stronger relationships with the people they already do business with they will acquire more loans, deposits, and services at a much cheaper cost.

  2. ANY of them that do not follow my blogs will live to regret it.

    Unlike the Banks and other institutions of today, MY reputation for delivering only safe products to my clients is blemished only by the mortgage contracts that I sold.

    BUT I was the one that wrote to The Times telling them that the mortgages system would one day face a disaster.

    So who will people trust? Me of the others, when I launch the world's FIRST safe Housing Finance Scheme?

    And which bank has shown ANY interest? Two - one actuary advised probing. The other got a report on an earlier more complex version but the manager loved the concept.

    Now I have one that will really make headlines - with no banks on board. Well I have been told that this is how banks behave. My source: a top CEO of a top financial institution who supports my ideas and helps me to launch - next year.

    You have been warned. Any bank interested in helping with the launch and grabbing the whole world's attention?

    BASEL III watch out - you will be outdated. BASEL III does not protect the people - it protects the institutions at the people's expense.

    BASEL III is not required if you just use some common sense.