Marketing has always been an afterthought in banking. For many years, marketing wasn’t even necessary. Bank regulators quelled competition by controlling everything — entrants, operations, expansion, products and even rate. Accounting, mortgage and retail executives were the kingpins who ran the show.
In the 1970s, institutions started creating more senior-level marketing positions, but often in name only. Community relations managers were given new titles like “Marketing Director,” but their role — placing ads, administering donations and managing premiums — didn’t really change.
Those days are gone. Competition is fierce. With virtual banks and digital disruptors threatening established players, the marketplace is white hot. Now’s the time for marketers to come out from the shadows and take a more prominent leadership role.
This is the Golden Age of bank marketing. Exciting challenges and new opportunities abound. No longer are we simply telling consumers what products we have available; consumers are telling us what they expect — speed, convenience, and all of it for free. If we don’t provide the right products, at the right time and price, they’ll go elsewhere. Listening and responding is the essence of marketing. And no one in the organization is better suited to this role than marketing execs. In an environment where consumers are king and competition is intense, marketing should be providing the data and the strategy to guide corporate decision-making.
Retail marketing departments outside of banking bear little resemblance to those of earlier eras. Content officers, digital analysts, social media engineers and engagement officers are among the trendy new titles that give testament to the importance of digital marketing, but they also connote the expanded functions of today’s bank marketing department. A Chief Marketing Officer should be the bank’s primary customer advocate, a champion for change and a guide to help achieve greater profitability. Meaningful insight into the market and the consumer buying path is a critical role for today’s CMO. Similarly, digital analysts should be doing more than just tracking email open rates; they should be providing critical customer behavioral data that value throughout the bank, and it’s the CMO’s job to make sure this is happening.
If your marketing department has a digital specialist for placing ads and blog posts, that’s not enough. You’ve simply added a digital operative to a traditional department. You are failing to recognize that digital is more than media — it’s a service delivery system that crosses all channels, strengthening relationships and improving satisfaction. Marketing departments must be restructured to reflect the role digital plays in every aspect of banking.
A McKinsey 2013 DataMatics survey underscores the role of contemporary marketing in corporate profitability. Companies that use customer analytics extensively are more than twice as likely to generate above-average profits as those that don’t. They also outperform their peers across the entire customer lifecycle, are 9x more likely to enjoy superior customer loyalty, and a remarkable 23x more likely to outperform less analytical peers on new-customer acquisition.
CMOs should be measuring channel efficiency, product profitability and customer lifetime potential. They should have the customer base segmented into socioeconomic groups, a strategy for acquiring the more profitable ones and a product wish list to fulfill their needs. Bottom line is, today’s CMOs should have the ROI on every dollar spent and every customer acquired.
Where Marketing was once a distinct, siloed group, now it must be integrated with departments throughout the bank. Every customer interaction has a marketing component. From acquisition to onboarding, product delivery to issue resolution, marketing plays a role. Not just data analysis, either. At each customer touch point, we should be asking if the messaging is consistent. Does our electronic banking technology and service personnel fulfill the mission and the promise we make – implicitly or explicitly — to customers? What information can we give the frontline retail team or loan officers to help them do their job better?
With expanded responsibilities comes increased accountability. No longer is it acceptable to admit that half of all advertising expenditures are wasted and we just don’t know which half. Digitized media and consumer transactions give a full picture of efficiency and profitability. When data isn’t available, research can fill the gap.
CMOs should offer insights into customer behavior, identify market trends and recommend changes. Perhaps, more importantly, the CMO then needs to motivate and help drive the required changes through the organization.
Kevin's innovative marketing programs have been covered by The Wall Street Journal, The New York Times, USA Today, NBC Nightly News and Asia Today. He has won nine Golden Trumpets from the Publicity Club of Chicago, four Eagle Awards from the Chicago Financial Advertisers, and highest honors from the U.S. Department of the Treasury.
Switch to Community is looking for columnists to contribute to the opinion section of our website. Interested?