2012: a bank customer outlook

Some folks asked me to add a fourth outlook to my 2012 series regarding what customer focused trends would be occuring in 2012.

Now I'm a fintech guy with a strong marketing background, and was going to write a long analysis of customer outreach - or is that outrage? - strategies for banks in 2012, but someone has already done it.

My good friend Jim Marous who writes the Bank Marketing Strategy blog.  It's US-centric, but the content applies pretty much globally went it come to customer reach. So here are ten things that bank marketers should be doing in 2012 to engage customers:

1. Validate The Value of Marketing Through Measurement

 As highlighted in my recent post 100 Years Later, Marketers Still Have Difficulty Measuring Up, there is still a tremendous gap between what bank marketers implement and what is measured. Not only are there almost 20% of marketers who don't find measurement of results imperative according to recent research by Ifbyphone, but less that 50% of any channel is measured. 

Dan Marks from First Tennessee says, "Bank marketers should resolve to measure and optimize true marketing ROI – having the courage to seek out the unproductive part of the marketing mix and replace it with other activities that generate real shareholder returns." 

Serge Milman, CEO of Optirate states, "In 2012, bank marketers should resolve to have a more diligent focus placed on business drivers that can help manage and grow the bank," while Bradley Leimer, vice president of online/mobile strategy at Mechanics Bank said that,  "The number one resolution for bank marketers in 2012 must be to 'put data first,' since the proof of any program resides in the measurement of results." 

Jeffry Pilcher from The Financial Brand added a common sense resolution that is not always followed . . . "stop doing things that don't work." It is clear that if only one resolution can be accomplished in 2012, the measurement of attribution and program results is the most important.

2. Don't Confuse Channel Economy with Channel Effectiveness

One of my resolutions from last year that needs reinforcement is that bank marketers should leverage the measurement mentioned above to ensure that the right channel (and mix of channels) are used for the right customers.

While social and digital media seems less expensive, it doesn't work as well on its own as it does when mixed with traditional channels.

In fact, recent research discussed on this blog has shown that for financial services, many of the traditional channels are more desired and effective than new media.

In addition, many bank customers are not reached at all with phone, email or social media programs. As mentioned above, 2012 should be the year of improved measurement and improved attribution analysis, which will help to answer the questions around which channels should be used.

3. Be Customer-Centric

Ron Shevlin, senior analyst from Aite Group and author of the book and blog Snarketing 2.0 stated in a recent post, “banks need to be perceived as doing what’s right for their customers and not just their own bottom line.”

One of the banks I work with stated it best when they said that customer centricity means:

• Know who the customer is and what they want
• Look out for the customer and help them make the right decisions
• Reward the customer for their patronage with tangible and intangible benefits

Saying you're customer-centric is not enough, though. "When claiming your bank is customer-centric, actions speak louder than words," warned Elizabeth Lumley, special projects editor at Finextra.

This was especially evident in 2011, when many large banks made fee changes that created an uproar in social media, resulting in reversals of those decisions.

To this new phenomenon, Chris Skinner, author of the Financial Services Club Blog suggested, "Bank marketers should resolve to make 2012 the year where good communication and real transparency ensures that we don't get screwed by social media campaigns."

4. Build a Social Media Strategy That Complements Your Overall Marketing Plan

Instead of engaging in social media because other industries are doing so, it is time to treat social media like other channels, with defined goals, strategies and expected ROI outcomes.

While simply having a Facebook page or Twitter account may have been sufficient in the past, customers are expected to utilize these channels to connect with their bank even more in 2012," says Karen Licker, financial consultant and social banker (independent) for J.D. Power and Associates.

"Given the public nature of these contacts, bank marketers should have a resolution to be aware of these conversations and direct customer outreach, and be equipped to respond quickly to questions or issues raided via these channels." 

Nicole Sturgill, research director for delivery channels at TowerGroup, suggested that bank marketers should resolve to engaging the front line in social media since many don't realize they are being talked about. 

Alex Bray, managing consultant at IBM recommended, "Bank marketers should create a clear vision for social media based on a genuine customer value proposition while killing vanity projects that don't add value." 

Added John Owens "In 2012, bankers will need to understand the role and importance of social media to better serve clients and receive feedback."

5. Leverage Big Data for Better Conversations

There is a lot of discussion in the marketplace about the use of 'big data' to transform customer communication and the customer experience.

There are very few places where more customer insight is available than in the financial services industry, where we not only have access to demographic and financial service ownership data, but also transactional insight that gives us a view into financial and purchase behaviors.

But big data is nothing new, and should not be overwhelming in an environment where the ability to process data has also grown exponentially.

Unfortunately, as was found by Ron Shevlin from Aite Group earlier this year and in a soon to be published report, bank marketers are still not very comfortable with communicating online or through mobile channels using available insights.

This may require new talents and new teams according to Brett King, founder of Movenbank, and author of the best-selling book and blog Bank 2.0. 

"In 2012, bank marketers should have a resolution to build a team that can create compelling customer journeys in real-time," states King. "Marketing is no longer about 'pushing' messages," continues King. 

Fred Hagerman, CMO of Firstmark Credit Union adds, "Bank marketers should have a resolution to combine web analytics and database knowledge to drive even more relevant communication."

6. Build Customer Value From Day 1

While there has been a great deal of discussion around the cost of a checking account since the December 9 American Banker article on the subject, there is no disputing the fact that fees alone can't make a relationship profitable.

As a result, it is imperative that bank marketers look at customers as valuable assets to the bank that need to be nurtured and grown through increased engagement, relationship expansion and retention.

As stated by Matthew Wilcox from Zions Bank, "2012 is a year when all bank marketers should resolve to have multichannel new customeronboarding programs as well as highly targeted relationship growth initiatives.

To not have these programs in place would leave valuable money on the table and risk losing potentially valuable relationships."

7. Build Bank Value Daily

The past few years have been difficult for our industry, with the faith and confidence in many leading financial organizations being shaken. 

In 2012, consumers will look for solid value in products and services with every purchase and decision they make.

Those organizations that don't reinforce the value they provide - every day - will be challenged. 

Dan Marks said that bank marketers should resolve to "refine, renew, and reinforce the bank's key brand distinction across the entire enterprise – everyone should know and exhibit how the bank uniquely serves customers’ needs." 

Steve Cocheo from the ABA Banking Journal suggested a rather straight forward resolution, "Bank marketers need to accentuate trust and value in the communications they develop and strategies they build."

Bank consultant, Lori Philo-Cook seconded this resolution when she recommended, "Bank marketers should resolve to find new ways to communicate with customers in order to rebuild trust and strengthen relationships." 

8. Innovate

Plain and simple, 2012 is a year where bank marketers should try new things and support innovation done in other areas of the bank. 

Bryan Clagett, CMO and investor at software services provider Geezeo put it best with his recommended resolution, "Bank marketers should not be afraid to experiment and think outside the box in 2012."

For those organizations where budget, philosophy or other variables may make true innovation challenging, payments pro Scott Loftesness provides a suggestion, "Bank marketers should prepare to be a fast follower, especially in mobile for 2012, unless they have the budget to be an innovator."

9. Focus on Personal and Professional Development

While the skills needed to do effective bank marketing remain pretty much the same (targeting, messaging, measuring, etc.), the channels available have definitely increased.

Therefore, bank marketers can no longer rest on their laurels and hope to succeed in the new marketing environment.

More than ever, there needs to be a dedication to becoming familiar with the changes in the marketplace from a product and channel perspective.

As stated by bank consultant Jeff Marsico, "The goal for bank marketers is to earn a place at their bank's strategic planning table and to be more than just an ad budget."

Being aware of the changes in the marketplace can help earn this respect.

For me, I find that following industry leaders on Twitter and subscribing to industry blogs (like mine) are a great way to keep up to speed.

Throughout this post, I have provided links to some of the industry pundits who share valuable insights and research on Twitter.

Following them will go a long way towards keeping you in the loop. Watching who they follow will further expand your depth and breadth of knowledge. 

Bob Williams from Harland Clarke put it well in his suggested resolution, "Bank marketers should resolve to listen, discuss, think, read, and write. In short, they should be part of the conversation."

Community banker David Gerbino provided a more basic, yet important resolution that, "Bank marketers need to resolve that they will understand finance, financial reports, and know how to calculate product profitability."

10. Don't Be Afraid to Break From The Herd

The banking industry is notorious for having a 'herd mentality', following each other's lead as opposed to thinking independently. In the past, the logic for doing this was usually based around risk aversion.

Today, following other bank's can be both risky and can inhibit value creative. Look at the events around the raising of debit card fees by Bank of America, where many large banks followed the strategy of Bank of America only to have to follow the bank again as they rescinded the fee.

The same can be said for the jumping into the social media waters without a defined strategy. While almost all banks are doing something in social media, very few can define the value it is bringing to their bank or what the ROI on this investment is.

2012 should be the year of breakout opportunity for those bank marketers who want to embrace the challenges associated with change. It is definitely not 'banking as usual', but is the environment where market leadership is gained and disruption creates new business models and customer segments.

This is one of four 2012 outlook pieces.   The others are:

• 2012: an economic outlook
• 2012: a banking outlook
• 2012: a bank technology outlook