What do bananas and baking soda have to do with bank marketing? I thought you would never ask. Let’s start with the bananas…
If I were to hold up a bunch of bananas and asked an audience what they were, most would probably agree they were bananas. But if I held up a green banana and asked the same audience how many would buy this particular banana, less than half would raise their hands. And if I held up a banana that had already turned dark, even fewer would probably want to buy this banana.
As you can see, we are not really selling bananas! We are selling banana skins. People buy bananas based on what the banana skin looks like.
In light of this fact, a smart produce manager would market bananas in different ways, understanding that some people prefer ripe bananas, while others prefer green or darker bananas. Perhaps he could market the dark bananas alongside recipes for banana pudding and even place them next to the vanilla wafers. Maybe he could even add a headline like, “Ready for Grandma’s Banana Pudding?”
He might market the green bananas to folks heading out on a vacation, with a headline like, “Traveling Bananas – they’ll be ripe when you get there!”
A good marketer can take a product that many people think of as one thing and sell it in different ways.
Now let’s talk about baking soda. This is a product that has been around for over a hundred years and there are thousands of ways to use it. A good marketer might list some of these many uses on the side of the package.
You can brush your teeth with it, freshen your mouth, put it in cat litter to eliminate odors, clean pots and pans with it, eliminate odors in the refrigerator, use it as an antacid, polish silver with it, or even clean batteries. That’s how baking soda was marketed for years.
Then, one day a very smart marketer decided that he would put this same baking soda in a box with “Fridge-N-Freezer” on the front alongside a tagline that read, “30 days of freshness in every box.” He also decided to charge $.10 more per box. And guess what? People started paying $.10 more a box just to have a picture of a refrigerator on the front of the packaging!
Then this very smart marketer decided that if people would pay more to have a picture of a refrigerator on the front of the box, they might pay even more to have a picture of a cat on the front. After all, people spend millions of dollars each year on their pets. They put a picture of a cat on the front of the box advertising it as “Cat Litter Deodorizer” with “Activated Baking Soda” and starting charging over one dollar more per box! (I love the tagline “Activated Baking Soda.” I wonder who would buy non-activated baking soda? I guess people are willing to pay more for their baking soda to be activated!)
This proved to be so successful that before you knew it, baking soda was in every isle of the grocery store with many different product names and profit margins ten times that of the old-fashioned baking soda in the plain old box.
This brings us to banking. I’m sure you are wondering, what do green bananas and baking soda have to do with banking? Well, it has everything to do with banking!
For hundreds of years, banks have marketed and advertised themselves as plain old generic banks. A few got creative and started calling themselves community banks.
Throughout history, we have given our kids piggy banks for them to put their money into as a savings account and taught them how to take it out in a real emergency (when it was time to buy some candy.)
Most of us have grown up believing that you put your money in a bank and the bank keeps it for you until you need it. Historically, banks advertised CD’s and money market accounts to get us to put the money in the bank, and promoted car loans, mortgages and home equity loans to lend it out – all while making a small margin in the middle.
Banks even gave out credit cards like candy trying to get customers to charge, charge, and charge, always hoping that they would be late one month so that the bank could raise the interest rate to 19% or more.
But the last few years have changed all of this. Many people don’t have money to save and most have learned to quit running up large balances on their credit cards. And many banks are afraid to make loans in fear that those folks that ran up their credit card debt won’t be able to pay them back, especially since real estate values have plummeted.
Now is the time for a really smart marketer to apply the “green banana” concept to the banking industry. We need to realize that every individual and business has different banking needs.
For example, a large apartment community collects dozens of checks every day throughout the month. And each day, the apartment manager leaves at noon to take the checks to the bank and go to lunch. But before they go to the bank, they make copies of the checks and fax them back to headquarters to let them know which residents have paid their rent. Some apartment managers might decide to collect the checks and make a “weekly” run to the bank.
Both of these solutions are inefficient.
A smart bank marketing manager would target those apartment communities with personalized and customized marketing materials that explain how their bank can eliminate the pain of copying checks, faxing checks and going to the bank every day to deposit them.
These marketing messages would talk about the many benefits of remote deposit capture, for example, and even include the apartment community’s name or logo. A smart marketer could even create an additional piece targeting the apartment community’s corporate headquarters, making them aware of the potential liabilities of having their managers driving around town with thousands of dollars on hand at any given time.
This marketing piece would also discuss the many benefits of remote deposit capture and how, if management utilized this service, they would be able to see images of the actual checks instead of faxed copies. And even more importantly, deposits can be made in minutes without requiring anyone to leave the property.
And, of course, customers utilizing remote deposit capture are a prime candidate for online bill pay and e-statements. In fact, that same smart marketer could develop an “Apartment Banking” product line that promotes all of the bank’s services that an apartment community could use. They could even buy the web domain name ApartmentBanking.com for $9.99 and use it to promote their apartment banking product. (This name is still available, but you’d better hurry!)
The bottom line is this: there is no reason you can’t have an Apartment Banking product – just like you can have “Cat Litter Baking Soda.”
And this doesn’t just apply to apartment communities. You can target different industries with this same concept. Find out what each industry needs that is unique and position your products around them.
Find the pain and position your bank as the solution. Sure your bank can work with any industry, but you’ll get more business – and possibly better margins – by positioning and marketing yourself in different “aisles.”
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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 [email protected].
