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.

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.

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.

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.

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?”

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.

This is the question that stuck with me from an American Banker article that ran last week called Advertising Themes Shift as Banks’ Image Suffers.  The article starts:

“The advertising battle raging among banks speaks volumes about the mind-set of the industry and its customers.

Some companies have gone back to basics, emphasizing attributes such as dependability as they try to reassure customers in uncertain economic times. Others have taken a bolder (some would call it negative) approach, seeking to paint themselves as different from their troubled rivals.

Which tone is the correct one inspires debate among bankers and ad experts, since results are often hard to quantify for any ad. But most agree on one thing: Banks must devote a good portion of their scarce resources to advertising.”

The last statement raises a couple key questions:  Should banks really devote a good portion of their scarce resources to advertising?  And, what exactly is a good portion of resources? 

Contrary to what the bankers and ad experts have said here, I’d make the argument that banks are already too focused on advertising.    Regardless of what tone an institution uses in its advertisements, advertising alone is not going to change consumers minds about a financial institution or the industry as a whole.

The article continues with a statement from Maggie Kelly, Vice President of Marketing for the ABA’s professional development group:

“It’s more important than ever to have a strong brand today, because you really have to gain your customers’ trust and loyalty.”

She’s right – it is more important than ever to have a strong brand.  But, while strong brands may be supported by advertising, they aren’t created by advertising. 

This reminds me of a blog Post from Ron Shevlin: You Cannot Advertise Your Way To Greatness

It may be easy to shift the theme or message of an advertisement in response to changing market conditions, but reshaping perceptions and building a strong brand requires attention to other aspects of marketing as well.  Consider the Chemical Bank example cited in the article.   While the award winning ‘Save Michigan’ campaign included advertisements, it also included a microsite, free workshops, and relevant products to support it.  And it wasn’t a quick fix – The Financial Brand covered the campaign more than a year ago here, and the bank’s brand building continues with the latest iteration – the ‘Mich Again’ campaign.

With social media gaining traction with financial institutions across the country, it’s no surprise to see social media as one of the hot topics at this year’s ABA Marketing Conference.  In fact, the ABA launched its own social media efforts with a blog and by encouraging attendees to comment about the conference on Twitter using the #abamc tag.    

I attended the social media sessions at the conference and wanted to share some comments, links, and resources here to continue the conversation.

Before the conference, Eric Lucero from Umpqua Bank pointed us to this video called The Social Media Revolution in his comment on the ABA Marketing Conference blog.

The video, which starts with the question “Is social media a fad?”, is full of some impressive stats that would lead most anyone to believe that social media is here to stay.   But this kind of information and buzz has many marketers looking for practical applications of social media they can use at their institutions.  Last week, Mashable published a great article called 5 Ways Banks are Using Social Media.  This is a good place to start.

While some of the examples included in the Mashable article highlight the use of Facebook and Twitter in social media efforts, it’s important to know that social media is much broader than these two platforms.  Many social media efforts don’t involve Facebook or Twitter. 

A good example of a recent social media initiative that was talked about at the conference is Umpqua Bank’s Save Hard Spend Smart initiative.  The microsite allows for the Bank to engage with customers and people in the community, and it does so without relying on Facebook or Twitter.  Read more about the Save Hard Spend Smart initiative here.

During the social media sessions, some great points were made and some great questions were asked.  Here’s some thoughts/ideas/observations I thought were worth sharing:

• An informal survey of the audience during Virginia Miracle’s session found that many bankers view the technology comfort level among management as a big barrier to social media involvement
• Many marketers are still unfamiliar with Facebook and Twitter; many equate social media to these two platforms
• Many marketers are pursuing social media tactics without a strategy; there is no connection between the overall marketing strategy and the various social media tactics (many included Facebook pages and Twitter accounts)
• One of the banks represented at the conference hosts social media seminars for customers and the community, which are lead by a local social media expert.  Attendance to these events are much higher than their other seminars, like mortgages.
• Measurement is often an afterthought, or it’s not considered at all.  This is a problem. 
• Many companies do not have social media guidelines.  Intel was cited a few times as having public social media guidelines; you can see those here
• Bankers are concerned about negative comments and network security
• Content was a big discussion topic – what to post, when to post, how often, who manages it, what about compliance?
• Bryan Simsreminded us all that these initiatives require an on-going investment of time and resources

For more about social media, check out these articles/sites:

• Need help talking to management about social media?  Get on the Right Side of the Fence from Chris Brogan
• Banks and Social Media: Shred Your Marketing Beliefs from the ABA Banking Journal
• Articles about social media from The Financial Brand
• Social Networking is Hot, but it’s Only One Way to Connect with Gen Y from Brass
• Why Banks Won’t Do Social Mediafrom BankerVision

There’s a lot more out there, but these resources are a good place to start.  If you’ve got other links, ideas, or opinions to share, please do so in a comment.

Finally,  it also became apparent that some people in attendance wanted help getting to know more about Facebook and/or Twitter, and wanted help creating their own personal accounts.  Here are a couple resources I found:

• Facebook Tutorial: How to Create a Facebook Profile
• The Ultimate Guide for Everything Twitter 

Earlier this week, BusinessWeek ran an article called The New Bank Branch: Internet Cafes and Rent-a-Rooms, highlighting Umpqua Bank as an institution with some innovative branches – complete with coffee, Internet, and conference rooms that can be rented out by community groups. 

The article includes comments from Bob Meara, senior analyst at Celent:

“the traditional branch, with Greek columns and steel vaults, will give way over time to smaller, sleeker, and more inviting branches intended for less deposit or check-cashing…”

We’ve certainly seen examples of the smaller and more inviting branches, one of which is Umpqua Bank’s neighborhood branch.   But, while we may see more of ’smaller, sleeker, and more inviting branches’, it’s important to recognize that this approach isn’t appropriate for all institutions in all markets. 

This point is illustrated in the cover story from last month’s Bank Technology News - The Future of the Bank Branch.

In this article, Jeffry Pilcher from The Financial Brand makes a great point:

“Everyone in the fnancial industry is looking for a single blueprint, and it doesn’t work; it depends on who you are serving, what products you are offering, where you are located and the competition you face.”

Experimentation with the branch environment is not a new idea.  Examples that come to mind include:  ING Cafes, Umpqua Bank’s Innovation Lab, WaMu’s Occasio branches, Reliant Bank’s branches with Maui Wowi Smoothie Shops, or Union National Community Bank’s Gold Cafes.  

Are these innovative branch concepts really the future of bank branches?

As the BTN article points out: “Washington Mutual’s experiment in futuristic branch design-at a cost of $1 billion- has come to an ignominious end” as Chase converts the Occasio branches to the more traditional branch layout that is part of the Chase brand.   Read more about the WaMu/Chase branch conversion here and here. 

The BTN article also talks about ING’s Cafes, noting that they have ‘no transactional ability whatsoever.’ 

While it works at one location, it simply wouldn’t be practical for Umpqua Bank to implement the Innovation Lab concept at all of its locations.

Reliant Bank probably won’t offer smoothies at all of its locations.

And, Union National Community Bank has already killed the Gold Cafes, converting those branches back to traditional branches.

Looking at these examples can be discouraging for bankers who may be looking for the ’single blueprint’ silver bullet that will create the kind of branch that people want to visit.  In reality, it gets back to knowing your customers, knowing your market, and creating a branch environment that fits with your brand.  For some, that may mean offering coffee.  For others, that may mean traditional teller lines. 

These examples may show us some cool and innovative ideas, but they also tell us that these ideas don’t always work out in the end.

According to the J.D. Power and Associates 2009 Retail Bank Shopping Study results released this week, “when selecting a retail bank, shoppers place the most importance on the bank’s brand image.” 

“The study finds that 36 percent of a shopper’s selection decision is driven by the bank’s brand image, while branch proximity (21%) and products and services (14%) also considerably influence which bank shoppers ultimately choose.”

Given today’s economy, it’s no surprise that consumers would place a high degree of importance on an institution’s brand image.  But, it may come as a surprise to some that branch location and products/services would be less influential in shoppers making a decision about their financial institution. 

While delivery channels, products and services are still considered to “considerably influence which banks shoppers ultimately chose”, it’s important to remember that the concept of brand is bigger than one single aspect of an institution’s business.  Your brand image is created by the sum of all experiences and interactions someone has with your company.  This may be through direct interaction with your employees or your website, or may be indirect through a conversation with another customer.  In either case, these experiences contribute to a person’s overall impression of your brand. 

Brand image is not created overnight.  And while it may be supported through initiatives like advertising, creating a certain brand image requires focus and constant attention.  As pointed out in the Retail Bank Shopping Survey, “”Some crucial aspects of a bank’s brand image-such as perceived financial stability and reliability-can be difficult for a bank to improve, which negatively affect the bank’s likelihood of being selected.”  

Because different people will experience your brand differently, your brand image will vary from person to person.  Companies that recognize this have gone to great lengths to create and deliver a consistent brand experience to every customer.  These companies have been able to shape perceptions and their brand image.  On the other hand, companies that have not tended to the issue of brand often deliver disconnected, irrelevant and/or inconsistent messages or experiences. 

While this report may come as news to some people, the concept of brand image is not new in the financial services industry. 

Consider information from the J.D. Power and Associates Retail Banking Satisfaction Survey released in May of this year:  “customer perceptions of bank brand image have declined for a third consecutive year.  Low customer ratings in areas of overall reputation, customer focus and personal service primarily drive the decrease in brand image among banks.”  The report goes on to talk about negative media coverage and increased merger and acquisition activity as contributors to consumers’ perceptions.

In the report, Michael Beird, director of banking practice at J.D. Power and Assocaites, offered some valuable (and seemingly obvious)  insights for financial institutions: “By focusing on aspects most critical to the banking experience, banks can win the favor of their customers, which can lead to considerable financial rewards.” 

Executives and marketers need to recognize that the ‘aspects most critical to the banking experience’ have evolved in recent years.  It is no longer sufficient to offer good products and services at convenient branch locations – consumers can get good products and services from just about any financial institution in town. 

A few tips for institutions looking to strengthen or reshape their brand image:

• Focus – You can’t be all things to all people.  Figure out what you want your institution to be known for.  The more specific you can be, the better – emphasize your strengths and look for untapped opportunities.
• Know your market – Look at your customers, prospective customers, your community and your competition.  This kind of evaluation will reveal available market opportunities and challenges.
• Commit to a position – Establish a meaningful and relevant points of differentiation – organize around those points.  Emphasize your institution’s value added and points of differentiation in your messaging, but most importantly - deliver them through the customer experience.
• Manage the experience – Your delivery network, marketing, people, products, processes, etc. should all work to deliver a consistent brand experience for your customers, prospects, and your community.