Fremont, Ohio Bank Marketer Demonstrates Commitment to the Community

Last month, I read an article about a bank marketer taking big steps to demonstrate a commitment to the bank’s community.  Rather than simply talking about the bank’s commitment to the local small businesses and the community in advertisements and traditional marketing efforts, Michelle McGovern, Marketing Director at Fremont, OH based Croghan Colonial Bank, put a message about community support into action. 

In an effort to help local businesses market themselves more effectively, Michelle made a choice to reallocate marketing dollars from advertising to a fund that would send a group of small business owners to a marketing bootcamp.  After reading about Crogahan Colonial Bank’s efforts, I reached out to Michelle to learn more about why this is important, how she got involved, and what the bank hopes to see from this investment as a result.  Read my questions and her responses below:

Background about the campaign

It really was a EUREEKA moment where a lot of little things came together at once.

For two years, the Downtown Fremont Executive Director, Angie Morelock, tried to get a grant to send small business owners to Jon Schallert’s Community Reinvention Program. The program shows small business owners how to apply some serious marketing savvy so they can stand out in their marketplace. It allows at least 6 geographically linked business owners to travel to Colorado for an intense 20-hour training workshop, ongoing consulting support, an onsite visit and a follow-up community workshop.

I initially got involved because our headquarters is located in downtown Fremont. We can see firsthand how the economy is affecting the businesses just by being aware of what’s going on around us. Several of my coworkers are on the Downtown Fremont promotions committee and I worked with Angie on the most recent grant request to get the funds for the program. I’ve even done small workshops myself to help the business owners market themselves more effectively and was always in support of Angie’s efforts to send the businesses to Jon Schallert’s program. Since the community was insulated a bit from the economic downturn, its effects weren’t really apparent until early 2009. That’s when the sense of urgency for the program kicked in for everyone involved.

When I learned that Angie’s most recent grant request was turned down in favor of more socially relevant causes, I knew the bank had to step in. I was in the middle of business planning, trying to figure out how to re-engage a public who had really grown weary of the financial industry over the past 18 months. The marketplace was full of competitor “We’re Strong and Stable” bank ads accompanying unnaturally high CD rate promotions to drive in some much needed liquidity. In the aftermath of the financial crisis and in light of the competitive environment, we hadn’t used our 2009 advertising budget much in favor of more grassroots efforts. In short, we knew the small business effort was the right thing to do and we jumped on it. With some quick reallocation, we were able to create the “Croghan Colonial Bank Small Business Reinvention Scholarship” to provide the funds Angie was hoping for with the grant request.

What kind of investment was required?

It costs $11,563 to run one ad in all our market papers telling people how much we build our local communities. It costs $10,500 to send 6 businesses through Jon’s Community Reinvention Program. [NOTE: Initially, we were going to send 6 business owners and the Downtown Fremont Executive Director. When we received 7 applications from business owners, we decided to send all 7. So, our total investment was $12,000.] From my perspective, there is no better way to grow our business than to help others grow theirs.

The justification here was simple: do we run an ad saying that we build a community or do we actually build one? Realistically, we could say anything we want about who we are in our advertising…and it may mean a little. But our taking action in this case speaks volumes about who we are without having to run a single ad or say a single word. It’s experiential and infinitely more credible. Ultimately, the choice was clear.

What do you hope to see as results of this effort?

• More profitable downtown businesses with increased cash flows.
• Sustained growth in the downtown retail district (of which we are a part).
• Increased media exposure that we didn’t have to pay for.
• Stronger public and shareholder perception.
• Sustained increased deposit base within the downtown business district (already increased by 17%)
• Viable campaign we can use to impact other communities we serve.

Did you experience resistance internally to the idea? 

At this point, no. However, I started building grassroots programs with the bank over 6 years ago. We started small; hosting a chicken barbeque for a local charity so they could raise their own money instead of us giving them a $50 donation, for example. Or arranging to give the local food pantry a sack of groceries for every sack the football team got at home games. We gradually developed the grassroots marketing efforts to the point that senior management unflinchingly supported this outreach.

Why do you favor non-traditional efforts like this over traditional marketing like advertising?

With traditional advertising, it’s you alone trying to convince a free marketplace to do business with you. You have to battle natural skepticism, the competitive climate, timing, relevance, and the personal mindset of your target market. Most recently, my company has also had to battle with the negative perception of the entire financial industry. It’s daunting at best; expensive and ineffective at worst.

Non-traditional or grassroots marketing allows you to invite consumers and influencers in your key markets to care so much about what you’re doing that they become your most vocal supporters. Suddenly, you have a credible, voluntary sales force that is carrying your message forward with more velocity than a single marketing department could manage. By being a valuable resource and helping tie our business objectives to the community’s needs, we create a win for everyone. Ultimately, this leads to loyal consumers, enhanced reputation, strengthened awareness and increased sales.

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In today’s competitive environment, where we see the same messages promoted by so many financial institutions (many of which aren’t supported), it’s refreshing and encouraging to see the steps that Michelle and her team at Croghan Colonial Bank are taking to demonstrate a commitment to the Fremont community.  In my mind, the biggest takeaway here for financial services marketers is the question Michelle posed to justify the spend on the initiative:

“The justification here was simple: do we run an ad saying that we build a community or do we actually build one?”

This is a great example of moving beyond simply telling people about an institution through advertising – instead, they’re demonstrating the bank’s unique value added and difference from other institutions.  It’s just like the saying: “actions speak louder than words.”  As a result, Croghan Colonial Bank is likely to achieve its goals – which would prove difficult, if not impossible if the bank had chosen to run an advertisement instead. 

Thanks Michelle and Croghan Colonial Bank, we’ll look forward to following the progress of this effort.

How many financial institutions will abandon Facebook and Twitter in 2010?

Remember all the buzz about MySpace? 

Since sometime in 2007, when MySpace was on the minds of so many marketers, the popularity of MySpace among financial institutions has obviously gone downhill.  Some marketers have migrated to Facebook and/or Twitter, and some seem to have abandoned social media all together.  While the conversation about social media continues to be a hot topic, I haven’t heard about any financial institutions that have recently launched, or are planning to launch a MySpace page.  The conversations about MySpace aren’t happening anymore (if they are, let me know).

It raises the question:  What happened to financial institutions using MySpace?

Searching MySpace for ‘bank’ or ‘community bank’ doesn’t return many/any relevant results.  In searching for ‘credit union’, however, MySpace returns 151 results – many of which appear to be actual credit union or credit union related MySpace pages. 

One of MySpace’s most interesting features is the ability to see when a person/company last logged-in to their account.  While the search for credit unions returned quite a few existing credit union pages, many are no longer active – it seems that many have simply been abandoned.  A few examples:  

• Amplify Credit Union is no longer updating its MySpace page, it instead directs visitors to check visit the CU on Facebook and Twitter.  Last login: 8/3/2009
• Mohave Community Credit Union hasn’t logged-in since 12/16/2008
• Secure First Credit Union hasn’t logged-in since 6/26/2007

While there are some credit unions that appear to be actively using (or at least checking) their MySpace pages (like Lancaster Red Rose CU, Meadville Area FCU, and Cal State LA FCU), most institutions appear to have gained little traction with their pages.  This is reflected in the few posts and friends, and time since last logging in.  And instead of deleting their accounts, many have opted to simply walk away – leaving behind evidence that suggests a failed effort.

If you have an inactive MySpace page, it’s time to take it down.  It reflects poorly on your brand to have an outdated and inactive MySpace page.  Social media is meant to be a two-way conversation; if you’re not contributing the the conversation through the site, there’s really no point in keeping the page alive.  Until you take it down, it will continue to show up in search results, people will continue to visit the site, and it will continue to shape peoples’ perceptions about your institution. 

I’m sure there are a number of reasons why the pages were abandoned.  Among these, I would expect:

• There were no goals established before launching the page. You can only walk aimlessly for so long.
• People simply hopped on the MySpace bandwagon.  When the excitement died, so did the effort.
• Social media efforts take more time and resources than expected.  They aren’t ‘free’, and at some point (likely around that last log-in date) someone probably wanted to see evidence of a return on the invested resources.
• The person responsible for the site no longer works for the institution, and didn’t bother to remind their colleagues about the site.
• Facebook and Twitter are ‘cooler’ than MySpace.  Some of these institutions have probably reallocated their social media resources to these two platforms – which brings us to an important question:

How many financial institutions will abandon their Facebook pages and Twitter accounts in 2010?

For the same reasons outlined above with MySpace, I’d expect that we’ll see quite a few financial institutions abandon their Facebook pages and Twitter accounts in 2010.  While many institutions are using these two platforms in clever and effective ways, others are not – they’re not gaining the kind of traction necessary to generate results.  In fact, I wouldn’t be surprised to learn that some institutions’ social media efforts were canned at the end of 2009 after not showing any return on investment. 

It will be interesting to look back on the year and see if there’s any evidence of this.  I wonder if any industry trend analysts are tracking the number of shuttered Facebook and Twitter accounts alongside those that are launched.

To those institutions still thinking about entering the social media arena, learn why you don’t need to be on Facebook, and you don’t need a Twitter account.

What if financial institutions tapped the power of Groupon?

Groupon has received quite a bit of attention in recent months.  And over the holidays, as the company was featured in numerous news broadcasts, I started thinking about if and how financial institutions could tap the power of Groupon.

Groupon, for those that aren’t familiar with the concept, is a company that is built around ’collective buying power.’  Basically, companies looking to offer a deal of some sort sign up with Groupon to sell a block of coupons or discounts to a group of people.  The company sets a threshold for the number of coupons/discounts that must be sold, and once that threshold is met, the group of people who purchased it is awarded the ‘Groupon’.  If the threshold isn’t met, the deal doesn’t become a real offer.  And, Groupons are location specific – giving people access to deals with local businesses.

As of today, over 1.2 million Groupons have been sold to save customers $62 million.

You can see how Groupon works on the business side here

Info about the consumer side of Groupon can be found here

Not surprisingly, restaurants and bars seem to be the businesses that are seeing the most success with Groupon.  At the same time, other service businesses like chiropractors, hair stylists, and auto mechanics are finding success with Groupon as well.  So what would it look like if financial institutions tapped the power of Groupon? Here’s a few of my ideas:

• Instead of offering a $50 bonus to any new customer for opening up a checking account, offer a Groupon for $10 (or some small, reasonable amount) that can be exchanged by the consumer for a checking account with an initial $100 deposit from the financial institution.
• Offer a Groupon for an attractive CD rate.  Consumers would purchase the Groupon that outlines the requirements (ie. minimum/maximum dollar amount, terms, rates, etc.) for a worthwhile price.  The financial institution would then ensure that the higher rates could be justified with the guarantee of a certain number of people opening those accounts.  (on a side note, what if Groupon had a sliding scale – letting institutions offer better and better rates as more people signed up for the offer?)
• Partner with a local business.  Instead of offering a financial product or service Groupon, imagine if the financial institution sponsored another local business’ Groupon, where  the consumer would have to visit the sponsoring institution’s branch to have the Groupon stamped by an employee before it’s valid.  If the deal is too good to pass up, consumers will jump through the hoops to get the deals. 

There’s a number of ways financial institutions could tap the power of Groupon; these are only a few.  Now, the important question:  Why would a financial institution want to use Groupon?  Here’s a few reasons that come to mind:

• It guarantees that a certain number of people will participate in the offer.  Do the math, figure out what the threshold needs to be, and it’s a win-win.
• People pay for the offer up front.  In my mind, this would suggest that they’re more invested than a random person who recieves a direct mail piece that contains a similar offer.  Perhaps this would lead to a greater likleyhood of retention.
• Buzz: people who purchase the Groupon want to be awarded the deal – so they’ll tell their friends about it.  This makes it more likely that you’ll sell more, but it also gets your name out there.
• You’ll likely reach people through Groupon that you wouldn’t reach through traditional marketing efforts
• Chances are, financial institutions aren’t using Groupon in your markets.  This may be an opportunity to offer something in a different way than your competition.
• Groupon describes its users as: savvy, young, hip, active, college-educated, social media users.  This represents an attractive target for many community banks and credit unions.

As Groupon continues to gain traction, it will be interesting to see if/when financial institutions find a way to leverage the idea to their advantage. 

Note: I do not have any affiliation with Groupon, and neither does Market Insights.  And I’m not sure if Groupon allows financial institutions to participate – this post is simply something to think about and prompt conversation.

Banking in 2010: Tiny Cameras, Video Conferences & Retinal Scans

2010 is here.  As many of us are thinking about the year ahead, some are looking further ahead (see Denise Wymore’s ‘Ask the Experts’ series of interviews about what marketing will look like in 2020 here, here, and here).  As we think about what will happen in banking 10 years from now, I wanted to share this piece about banking in 2010 that ran 10 years ago in Bank Marketing magazine:

A local retailer has completed her business for the day. Instead of physically driving to her bank to make a deposit, she accesses her account by computer, through which a tiny camera verifies her identity by retinal scan. She calls up her account information via the Internet and arranges to transfer cash from her customers’ accounts into her own. While at the bank’s Web site, she notices that the institution is conducting a retirement planning seminar that interests her. She sends the bank a confirmation of her attendance by video conference.

Science fiction straight out of Star Trek? Not really. This could be a bank customer’s daily routine in the year 2010.

How do today’s banking practices need to change to meet customer needs in the next century?…

Some aspects of this ’sneak peak’ have become reality: accessing accounts by computer, making deposits without visiting a physical branch, transferring money between accounts, and learning about seminars from an institution’s website.  These have in fact become part of many daily routines.

At the same time, some of this is not part of today’s reality: most institutions are not verifying identities using retinal scans (are any?) and most of us aren’t video conferencing with our financial institutions (but there may be reason to do so). 

As we begin 2010, it’s interesting to look back on the changes that have happened in the last 10 years…or even over the course of the last year alone.  And it’s encouraging to see that some people are looking pretty far into the future.  Hopefully that will prompt the kind of innovation we need to make 2010 a great year. 

Happy New Year!

The Alternative to Doing Nothing: Bucks First FCU’s Project Flipside

We’ve heard quite a few stories this year about institutions opening branches in local high schools as means to better serve and attract younger consumers.  When I read an article about Bucks First Federal Credit Union’s ($88 mil. / Bristol, PA) Palisades High School branch in Kintnersville, PA opening last week, I didn’t think much of it.  But I was intrigued by the photo of the branch included in the article – namely, the paint splatter behind the teller line.  A quick search revealed that Bucks First FCU has an extensive Generation Y initiative despite the fact that it only has two branch locations (other than the high school branch).

The initiative is called Project: Flipside, with the tagline “the alternative to doing nothing”.  There’s a great corresponding website: www.projectflipside.com complete with a blog, contests, events, financial education (cleverly positioned as ‘the alternative’), and a savings/checking account appropriately named the flipside account.

The website is simple and straightforward, and a welcome relief from the flashy and often times overwhelming websites that we’ve become used to seeing in efforts to target Gen Y.  This site comes across as authentic – written by people who are somewhere between 16-25 for their peers in the same age group. 

While there are some similar elements to this campaign as we’ve seen with others (i.e.  a branded car that visits sponsored events, a contest to select representatives of the campaign/spokespeople, and Facebook/MySpace/Flickr links), there are some interesting and different points about this effort worth noting:

• There are three representatives for Project Flipside – known as the ‘crew’
• The blog posts aren’t limited to financial advice, tips or product related information.  This blog includes a variety of topics from funny random videos to some that hint at financial related material.
• The site has an easy contest for a $25 gift card: simply submit your name and email

Perhaps the most interesting aspect of Project Flipside is the ‘Flip your Fees’ classes that are offered to customers where any overdraft fees during the course of a month can be reversed simply by attending a class offered by the Credit Union.  It’s a great idea: there’s incentive for customers to attend the courses (to reverse overdrafts), and the information will likely stick with them as a result.  People can even sign up for classes online (although the class schedule needs to be updated).

The tagline for the initiative is also really well done: “the alternative to doing nothing.”  Many of today’s younger consumers need to be proactive if they’re going to learn about personal finance.  While some do nothing, this tagline speaks to those willing to be proactive in their learning.

While I would like to see some aspects of the site updated – namely, the ‘flip your fees’ class schedule – and I’d like to see more events and blog comments,  overall, this initiative appears to be pretty strong.  The Generation Y ‘crew’, the website, the high school branch, the social media elements, the events, the contests, etc. all seem to be cohesive and integrated.  At the same time, none of these comes across as overly cheesy – something we’ve seen when institutions try too hard to be ‘cool’.

My biggest question here would be relative to the market selected for the high school branch - Palisades High School in Kintnersville is 40 miles from the nearest Bucks First branch and 70 miles from the main office.

Finding Opportunity in Jettisoned Branches

In a recent article, The Atlanta Journal-Constitution highlighted an aspect of failed bank acquisitions that isn’t usually given much attention: acquiring institutions closing one or more of the branches that were acquired from the failed institution.

As the article points out:

Most branches have remained open as they provide the acquiring bank with access to new markets. But a growing number of branches have closed down or been absorbed into a buyer’s existing banking network.

Most decisions to close branches have been made because of location: The newly acquired branches are too close to a buyer’s existing branches.

We often hear that ‘nothing will change’ and it will be ‘business as usual’ when we read about an institution acquiring a failed institution.  But, it’s easy to see why decisions to consolidate or close branches could be made due to proximity to existing branches in the network. 

At the same time, it seems that these situations should hold opportunity for other local institutions to tap into customers’ frustrations about the bank failure, the acquisition, and the subsequent closure of the branch or branches  - or, to expand their own branch network through the acquisition of the jettisoned branch or branches.

I’d like to see data about the attrition rates of failed bank customers (I’d expect the rates to be higher than in an acquisition under ’normal’ circumstances), how many of these branches are jettisoned after acquisition nationally, and whether the failed bank customers would be more likely to continue banking with the acquiring bank after their branch closure - or perhaps switch to the institution that moves into that branch location.

You don’t need to be on Facebook, and you don’t need a Twitter account

While I can appreciate the enthusiasm that usually comes with the conversation, I can’t help but cringe when I hear community bank and credit union marketers tell us that they’re working on developing a Facebook page or Twitter account. 

Sure, we’ve seen examples of how these kinds of initiatives have helped some institutions connect with members of their communities.  But too often, there’s no strategy driving the decision to use these two platforms; the marketers responsible for managing these social media tools do not fully understand how to leverage them as effective marketing tools; and while these efforts are viewed as free or cheap, they often consume more resources than expected – ultimately diminishing the effectiveness of other marketing efforts.

Today, Ad Age published the article: The TGIF ‘Revolution’ is Nothing Without a Marketing Strategy.  Front and center is the main takeaway from the article, one that all marketers considering a Facebook page, Twitter account, or other social media initiative should consider: Social Media isn’t enough to save a weak brand.

While I can easily see some executives and marketers dismissing this statement immediately because they wouldn’t consider their brand to be weak, I think this is a strong statement for those willing to take an honest look at the strength of their brand.   Going one step further – given what we’ve seen from financial institutions using Facebook and Twitter, I’d also make the argument that social media efforts like these can do more damage than good to an institution’s brand.  

Things to consider before starting a Facebook page or a Twitter account:

• Are your social media efforts (Facebook, Twitter, or otherwise) part of an overall marketing strategy?  If not, it’s time to revisit your strategy, or let this be an indication that these efforts may not necessarily be a priority at this time.
• What are your objectives?  This question should be asked first about your broad marketing objectives and second about your social media objectives.
• Who is your audience?  While national statistics and data may tell us that Facebook and Twitter have millions of users, how many will you reach in your communities?  Do your customers/members and/or prospects use these services?  Do they care if you use them?
• Who will manage your social media efforts?  Yes, Facebook and Twitter are free services, but they require significant and ongoing time investment to be effective.
• Are your resources better allocated elsewhere?  As the title of this post suggest, you do not need to be on Facebook, and you don’t need a Twitter account…consider your opportunities, your customers/members, your markets, your goals, your team – these two platforms may make sense, they may not.

There seems to be this view that all community banks and credit unions should be on Facebook and Twitter.  It reminds me of a post I wrote in response to the article “You Should be on YouTube” that was published in ABA Bank Marketing Magazine last year.  As you can tell from reading this post, my view hasn’t changed.

One additional point from Al Ries, author of the Ad Age article, that’s worth repeating here:

If your brands don’t stand for anything, you have to sell your products on ‘price.’ And it’s very difficult to make money by selling your products cheaper than the competition.”

At the end of the day, effective marketing requires that you know your market, understand your opportunities, and position your institution to take advantage of those opportunities – the tough part is determining the best way to do that.

If you’re not using data, you’re in trouble

On Monday, Ad Age published an article with a headline that caught my attention: Wells Fargo Aims to Beat Banking-Biz Woes with Data.  (Reading the headline, I couldn’t help but think about Wells Fargo physically fighting these ‘banking-biz woes’ with data)

The article is an interview with Wells Fargo’s CMO Sylvia Reynolds.  I’m always interested to hear about how companies are using data to support their marketing efforts, and while the discussion about data was only part of the interview, Reynolds did offer some good insights:

Marketers can play a significant, strategic role in times like these by bringing the voice of the customer into the company, making sure that our lines of business and executives have the data they need to understand the customer mind-set so that we can help our customers succeed in this very difficult economic climate. More than ever now, my team is digging deep into market, competitive and customer data to provide that insight. That in turn will help us ensure that we are communicating successfully with our customers about how we can help them in these unprecedented economic times.

We are using these customer insights to inform everything from deciding which products and services we’ll focus on in a given period to where we advertise and the language and images we use. Our previous advertising campaign — “Someday/Today” — was about customers imagining what financial success looked like for them in the future. But people aren’t focused on saving for their dream vacation anymore. So our new “With You When” campaign is much more oriented to how Wells Fargo can help customers manage through whatever life throws their way. The message is still positive, but it’s grounded in the reality of today’s environment.

While Reynolds’ points are pretty straightforward, it reminds us that data is an important element of an effective marketing strategy – especially in today’s dynamic marketplace.  As I read this I couldn’t help but think about companies that aren’t letting data help drive their marketing decisions. If you’re not using data, you’re in trouble.

In my mind, there are some key takeaways for marketers from the points made here:

• We should not only be looking at data, but digging deep into market, competitive and customer data
• We need to listen to our customers – how else are we going to understand their mindset?
• Data should support our decisions relative to products offered and promoted, and the messages we use
• Everything must be grounded in the realities of today’s environment

We all have a general sense of how our markets have changed over the last year, but most of us simply can’t afford to let our instincts guide important marketing decisions.  As data becomes more readily available, marketers should be looking for ways to use it.

Ask the Right Questions

Tom Denari wrote a piece yesterday for Advertising Age offering a small advertising agency’s perspective about the misuse of the word ‘creative’ - especially in its relationship to the way we should engage consumers.

There was one portion of the article in which he offered advice to clients of all ad agencies when they are weighing the merits of an ad agency’s work.  I would hope that all financial services marketers would pay close attention, as these are questions that should be asked about any messaging/marketing effort, whether developed internally or by an outside firm:

…clients need to start asking:

• “Is the message surprising?”
• “Does it play upon consumers’ life experience?”
• “Is it relevant?”
• “Is it consistent with the brand’s voice?”
• “Is it believable?”
• “Does it differentiate the brand?”

Grasping at Straws: The Approach Too Many Follow

Look up the meaning of the term Grasping at Straws, and you’ll find something to this effect:

To guess randomly at or pursue any apparent option, as due to lack of options or information

Unfortunately, this sounds like the approach many community banks and credit unions follow in marketing their institutions.  The approach usually involves a series of unfocused and disonnected tactics that produce little in the way of results.  But there is a better way,  and we can use this statement as a starting point.

First, marketing shouldn’t be a guessing game.  But it can easily become one when there is a lack of information, or when there’s no clear goals in mind.  Marketers should be looking to make decisions based on information about their markets, their customers, their competition, their goals, etc.  All too often, the goal seems to be simply getting the message/promotion out there – not the results that effort generates.

Second, there seems to be a lot of institutions that ‘pursue any apparent option’.  A recent and obvious example that comes to mind here is the influx of financial institutions launching social media initiatives.  And while some are carefully planned strategic initiatives – usually a part of an overall marketing strategy, others are unfocused and disconnected efforts that aren’t likely to impact the bottom line. 

Grasping at straws is an approach that too many follow.  The information to drive smart focused marketing decisions is out there – marketers just need to take the time to research, find relevant information, and use it.