The economy seems to be recovering from more than a year of pandemic and stay-at-home orders It’s time for community banks to evaluate their marketing efforts in a new light. Interest rate margins are still slim enough to fit into skinny jeans, and that situation won’t reverse overnight. However, there is a risk that banks will have to cut expenses so steeply that they end up missing out on the very consumers they need for healthy, sustainable growth. By reducing marketing efforts, banks reduce their visibility to consumers. By focusing heavily on borrowers, they risk alienating the type of account holders who are likely to open a deposit account first and then pursue a lending relationship soon after.
Not All Deposits are Created Equal
Deposits shouldn’t be a dirty word. Especially if you understand that certain checking accounts can generate more loan dollars than they do deposit dollars. The idea of spending your slender marketing budget on deposits that you don’t want might sound crazy, but that’s where you can take advantage of the current mood—“no more deposits”—and zig when others zag. For example, here’s some Kasasa Analytics data we’ve seen from our own clients who marketed our reward checking:
- Reward checking account holders are more than 1.5 times more likely to adopt a loan in their first year.
- They also bring in 68 percent more loans. In some cases, they bring in $2 in loans for every $1 in deposits.
And advertising a reward checking account is a proven way to get consumers’ attention and persuade them to establish a relationship with your bank.
Now is the Perfect Time to Ramp Up Your Marketing
In general, it’s a good idea to keep your marketing active, even during uncertain times. Putting it on hold could cause you to lose the momentum and awareness you’ve spent valuable time and dollars creating. So far in 2021, the average digital media consumption for U.S. adults is 7 hours and 57 minutes per day. That translates into a lot of advertising inventory and opportunities to reach consumers where they are. Add to the mix that consumers are actively switching bank accounts and the need to stay top-of-mind is greater than ever:
- 25 percent of checking account holders switched banks during the pandemic. [Kasasa Analytics]
- 51.7 percent are somewhat/very likely to switch to a bank that better met their priorities. [Ascent Research]
The Rest of the Year’s Marketing Space will be More Competitive Than Ever
According to a Harris Poll on behalf of Ad Age (February 23–25, 2021), nearly two-thirds (or 65 percent) of Chief Marketing Officer Council members expect to increase marketing spending in 2021 and make up for lost sales in 2020, which means that there is a first-mover advantage. The pandemic caused many businesses to pull back and increased digital media consumption, freeing up inventory and creating a more equal playing field for community financial institutions to compete with the megabanks. Now the most growth-minded businesses are expanding their marketing efforts.
In order to make the most of this opportunity, it’s a good idea to engage in programmatic advertising. Programmatic advertising is a method of automatically buying and optimizing digital campaigns in real time, as opposed to the conventional method of buying directly from publishers and suppliers. This approach allows marketers to target their audience efficiently and precisely, resulting in higher-quality audiences. The combination of technology and better ad buying brings cost benefits and improved scale to small businesses, such as community banks.
Break Through this Year’s Ad Noise
Target the right audience. Getting more account holders is good. Getting more engaged account holders who will generate stable income for your institution for years to come is better—especially when they can bring in $2 in loans for every $1 in deposits. Consumer segmentation can help you identify and target the people you’d most like to attract. For example, when designing campaigns for our clients, Kasasa targets account-holder profiles based on interest and behavioral attributes from consumer studies to target the right consumers, who are also the most likely to convert.
Fine-tune your channel mix. Multi-channel, seasonally tailored marketing performs 58 percent better than digital-only campaigns for the financial services industry. To market successfully, you must be on the right channels for your goals and desired audience. Digital display, streaming audio, social media and email are all effective digital channels that meet consumers where they spend the bulk of their time: online. Direct mail, physical collateral sent directly to consumers’ mailboxes is one of the longest-standing and most reliable forms of marketing, especially when generating brand awareness. Paid search can help you capitalize on the search traffic created by these digital channels or direct mail by making sure your institution appears at the top of Google search pages for terms like “reward checking account.”
Use relatable creative. Incorporating the seasons into your ads offers a great opportunity to create an emotional connection with consumers. Make sure you tailor the imagery and messaging in your collateral to match the specific season. Below are some examples of collateral for spring, end of summer/back to school, Halloween, Thanksgiving, winter holidays and New Year’s:
Futureproof Your Bank by Investing in Your Seasonal Marketing Now
2021 is shaping up to be a pivotal time for many banks. Will you be able to attract the right consumers—and more of them? Consumers who will generate more loan volume and non-interest income for your institution and offset margin compression to set you up for future success? And those ad spaces are being taken up fast. So if you’re executing a seasonal campaign, it’s a smart idea to start planning it sooner rather than later.