Bank Marketing Strategy + Ideas

As a small business owner, I remember the days when deposits had to be made at my bank by 2:00 PM. The mailman would sometimes be late coming by my office, so I would always stress out over covering the checks I needed to pay or had already written.

I even kept a map of all the bank branches so that if a client called to pick up a check, I knew where I could make the deposit in time.

I remember the day when my bank’s ATM started allowing me to deposit checks as late as 8:00 PM and still make it into my account that day. Of course, by then the mailman wasn’t coming until 5:00. The good news was that deposits could go into my account the same day. The bad news was that checks I had written would also clear the same day.

No more float for small businesses.

But now there is exciting news for small businesses. Businesses can take a photo of checks with their smart phones and deposit them into their checking accounts within seconds. No need for ATMs. No need for computers. No need for the internet. No need for bank branches. And no need for bank employees.

Until recently, banks and bankers have always had a great reputation. In every small town in America everyone knew their local banker. These days are changing.

So what are banks suppose to do? They’ll also need to change. Banks will have to start promoting and marketing these new services before their competition does. And their competition isn’t just the bank across the street anymore – there’s competition coming from everywhere.

Banks can’t just sit back, offer free checking, and expect customers to come flocking in. They’ll need to aggressively promote their mobile banking, online banking, remote capture, and their local community support.

They’ll need to learn to use QR Codes in their ads and how to use text promotions and e-mail campaigns. They’ll need to learn to blog and provide their customers with useful information on how to budget, save, and how to pay for their child’s college education.

Make no mistake: the banking industry is changing. And for bankers who aren’t paying attention, it could mean their jobs.

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Neal Reynolds has worked with hundreds of banks and credit unions around the country helping them to grow core deposits and market share without growing their marketing budgets. Contact him at nreynolds@eadshop.com.

Brace yourself: here come the fees.

Last week, we talked about how the country’s banking environment is evolving in light of recent regulatory changes and their negative revenue impact on banks. Recent federal regulations have capped overdraft fees, certain levies on credit cards, and even what banks are allowed to charge merchants when customers use their debit cards.

Now, banks are making a move to recap some of that lost revenue.

Check out these recent headlines about how banks like Wells Fargo, SunTrust and Regions Bank are beginning to charge monthly fees for debit card use for customers in some states. Will community banks follow suit?….

Atlanta Journal-Constitution – Debit card fees could signal trend:

http://www.ajc.com/business/debit-card-fees-could-1122638.html

CNNMoney – Wells Fargo to test $3 a month debit card fee:

http://money.cnn.com/2011/08/16/pf/debit_card_fee/index.htm

Wells Fargo: No more debit card rewards:

http://money.cnn.com/2011/08/22/pf/wells_fargo_debit_rewards/

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Neal Reynolds has worked with hundreds of banks and credit unions around the country helping them to grow core deposits and market share without growing their marketing budgets.  Contact him at nreynolds@eadshop.com.

Let’s all say goodbye to banking as we know it. The writing is on the wall. Or, should we say, the writing is in the new Dodd-Frank financial reform bill.

For many years, community banks have handled the financial needs of local towns and communities. These banks took in deposits, made loans, and earned a small margin in between.

Then someone in our government decided that these banks should loan money to folks that might not be able to pay the money back. This was called the Community Reinvestment Act and it empowered regulators to punish banks that failed to “meet the credit needs” of “low-income, minority, and distressed neighborhoods.”

The two government-chartered mortgage finance firms – Fannie Mae and Freddie Mac – encouraged this “subprime” lending by authorizing ever more “flexible” criteria by which high-risk borrowers could be qualified for home loans, and then buying up the questionable mortgages that ensued. Most of the “bad” loans in this country were bought by either Fannie Mae or Freddie Mac.

We have all seen the results of this Act over the last couple of years.

Many community banks made a lot of real estate loans based on the fact that 1) they “ain’t making any more land!” and 2) real estate values had historically increased. In the fall of 2008, the regulators decided that real estate loans were bad and proceeded to force these community banks to quit making real estate loans and to write down the loans they already had.

As the required capital dwindled in these banks, regulators forced the banks to raise more with the threat of a “cease and desist” order. This basically told the directors to raise capital or they would shut down the bank. This “order” became public knowledge and was published in many hometown newspapers. Guess what happened next.

Remember the movie It’s a Wonderful Life? Well, being a bank officer and director during this time wasn’t exactly a wonderful life.

Depositors were going into the banks and withdrawing their money while the real estate borrowers quit paying their loans, telling the banks they would just buy these loans back at 10 cents on the dollar from the FDIC when they failed. And that is exactly what they were able to do. The FDIC would shut the banks down and then sell the loans for 10 to 20 cents on the dollar. Many of these banks had participated these loans out with other banks, so when one bank was shut down, it contributed to other banks failing as well.

Now the Dodd-Frank legislation has come along, which will put the nail in the coffin for many more banks. This law will add a lot more cost to banks with the increased reporting, analysis and requests for information. These expenses will be in addition to increased FDIC insurance costs the FDIC has imposed to pay back its losses.

What does all of this mean to a bank’s customers? Ultimately, banks will have to start charging more for checking accounts and other services. In fact, Bank of New York has even started charging customers for depositing large amounts of cash. An article in a recent issue of Fortune magazine stated that an estimated 4 million customers left the biggest 30 banks last year because of fees and an additional 11 million are expected to leave this year.

Where are they going?  Many are buying prepaid debit cards from companies like Wal-mart and American Express. They are also heading in record numbers to payday lenders like Cash America International and Quicken Loans for mortgages.

So what does all of this mean for banks? Well, things will need to change.

Banks must stop assuming that customers will just walk into their bank because they are convenient. Just like any other business, they’ll have to start calling on potential customers. They’ll need to start marketing themselves more. They’ll have to promote services like remote capture deposit and online bill pay. And they’ll need to customize and personalize their products and services to fit the needs of individual customers.

Many investment bankers are predicting that in the future there will no longer be banks with less than $500 million in assets. Banks will either grow up or they’ll be gone. Small community banks need to get busy!

Follow our blog over the next few weeks for a special series of posts highlighting innovative ways to effectively market your bank in this changing financial environment…

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Neal Reynolds has worked with hundreds of banks and credit unions around the country helping them to grow core deposits and market share without growing their marketing budgets. Contact him at nreynolds@eadshop.com.

No matter how creative or innovative your marketing ideas are for your bank, you have to have the right salespeople in place to effectively carry out your strategy. But when hiring or managing your salespeople, how do you know who has what it takes?

Here are some tips from my friend, Louie Bernstein of www.sales-getters.com, who has over 22 years of experience successfully developing sales departments and salespeople:

7 Disciplines You Should Expect from Your Banking Sales Team

There are certain actions that, if your salespeople perform correctly, will bring you the business banking results you want.

#1: A good attitude. If your sales team doesn’t have a good attitude, you have problems from the very start. A good, positive, sincere attitude can be contagious. A bad attitude in the group won’t necessarily kill the group, but it’s like driving with a flat tire. You can get there, but it will take longer and it’s ugly.

#2: A desire to get better and learn. Sales reps, like other professionals, need the drive to become the best at their craft. With the web, eBooks, podcasts, email newsletters, etc., it is easy to find relevant, well-designed sales training – even as it applies to business banking. A lot of this training is free. You can do your part by providing an environment that is abundant with tools and by pointing them to the above resources. A regularly scheduled training session is also a must. You may get resistance at first, but the reps who really want to succeed will come to demand these sessions.

#3: A desire to be better than the competition. Make no mistake about it: the top-performing rep is the one who does not like to lose. This is great, as long as they don’t point those fangs internally. Everyone likes to win. You want reps that hate losing to the competition and don’t like taking second place. You must instill the concept that “there is no money for second place in sales.” Until they embrace this concept, they will never have that sense of urgency.

#4: A guaranteed number of QUALITY calls. Your reps need to be thinking about making quality calls rather than focusing on quantity. They should not want to leave the office until a certain number of quality calls are made – meaning new prospects or current prospects that are moving closer to a sale. If your reps practice, drill and rehearse – and then add quantity – the sky’s the limit.

#5: Documentation for every call. Sales reps come and go. You don’t want them to go with the knowledge of your customers in their heads, never to be seen by your company again. Whatever system you use for tracking customer interactions, make sure your reps use every bit of it. Every phone conversation, meeting, presentation, etc., needs to be documented in your CRM system. Additionally, it is a good idea is to send a follow-up email or letter after a presentation, strategy call or demo. It should document who was present, what was discussed, and what the action items are for each party.

#6: The highest degree of integrity. You cannot be one kind of person and another kind of salesperson. You cannot tolerate (or afford) to have unethical salespeople in your bank. One thing that should get a sales rep fired on the spot is lying to or misleading a customer or prospect.  How your sales reps act with your clients is a reflection on you and your entire bank. This rule should be posted and communicated to every rep (and employee) from their first day of employment.

#7: To be thinking about getting customers instead of deals. In business banking, your growth will come from repeat business or recurring revenue from your existing customer base.  You can make promises to close one deal, but that’s not how you build a business. Your sales reps should be aware of how satisfied your customer will be one month or one year after the first sale. Make sure your reps aren’t making promises your bank can’t keep. It starts with you letting your reps know your bank can’t realistically do some things just to get the deal – and they need to know you are okay with that. It may mean shorter term gains, but it translates into happier, longer-term customers and profits.