It’s a well-worn cliché that every crisis also represents an opportunity, but that familiarity doesn’t mean it’s any less true. Financial marketing during the COVID era is a case in point. Institutions that do it well will emerge from the crisis in a strengthened position, while those that don’t will find themselves languishing.
This is also a potential key redemptive moment for the financial industry. During the 2008 crisis, banks were painted as the villain, and the industry as a whole still copes with lower levels of trust as a result. This time, financial institutions can provide a lifeline of assistance, education and reassurance to a deeply stressed clientele. Intelligent marketing choices will be the differentiator.
Not Marketing Isn’t an Option
When you’re in crisis mode, it’s easy to focus on cutting expenditures to protect your balance sheet and preserve your resources. That’s especially so for credit unions and smaller banks, which tend to be rooted in their communities and have a more-direct and personal responsibility to their users than large commercial banks and those customers. That said, experience shows that hunkering down and waiting for the storm to pass is usually an error.
McKinsey’s analysis of how businesses behaved during and after the 1990–91 recession, the Harvard Business Review’s similar review of the 2008–09 crisis, and Bain & Company’s prescient 2019 advice about a hypothetical upcoming downturn all draw the same conclusion: A purely defensive approach to the crisis means you’ll lose ground relative to your peers.
Your Pre-COVID Marketing Plans Need a Reset
That response probably begins with shelving any remaining marketing plans that date from before the crisis. At best they’ll be out of step with your users’ current needs, and at worst you’ll sound tone-deaf and out of touch.
More importantly, you’ll need to reassess what you’re marketing, and why.
Jessica Johnson, currently a consultant at Capital Performance Group and previously Senior Director of Marketing at First Republic Bank, believes it’s time to re-evaluate what you bring to the table. “Community banks and [financial institutions] in general have to reassess their entire arsenal of products and services,” she says, “and really gut-check ‘What is working, what do our consumers need right now, and how are they changing?’”
Your own internal figures will show you which of your products and services aren’t faring well in the current climate. To learn whether that’s because it doesn’t currently suit your users’ needs, or whether it just needs to be marketed in a timely fashion, you’ll need feedback from your users.
Ground Your Financial Marketing in End-User Feedback
Your existing behavioral data will provide little help in the COVID era, because consumers’ needs are changing almost in real time as conditions evolve. Feedback from your users is one way to keep yourself in the loop, and ready to adapt.
“You already did the customer research,” Johnson says, “but now you have to do it again, and then […] reformat your products and services.” She points to the example of First Republic Bank, which retooled its student loan refinancing product into a personal line of credit, because that met the changing needs of this particular market customer segment.
“Gaining insights from consumers doesn’t have to be exhaustive,” Johnson says. “I think you can be iterative and consistent. Partnering with a banker and […] being a part of those conversations is a great way for a marketing team to create new opportunities. You’re not going to necessarily get face time with customers right now, so you might as well be on the phone and asking questions and doing it ‘old school’ or going back to grass roots tactics. That was always a best practice when I was working in that space, but I think now more so than ever with budgets shifting and time being of the essence.”
Focus Less on Selling, More on “Touch”
When your users look back on this period, they’ll see some companies who offered them a lifeline and others who offered to sell them a lifeline, and that will make a world of difference.
“I don’t think this is the era of selling your product,” says Johnson. “I think that’s the wrong move; it’s inappropriate right now when people are going through so many different things. But definitely it’s the right time to say “Hey, we’ve noticed [x] and I’d love to talk to you about how you are doing.’ This may turn into another insight into how to evolve your product offerings.
In my experience, Consumers don’t have any clue what your product set is. They don’t study you, they [just] have a checking account and they don’t know about the other 10 or 15 ways you can help them. So if you don’t tell them, they’re never going to know.”
Those personalized, high-impact messages mark a sharp departure from old-school mass marketing, and they won’t work without fine-grained user data. In her consulting role, Johnson says, “We’re hearing financial institutions be really focused on […] what’s going on at an account level, and being able to make observations, and be proactive about messaging.”
Data Will Limit Your Ability to Respond
Jim Pond, co-founder of the Massachusetts-based marketing agency James & Matthew, also sees financial marketing during the COVID era as data-driven. Like Johnson, he believes that your existing marketing materials were based on data that no longer apply.
“The issue with COVID is that all of those behaviors are now completely changed,” he says. If you have a group of people whose behaviors were ‘X,’ and now they’re ‘Y.’ Someone who was gainfully employed, now perhaps is furloughed or has seen a massive reduction in pay.”
This is complicated further by the rise of tough new consumer privacy laws like Europe’s General Data Protection Regulation (GDPR) and the California Consumer Privacy Act (CCPA). “There’s been a gigantic decrease in the available third-party data you can use to target people. You used to be able to target them by the size of their house, by their income, by so many different factors. That’s all gone now. It used to be you could say ‘I want to target someone with a FICO score of 740.’ If you’re working from first-party data that’s going to be there, but most sites are working from third-party data they’re collecting from other sources. So they have to recreate that.
What makes our job infinitely easier, as marketers, is if we can get good data from the folks we’re working with at the financial institutions.”
Drawing On the Data You’ve Got
The frustration, for Pond, is that financial institutions usually have the data they need but it’s not usable.
“A lot of institutions have no idea what a profitable user looks like, which branches make money and how they make money, it’s a complete black hole of information. All of the information’s there, but they have six different systems and they have no idea how to pull it together. They’re just sitting on mountains of data.
Suppose you say to me ‘Here are our 1500 most profitable clients,’ and you give me all of that information: their savings and asset levels, what kind of cars they drive, whether they owe on their cars or not. Do they have children? Are those children in college? There are so many pieces of information in the system, and inferences you can draw from them. How do I know if the kids are in college? Well, are there outgoing tuition payments? It’s not hard.
Are they primarily making payments to you that are coming from other institutions, or are they primarily banking with you and making outbound payments to other institutions? If so, then who are they going to? Because we can target that. Competitive attack, looking for weaker competitors and hitting them really hard, is one of my favorite things to do. It’s as simple as buying Google Adwords, so when somebody looks up competitor ‘XYZ’ you show up too. The hard part’s the data.
So the lack of information harms these institutions not only from an internal decision-making standpoint, but when you have external partners helping you.”
Refocus on Your Core Strengths and Brand
Your aggregate data can also serve as a vital mirror, helping you identify the core strengths of your brand. “When you look at credit unions and many community banks,” Pond says, “They started with some sort of common bond and that, for all intents and purposes has gone away. So what is the common bond now?” The answer, he says, is your brand: carving out a niche of your own, and having your brand be something that specific individuals – not the world at large – will want to interact with.
“How do you figure out how 50,000 different members think? “ he asks. “You have their purchase behavior. There’s no better indicator of who someone is, than looking at what they buy. Who do they buy from? What brands do they interact with? Most people have to engage with their financial institution every day, and most institutions are squandering this consumer behavioral data that can inform what sort of credit union or bank they should be.
If you can identify through data what behaviors and purchase decisions your users are making, based on their values, you can start adjusting your messaging, your brand presentation, and everything based on that. Instead of trying to get everyone, go out and get more of the people who clearly connect with you and engage with you. ‘How can we be the best us?’ is exactly what the data is going to tell them.”
Build Trust and Commitment Through Education
From Johnson’s perspective, simply informing and reassuring your users through this unsettled time can be a powerful marketing tool in its own right. “It’s always been imperative for financial institutions to help consumers understand the why behind personal finance, and make it simplistic, digestible and a lot easier to understand,” she says. “I think it’s really important for … financial institutions as a whole to provide content that is really going to help the consumer.”
For now, slapping up general-purpose blog posts on your site or social media accounts won’t cut it. “We’re hearing and seeing in our own research at CPG that consumers are changing; the way they digest content is changing,” says Johnson. “You’ve got to have interesting methodologies [for] getting your messaging out. I think it’s going to be about video — a little more raw and authentic.”
She points to fintech provider SoFi as an example, with its focus on the millennial market. “SoFi has done a tremendous job of having speakers who are speaking generationally to their audience. They do a great job of connecting with their segment, and understanding who they’re talking to. Obviously, they have a larger budget than [smaller] financial institutions, but I think you can take the essence of what they’re doing and translate it at a smaller scale.”
Your own banking platform can be one of those smaller-scale marketing channels. For example, if your data show a significant percentage or your users having trouble with loan payments, you could:
- Turn to a well-regarded CPA for advice on refinancing.
- Have your creative team turn that advice into an infographic.
- Use your mobile app to push a link to users whose profiles suggest they’d benefit from the advice.
This approach can be highly cost-effective, because the investment is modest if you already have a suitable platform. “There are other methodologies that are a little more bite-sized that don’t have to be so ‘produced,’” Johnson says.
Don’t Lose Sight of Long-Term Strategic Goals
A final touchstone for your COVID-era marketing should be the same as what underpins all of your marketing strategy: your brand identity, your core strengths and your long-term marketing goals. If you’re a community-based financial institution, regardless of whether you’re a bank or credit union, this should be less of a transition than it might be for a major commercial bank. You’re already in the business of personalized banking, and this renewed emphasis on user-centric financial marketing plays into that.
Have a consistent set of guidelines for how your efforts are presented and — ideally — a limited number of senior people providing final approval of all of your marketing messages. That will limit the risk to your reputation from miscommunication, and will help keep your marketing on-brand and on-message. You’ll want to come across as a neighbor lending a helping hand, not a vulture swooping in to take advantage.
Mostly, says Pond, the key is staying as informed as possible and prepared as possible, but not over-committing. “The reality is not doing much immediately, but having plans for a lot of eventualities. No-one knows what’s going to happen, we’re only in the third inning right now. Financial institutions need to have access to the data of how their customers are acting, and then adjust their messaging and shift it on perhaps even a monthly basis.”
Give Your Team the Tools They Need
Marketing attracts creative minds, but your team’s ability to harness and direct that creativity will be constrained by the tools they have to work with. The kind of personalized attention and marketing your users will expect, both during the current crisis and beyond, require a potent set of digital tools.
If your current platform doesn’t provide you with the analytics tools you need to empower your marketers (and users) to get through the crisis, then COVID-19 has rendered it obsolete. If your technology puts you at a competitive disadvantage, contact Lumin Digital today to request a demonstration of its state-of-the-art, fully integrated digital platform.
With Lumin Digital, you’ll have easy access to user data and reports in real-time, all the time, so your marketers and executives can make decisions based on solid information that is granular to the level of individual accounts. That’s not the future of banking — it’s the here and now.
Jessica Johnson and the Capital Performance Group have no affiliation with Lumin Digital or PCSU, and offer no recommendation or endorsement of the product, express or implied