100 Years Later, Marketers Still Have Difficulty Measuring Up

At the turn of the last century, store merchant John Wanamaker stated, "Half the money I spend on advertising is wasted; the trouble is I don't know which half."

Based on just released research from Ifbyphone, those may have been the 'good old days'. The report, 2011 State of Marketing Measurement Report found that, while 82% of CMOs expected every campaign to be measured (what's up with the other 18%), only 29% of the marketers believed they could effectively measure ROI of each channel.

Potentially more troubling was the finding that more than a quarter of marketing assistants did not find the measurement of results important. "It's concerning to hear that many marketers don't understand the importance of measuring the success of their campaigns," stated Irv Shapiro, CEO of Ifbyphone. "We need to determine the root cause of this sentiment, and whether it's a lack of education in best practices, or rather a gap in leadership and mentoring. Businesses can only get better at marketing if they are held accountable for improving upon what didn't work in the past."

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%).

As Channel Proliferation Increases, Consumers Still Prefer and Trust Direct Mail for Financial Services Communication

According to a just released consumer channel preference study from marketing services firm Epsilon entitled, The Formula for Success: Preference and Trust, 36% of consumers prefer to receive financial services communication through the mail (compared to only 8% preferring email), while 50% state that they pay more attention to direct mail than email. Interestingly, U.S. consumers actually receive an emotional boost from receiving mail, with 60% agreeing that they "enjoy checking the mailbox."

The 2011 study is the latest in a series of studies conducted by Epsilon around communication channel preferences. In the latest study, it was found that the preference for direct mail extended to the 18-34 year old demographic, highlighting the risk in making assumptions around age and channel preferences. Part of this preference bias compared to email and other channels could be caused by the level of trust associated with the channels reviewed, since 26% of U.S. consumers found direct mail to be more trustworthy than email. The least trustworthy channel continued to be social media, with the channel only being viewed as trustworthy by 6% of consumers. Consumers also found direct mail to be more 'private' than email or online channels (important for 37% of consumers).

Benefits of Social Media Sign-In Must Offset Privacy Concerns

One of the most important yet tedious components of opening a new account account at a bank is completing the new account form. Whether done at a branch or online, the new account registration process is the first (and sometimes only) time when a bank can learn about a customer's needs, behaviors and expectations of the relationship.

Unfortunately, this process has changed very little over the years and is usually only comprised of gathering the most rudimentary of information from the potential customer (name, address, phone, social security number, account type desired, etc.) and collecting funds/obtaining a signature. The rationale for only collecting the most basic information has been to balance the desire for insight with a respect for the customer's time. This balance becomes even more important in the online world, where a customer can easily abandon the account opening process with little repercussion.

Online Account Opening Abandonment
According to a recent report from Javelin Strategy & Research entitled, 2011 Online Account Opening: Faulty Process Hobbles FIs in the Battle for Customer Acquisition Profitability and Retention banks lost close to $1 billion and 5.8 million customers due online abandonment during the account opening process over the past year. In fact, it was found that only 53% of new account applicants were able to successfully open and fund their new accounts. While some may later go to a branch, many new customers may be lost forever.

Direct Mail Still Has Impact in Digital World

As more and more marketing dollars are funneled into digital and social media, and as postal rates continue to climb, direct mail marketing has been getting less and less attention. While there is definitely a case to be made for building a multichannel communication plan integrating a number of different channels to reach customers, recent research indicates that direct mail should still be part of the mix.

A study entitled, Using Neuroscience to Understand the Role of Direct Mail conducted by the research company Millward Brown found that direct mail actually leaves a deeper impression on the human brain than its digital counterpart. The research project used functional Magnetic Resonance Imagery (fMRI) brain scans to show that our brains process paper-based and digital marketing differently and that direct mail actually created a greater emotional impression than digital communications.

Banks Must Develop Apps for Tablet Banking

According to Javelin Strategy and Research's just released third annual report, '2011 Mobile Banking Financial Institution Scorecard - Money Begins to Move on Mobile', tablets are the next wave of technology that will have a major impact on mobile banking. Similar to the smartphone, consumer adoption of the tablet is increasing rapidly and financial institutions will need to quickly accommodate this platform with a user experience that is unique and different from any other platform.

"The tablet is going to be a game changer.", according to Mary Monahan, executive vice president and research director at Javelin who oversaw the development of the new research. "Eight percent are already on a tablet, which is a huge amount when you consider how long the tablet has been out. . . . We think, with the mobile tablet, we will see much more mobile banking. " Link to Bank Info Security interview with Mary Monahan, Tablet: A 'Game Changer for Mobile Banking.

Of the top 25 banks reviewed in the study, 23 offered at least one form of mobile banking services (92%) compared to only 63% in June of last year and 48% in July 2009. In addition, 65% of the banks offered 'triple play' support (SMS text banking, mobile browser and downloadable apps). This was the first time more than half of the top banks supported all types of mobile phones for consumers to access their accounts whenever, wherever and however they wanted.

Big Bank Vulnerability to Attrition Provides Opportunity

On the heels of Bank Transfer Day, a new study suggests that many of the top banks in the country are vulnerable to continued outflows of customers and deposits. According to a just released 84 page study entitled, "2011 Retail Banking Brand Vulnerability Study" conducted by the Connecticut-based boutique consultancy cg42, the nation's top 10 banks are at risk of losing almost 9% of their customers and $185 billion in deposits during the next 12 months.

The study, based on surveys of 5,600 customers of the top U.S. banks used a proprietary Brand Vulnerability Index (BVI) to compare each bank's risk of attrition, decreased acquisition effectiveness and potential financial loss based on the frequency of customer frustrations; customer sharing behavior (for example, disclosure of frustrations on social media); the impact of frustrations on customer behavior; and the uniqueness of those frustrations to a particular bank. 

Source: cg42 Brand Vulnerability Index, 2011

Banking Industry Leaders Discuss Findings of Intuit Financial Management Survey

In conjunction with the release of Intuit Financial Services' 4th Annual Financial Management Survey, Banking.com hosted a Twitter Town Hall yesterday, bringing together financial industry leaders to discuss loyalty and channel migration as well as some of the challenges and opportunities facing the banking industry. The following is a recap of the very robust one hour dialogue. (the complete transcript can be found using #IFSsurvey on Twitter)

The Town Hall discussion began around the issue of customer loyalty and the finding that many consumers thought their financial provider was not 'in touch' with their needs. Given the events of the past week, where many large banks reversed decisions around the implementation of fees due to highly vocal negative sentiment amplified by social media and credit union trade group support, most participants believed that banks are not leveraging current insight and technology to make better decisions and provide value added service. 

Tobin Lee (@Tobin_Lee), Intuit Financial Services spokesperson stated, "It is time for a banker mindset shift; cultivating deeper relationships, more meaningful engagement and stronger advocacy for growth". Campbell Edlund from EMI (@EMI_mktg4sales) added, "These findings provide a very strong argument for a communications plan around the customer lifecycle". 

Consumers Are Increasingly Using Multiple Devices to Support Banking Needs

Traditional bricks and mortar facilities are being visited less as the use and importance of online and mobile devices continues to increase according to Intuit Financial Services' 4th Annual Financial Management Survey released yesterday. According to the survey, while a large percentage of consumers still manage their finances offline (45%), the percentage of consumers using online services from their financial institution has continued to increase annually; increasing 11% since 2009 to 38% in 2011.

The main reason consumers said that they don't visit their bank branch as often as they used to is because they are visiting their FI's website and use their online banking tools (76%). These online banking tools are so important that one-third (33%) said they would switch their relationship to another institution if there were better online tools offered elsewhere.

Source: Intuit Financial Services' 4th Annual Financial Management Survey

The importance of online tools was reinforced by Brett King, author of the bestseller Bank 2.0 and founder of direct mobile banking start-up Movenbank at this year's BAI Retail Delivery Conference in Chicago. "Banking is quickly changing from a place you go to something you do everyday," stated King. He provided a chart from the American Bankers Association and Nielsen Research that illustrated the channel migration occurring today and projected in the future.

Did Social Media Cause Big Bank About-Face?

A month after Bank of America and other large banks announced the levying of a monthly debit fee for debit card use, virtually all of the big banks that were either testing or had implemented a debit fee have backed off of their plans amid a groundswell of negative publicity.

On Friday, Chase and Wells Fargo announced that their respective debit fee pilots would end, and today SunTrust and Regions Bank announced a change of fee policies with refunds for fees already charged customers. Over the past week, many of the other top banks in the country like U.S. Bank, PNC Bank and TD Bank made strong statements that they would not be implementing debit fees. And  in an surprise move (after the initial posting of this blog), Bank of America rescinded their planned $5 debit fee based on 'consumer concern'.

Was this unprecedented big bank about-face caused by the significant public response initiated through blogs and social media?

Almost immediately upon the announcement of the $5 fee by Bank of America, a grassroots movement began on Facebook under the name of 'Bank Transfer Day'. President Obama and Richard Durbin blasted Bank of America for their decision and trade publications like the Credit Union Times immediately jumped on the Bank Transfer Day bandwagon, sharing local and regional initiatives while encouraging member organizations to extend November 5 Saturday hours.

Kaching Ushers In New Era of Mobile Banking

The Commonwealth Bank of Australia has broken new ground in the advancement of mobile payments by introducing a new iPhone application that allows users to pay friends or businesses using Near Field Communication (NFC), Facebook identification, an email address or a mobile phone number.

Kaching (pronounced like the cash register sound Ka-Ching)  will initially only be available for users of the iPhone 4 and 4S (with soon to follow Android support) using a specially designed case with built in NFC chip. With this case, the phone will allow the user to simply tap and pay at a PayPass terminal. 'This banking breakthrough marks a significant milestone in the evolution of how people pay and receive money from each other," stated Commonwealth Bank of Australia chief information officer Michael Harte.

According to a CBA spokesperson, the use of a specially designed NFC case is only an interim solution until iPhone, Android and other smartphones introduce new versions of phones with NFC integration built in. In what some believe could be the beginning of the end for plastic credit and debit cards and potentially even cash, this form of electronic payment would be conducted 24x7 in real time if both sides of the transaction are CBA customers and one to two days if the payment is made to a customer of another bank.

Relationship Trumps Fees for Small Business Bank Satisfaction

At a time when discussion around higher bank fees is at a fever pitch, small businesses value the human touch more than ever and are more satisfied with their banks than they were in 2010 according to the just released J. D. Power and Associates 2011 U.S. Small Business Banking Satisfaction Study.

The study, which ranks satisfaction in the areas of product offerings, facility, fees, account information, account manager, credit services, problem resolution and account activities saw all of these categories except fees improve on a year over year basis.

"Contrary to popular belief that most customers are unhappy with their bank, small business banking customers are more satisfied than last year with nearly all aspects of their banking experience," stated Michael Beird, Director of Banking Services at J. D. Power and Associates. In a webinar done yesterday by the firm, it was emphasized that having a person assigned to the relationship 'who understood their business' was a primary reason for improved satisfaction. It was also mentioned that banks should not 'boil the ocean' trying to be the best in each category, but should leverage relationship managers to improve performance in as many areas as possible. In fact, while missing a single KPI does not impact satisfaction scores significantly, missing 3 or more measures can dramatically impact satisfaction.

Is Bank Transfer Day a Small Bank Trojan Horse?

"A Good Day to be a Credit Union" is the headline of an article from Myriam Digiovanni in the October 19 Credit Union Times discussing the upcoming November 5 "Bank Transfer Day".

REALLY??

According to numerous news articles and coverage in both mainstream and social media, community banks and credit unions across the country are rallying around the anti-bank sentiment that has germinated from the announcement of a $5 debit card fee by Bank of America on September 29 and the increase in fees by other large banks. Not only have new account openings reportedly increased at several large credit unions, but social media traffic on the official Bank Transfer Day Facebook page and on other national credit union sites such as www.ASmarterChoice.org and www.CULookup.com have also seen spikes.

But is all this attention and potential new business a fortuitous gift or a potential threat to the well being and revenues of community banks and credit unions? It may just depend on who you ask and how the financial institutions on the receiving end of the disgruntled customer exodus handle their new customers and members.

Siri: My Bank 2.0 Concierge

The introduction of Siri as the star feature of the new iPhone 4S already appears to be setting the stage for a major change in the way people interact with their phones. By combining insight reminiscent of IBM super computer Watson and the voice of a willing assistant, marketers from all industries can leverage this technology to simplify the way we complete tasks with voice commands. There is no doubt that Siri's introduction represents the mainstreaming of voice recognition and natural language interface in much the same way that the introduction of the iPad mainstreamed tablet computing.

Siri represents something of a paradigm shift in how we will interact with mobile devices going forward, and there are few places where this movement from keystroke to voice command will impact business more than banking. While today's voice technology in banking does fairly well in being able to recognize basic transaction commands and process rudimentary transactions, leveraging the technology and humanized tone of Siri and similar programs will allow banks to process an endless array of interactions seamlessly from the convenience of the phone.

Collecting Behavioral Insights Increases Value of Relationship

Over the past 30 years, the new account opening process hasn't changed very much. Sure, there is a far greater use of technology at the new account desk and there is the opportunity to open accounts online, but the overriding objective for most banks is still operational efficiency as opposed to building the foundation for a lasting relationship.

This is why new customer onboarding has become so important to the banking industry. Without a rapid deployment of communication around the best way to use the product(s) opened and encouragement to expand the functionality of the product by taking advantage of engagement services such as online banking, direct deposit, bill-pay, mobile banking, etc., the customer experience will be lessened and the potential for attrition increases.

In fact, first year attrition continues to be a strategic challenge at most banks, with defection rates of 20%, 30% or even 40% not being uncommon. For those organizations with a multi-touch, multichannel onboarding program, however, the rate of attrition drops significantly. Unfortunately, even for those banks that have an onboarding program in place, the program may not be optimized due to a reliance on transactional and demographic insights as opposed to psychographic and behavioral insights.

Marketers Not Aligned With Consumer Marketing Channel Preferences

Technology is rapidly changing the way consumers interact. We wake up each day to a barrage of messages coming from both traditional and new media. We check our Facebook posts and text messages at the same time we watch television, read the newspaper, listen to the radio or conduct work online. 

Marketers have long recognized the shifts in media consumption that are redefining how customers absorb information and offers. However, recent studies indicate that marketers may not be in total alignment with consumers as to how the new media is consumed and their degree of reliance on various media for making buying decisions.

A new research study by Acxiom entitled, Tug of Love: The Changing Relationship Between Consumers and Brands found that more than four in five people (82%) believed they were in control of the relationship between themselves and their brands (with 'control' being defined as receiving the information they desire, when and through the media they want). This was more than 50% higher than marketers thought, indicating that 'push' broadcast marketing is quickly being replaced with 'pull' marketing where the individual is in charge of message consumption.

An Open Letter to BankSimple

On January 18, you impressed me when Rachel Giuliani from BankSimple wrote an email to me unexpectedly asking me for my "loves, hates, quibbles, hopes and dreams" regarding my financial life. Her email seemed surprisingly personal coming from a bank I had signed up to be part of a beta test several months earlier. In her letter, she piqued my interest when she told me she represented a 'new' bank that was committed to building the best possible customer service without surprises.

Her timing was great since I had been a bit upset with my current bank. Not only had my bank changed their fee structure without a clear notification, but they seemed to be looking for new ways to generate fees for actions I had become accustomed to not paying for. Sure, I could avoid the fees as I had in the past by maintaining a steady balance in my account, but even that had been raised to a level that really didn't correspond to the value I felt I was receiving from the bank.

You made it so easy for me to respond to Rachel's email since she even provided her email address (rachel@banksimple.com). And, as opposed to feeling like my response would end up in some black hole of customer service or would be responded to by a person not even named Rachel, it was easy to see that my new pen pal had been hired just a week earlier as the first of two customer service representatives to provide 'brilliant customer service'.

Banks Need to Make Love Not War

Over the last three days, leaders from the top banks across the country convened at the Barclays 2011 Global Financial Services Conference in New York to present investors with a review of results so far in 2011 and provide an outlook for 2012. Unlike the past two years, where this conference was dominated by bank presentations focused on TARP, credit risk, capital reserves and liquidity, this year's presentations highlighted the opportunity for organic growth and improving client's share of wallet.

For instance, Jim Rohr, Chairman and CEO of PNC Financial Services Group said that PNC will be focused on adding new customer relationships and cross-selling going forward. "If we cross-sell new clients, we'll see an almost $220 million increase," Rohr said during his presentation.

Similarly, Tim Sloan from Wells Fargo discussed significant opportunities that exist as a result of the integration of Wachovia. According to the presentation done by Sloan, there is a variance of an average of one product per household between legacy Wells Fargo (6.25) and the results from the Eastern footprint (5.29). He further illustrated that there is a variance of two products when legacy Wachovia is compared to the top Wells Fargo region (7.36).

How Effective Is Your Bank's Social Media Strategy

Whether it is a company asking you to visit their Facebook page and 'Like' a product or brand or a peer wanting to keep in touch on LinkedIn, people are continually being driven to social networks according to Nielsen's latest report on social media. In this first report of its kind by Nielsen, it was found that social networks and blogs reach nearly 80 percent of active U.S. Internet users, and that social media accounts for 22.5 percent of the time Americans spend online. As expected, Facebook was by far the strongest social media brand.

In addition, it was found that nearly 40% of social media users access content from their mobile phone and that Internet users over age 55 are driving the growth of social networking through their mobile devices. As a result, "there is a need for companies to engage more strategically in the social space than they do currently," according to Radha Subramanyam, senior vice president for media and advertising insights and analytics at Nielsen.

Social Media Demographics, Nielsen Q3 2011 Report on Social Media

With networking continuing to increase, and the need to connect with customers and prospects in the most efficient and effective manner possible, more banks are using social media as part of their overall communications strategy. But, while interacting with customers through social channels can be effective, measuring the effectiveness of your marketing investment is no easy task. In fact, while many of the largest banks in the U.S. and overseas are leveraging many of the primary social networks, their strategies usually involve non-financial initiatives such as sweepstakes, charitable causes, etc. 

Differentiation Is Key Component To The Value of Rewards

Yesterday, it was announced that merchant-funded rewards leader, Cardlytics had signed a global strategic alliance with loyalty leader Groupe Aeroplan allowing for the expansion of transaction-driven marketing (TM) to Canada and abroad.

Unlike traditional rewards programs used by financial institutions that are points based and driven by the volume of transactions processed, the Cardlytics platform provides the ability to present highly targeted retailer offers to customers through a bank's online statement, mobile device or email based on the customer's recent transaction activity. Since the Cardlytics decisioning tool resides within the bank's firewalls, customer insight never leaves the bank and retailers never have access to proprietary customer information. In addition, as opposed to the points reward program being a cost to the bank, the Cardlytics pay-for-performance model not only eliminates risk for the merchant, but also can provide much needed revenues for the partner bank.

Brand Advocates Should Be Cultivated

Every bank talks about customer loyalty and advocacy, but many find it difficult to define what a brand advocate is, or what the value may be to their bank.

According to a study just released on the actions, motivations and influence of brand advocates conducted by Dr. Kathleen Ferris-Costa at the University of Rhode Island for social networking leader BzzAgent, brand advocates are 83% more likely to share information about a product than typical web users and 50% more likely to influence a purchase. Since they enjoy solving problems and helping other to make purchases and decisions, they are also 75% more likely to share a great experience and three times more likely to share their opinion with someone they don't know (they are also more likely to share a bad experience). In other words, this segment of your customer base acts and thinks very differently from your typical customer and should be searched out and cultivated.

Banks Slow to Embrace Potential of Tablet Computing

One year ago yesterday, Apple announced it had shipped it's first million iPads. Since then, it sold 14 million more in 2010 and is expected to sell between 30 and 40 million units in 2011 despite supply challenges in Japan. New research from Gartner predicts that global tablet sales will increase from 17.6 million in 2010 to nearly 70 million in 2011 and close to 300 million by 2015. During this time, the average price should fall to about half of the current level, which is just under $500 for entry level models.

Given this growth trajectory, and with banks continuously touting their desire to 'enhance the customer experience', how has the industry completely fallen asleep at the developmental control switch when it come to leveraging the tablet computer for engaging the customer? Given the demographic profile of the early adopting tablet owner (higher income, technology savvy, business traveler), and the retention experience found with mobile banking, it is even more surprising that only a handful of banks have even introduced iPad banking applications.

Revenue Replacement in a New Regulatory Environment

In my travels over the past 18-24 months, a single unifying theme seems to be of primary importance for all of the banks I visit . . . the need to find new sources of revenue to help offset the impact of environmental, competitive and regulatory changes that have occurred in our industry. With the potential of the Durbin Interchange Amendment hanging over our heads, lost overdraft fees from Reg E in our rear view mirror, the ability to pay interest on business deposits and the implications of the Card Act just 18 months ago, bank earnings are being squeezed from all directions.

According to Novantas, the regulatory changes alone have slashed retail banking revenues by more than $50 billion per year compared to pre-crisis levels. To make this number even more staggering, Novantas estimates that the equivalent cost savings needed to offset these lost revenues would entail closing 50,000 branches or would require a 1500% increase in maintenance fees. Neither of these options are feasible.

Seven Steps to Reduce Offline and Online Bank Product Purchase Abandonment

According to Forrester Research, the number of consumers using the Web to research, buy and manage their financial products has grown steadily. In 2009, 63% of US online adults who researched a financial product did so online, with the number increasing over the past two years. Virtually all products were researched, from mortgages and student loans to savings and checking accounts. Interestingly, more than a third who researched products did so exclusively online.

The Web provides inherent advantages when researching and applying, including the convenience of being able to research whenever the user wants, the ease of comparing providers, and in some cases the ability to open the product or service in real time. While the use of the Web is correlated to age categories (with Gen Y using the Internet more frequently), all age groups are increasing their use of online and mobile channels to evaluate options before purchasing financial services.

The Business Case for Onboarding

SELLING STRATEGIES

Over the past several months, I have spoken to large and small groups of bankers from organizations of all sizes and have been surprised by the number of banks that still do not have a formal onboarding process for customers opening new accounts. 

Given the amount of trade press, webinars, white papers and research done on the value of onboarding, I would have thought that virtually every bank would be communicating with customers aggressively during the instrumental 90 days after account opening.

According to a J.D. Power and Associates study, 2011 U.S. Retail Banking Satisfaction Study, one of the most powerful ways to unlock customer value is to build a multi-channel, multi-touch onboarding process that begins at the new account desk with needs identification and extends to a post-sale communication sequence that builds engagement and share of wallet.

7 Common Sense Ways to Increase Bank Cross-Selling

SELLING STRATEGIES

Every financial institution needs to generate a steady stream of new customers, yet one of the easiest and most steady sources of new businesses and related revenue is to reach out to current customers for additional business.

With the cost of acquiring new retail, small business or commercial customers being five to ten times the cost of retaining an existing one, and with the average spend of a repeat customer being 50- 100 percent more than a new one, bank marketers need to remember that the most efficient investment of marketing funds is to market to customers that already bank with you.

Here are 7 relatively easy techniques to do just that:

1. Start With the Lowest Hanging Fruit: The easiest sales that can be made to current customers are engagement services that help a customer use an account they already own. These 'sticky services' include a debit card, online banking, direct deposit, bill pay, automatic savings transfer, personal line of credit and security solutions such as privacy protection. These services help to ensure the customer will use the products they own more frequently, will significantly improve retention and will help to improve the overall customer experience.
   
   
2. Stay Connected: About a year ago I was talking to a friend who said, "I was very impressed with how much love my bank gave me when I opened some new accounts, but amazed that I never really heard from them again except to tell me about new fees". While some banks have very successful onboarding programs to help stay connected with new customers, a surprising number of banks still rely on the customer to onboard themselves. And unless the customer expands their relationship, their bank may never include them in a model-driven cross-sell program.
   
   
3. Continually Evaluate Upsell Opportunities: Rather than using product-driven programs that are done seasonally, consider funding more customer-focused programs that evaluate each customer's propensity to open one or more of the products and services you offer. With some of my clients, we evaluate each customer's transactional, product ownership and even behavioral characteristics to determine what would be the most likely next purchase and whether the propensity to purchase is high enough to make an offer. In some of most successful programs, this evaluation of opportunities is done monthly, with smaller mailing universes, but much higher response rates.
   
   

QR Codes Are Mobile Gateway for Bank Marketers

As the use of smartphones increases, more and more marketers are leveraging QR, or quick response, codes to drive prospects and customers to promotional content or to expand a conversation. While usually a black and white square, QR codes can also be colorful and can have patterns or logos embedded in them and around them, as long as the code itself works properly.

To access, the viewer only needs to download one of several free QR code reader apps on to their smartphones (some phone are already loaded with this application). When the viewer sees a QR code on a poster, billboard, print advertisement or even on a product itself, they focus their camera on the image and the application will recognize the code and automatically open up the link to an offer, video or other unique content in the phone's browser giving the marketer the ability to share information or offers immediately at a very low cost (marketers can generate QR codes for free).

DDA Under Siege

As part of the planning committee for this year's BAI PaymentsConnect 2011, I would love to take credit for the great title of this program track, but I am not sure even the great minds at the BAI could have foreseen how apropos "DDA Under Siege" would be for bankers attending this year's conference that wraped up today in Phoenix.

If there was a unifying theme from the many sessions I participated in this week, it was that revenue lost from last year's Reg. E and this year's Durbin amendment can not be completely recaptured through repricing. Instead there needs to be a stronger focus on targeted customer acquisition, share of wallet growth strategies, retention, product innovation and cost containment. While everyone at the event seemed to be interested in what others were going to do around checking repricing, the energy was definitely focused on building a stronger platform for the future.

Checking Changes Make Onboarding and Cross-Selling More Important

Over the past several weeks, many of the larger banks across the country have announced significant changes to their checking account continuum, including elimination of traditional Free Checking, discontinuation of rewards programs, ceasing reimbursement of foreign ATM fees, as well as potential fees and transaction limits on debit cards.

While each of these strategies are intended to reduce costs or generate revenue in response to Reg E and the Durbin Amendment, these changes could also present a challenge to banks as they seek to increase engagement and gain share of wallet. This is because debit card use and rewards program enrollment were two of the more important account engagement criteria and basis for a broader relationship growth.

Bank Marketers Should Focus on Metrics That Matter

Early in my career, heading a bank marketing department, I remember the frustration of my department being viewed as a cost center as opposed to a revenue contributor. Part of the problem was that it was easy to see the marketing spend each month as part of the bank's expense reports. I also didn't have the measurement tools at my disposal to provide analysis in many cases.

Jump forward two decades and the tools for marketing measurement are plentiful, but the challenges for measurement have also increased exponentially. In many cases, however, it is not so much the ability to measure as it is that most bankers are not speaking the same language that the CEO and CFO want to hear.

At a time when legislation has dramatically impacted the bottom lines of most banks, CEOs and CFOs are interested in metrics that frame marketing investment and results in terms like revenue, profitability and growth. And more often than not, they want results in terms of incremental improvement over business as usual.

Minimizing the Impact of 'Unintended Consequences'

At the BAI Retail Delivery Conference in Boston in November of 2009, the overriding theme from major bank leaders, industry pundits and vendor partners to the financial services industry was the risk of 'unintended consequences' as a result of the yet to be implemented Reg E. There was the belief that, while the government was trying to protect people from excessive fees from overdrafts, there would be many consumers who would be negatively impacted as debit card transactions or ATM withdrawals were rejected. Based on a recent straw poll of many of the bankers I work with across the country, some of the same people the regulation was intended to 'protect' have been negatively impacted the most.

It has been almost 9 months since the implementation of Reg E, and the government has again created legislation that will have unintended consequences for a majority of bank customers. The still debated, but most likely to be implemented, Durbin Amendment to the Dodd-Frank banking bill will significantly lower the interchange income that banks can earn from debit transactions. In fact, many believe the impact could cause a reduction of 60-80% or more to this important non-interest income source.

A Little Note From BankSimple

After hearing about the vision of BankSimple several months ago, I decided to see if the development of another new online bank would be different. To begin with, I accepted their invite to be part of their beta test once the bank officially launched some time in 2011. Yes, I accepted an opportunity to be on a waiting list to potentially open an account.

As a lifelong bank marketer, I also followed the story of the bank's founders and the development BankSimple (The Buck Stops Here). I was intrigued by the fact that BankSimple would not really be a bank at all, but instead, simply provide a better front-end experience with a myriad of banks being used behind the scenes to generate the highest returns (and lowest costs) for their customers.

New Email Marketing Study Highlights Missed Opportunities for Bankers

As social media channels continue to proliferate and traditional communication channels become more expensive, bankers struggle with how to maximize the effectiveness of the email channel within their marketing mix according to a just released study from SubcriberMail, a Harland Clarke company. The study entitled, Email Marketing Within Financial Services Institutions, surveyed 71 banks and 191 credit unions, finding that email marketing among these organizations to be strong and growing.

But, while many organizations are leveraging email to inform and communicate news and product information (50% for both banks and credit unions) and even cross-sell existing customers (56% of credit unions/42% of banks), a far lower percentage of credit unions and banks use email as part of a multi-channel onboarding and/or activation process (26% and 27% respectively) or use email for delivery of an electronic receipt.

Ten Bank Marketer Resolutions for 2011

It is the dawning of a new year in banking with many of the same challenges that we saw in 2010. Our industry continues to be viewed in a less than positive light from both the consumer and small business marketplace. 

The need for new customer growth and share of wallet expansion underpins the need for new sources of non-interest fee income at a time when regulations are dramatically reducing many traditional sources of revenue. In addition, the expansion of transaction and communication channels are changing the ways we interact with customers. 

These challenges are combined with an historically low interest rate environment and a credit environment where there is a massive amount of money to lend at a time when borrowing is more difficult and less desirable for many.

According to a national survey, the majority of personal resolutions in 2011 will revolve around saving money, losing weight, changing a bad habit and being closer to loved ones. Achieving any of these goals will take commitment, focus and changes in behavior. The same can be said for the resolutions I have developed from traveling the country over the past few months and being involved in a number of banks' annual planning efforts.

Here are areas where bank marketers believe they should focus in 2011: