Impossible you say? On the surface, I agree it seems counterintuitive. Think of the budgets, the resources, and the manpower that big national companies have ready at their fingertips. Bank of America, for instance, is estimated to have a marketing budget over $2 billion per year. So, how are our (much smaller) community bank and credit union clients achieving 2 to 3 times the national average click-through rates on digital display ads? And with relatively small digital marketing budgets? Here are a few observations to consider:
Big bank brands are less trusted or liked in general.
Since 2009, large banks have struggled to rebuild a positive brand after the market collapse. This did not seem to affect the perception of smaller community banks or credit unions in the same manner. As other issues arise (the Wells Fargo incentive debacle is a prime example) those perceptions are reinforced. This fact alone has helped our clients in the past 7+ years with above-average response to checking acquisition strategies targeting big bank competitors in their market.
Big bank consolidations are now happening at a high rate.
And most likely will continue at that rate for some time! For one community bank in southern Louisiana this is a major focus in their current marketing strategy. With numerous consolidations in their footprint, we are helping them target consumers most likely to be affected by the consolidation with personalized direct mail, household IP targeting, and geo-targeting. The current click-through rate is a .22%. Considering the national average is reported to be in between .07% – .09%, this is a significant difference.
Consumer behavior may also play a role.
Back in 2012, a Bain Retail Banking Study found that the number one source of information about financial products and services was the internet. That was 5 years ago. When an online search for a specific banking product occurs in your geo-targeted market, it makes perfect sense to serve that consumer a digital ad with a compelling offer — Right? The big banks figured that out quickly and pay to dominate Google AdWords search rankings (FYI – this is not the place to compete with the big banks but that is a topic for another day.) Good thing Google AdWords is not the only online option. The ability for a locally-owned financial institution to serve a message relevant to that consumer…on a laptop, mobile phone or other device…is something unexpected but effective. And not just with Millennials, but (surprise) all age groups.
Not all display ads are created equal.
Compelling creative certainly is important as is having offer-specific landing pages that explain the benefits and details of the offer. It’s important to include any fine print for compliance reasons – as well as Member FDIC, NCUA or Equal Housing Lender. Digital ads have less real estate to relay your message, so the focus of the creative ad is to grab attention and interest. Once a click occurs, it should direct them to an easy-to-follow and relevant landing page to generate further action. Responders should not be sent to your home page and then expected to know where to go (hint, they don’t really want to figure it out on their own). The easier it is to follow, understand and react the higher your conversion rate will be.
So, yes, community banks and credit unions appear to have a natural built-in brand advantage to compete online in 2017. Only 15% of all financial institutions reported having a mature digital marketing policy in 2016 (The Financial Brand, 2016). Most that do have a mature policy are the large national banks. Yet, there are notable exceptions in the community banking arena to learn from — Citizens Bank in Edmonds, OK and Community First Credit Union in Jacksonville, FL, are just two that come to mind — but there are many others.
If your marketing staff is already running at full speed with traditional marketing initiatives, look for assistance from a digital marketing partner that understands the banking industry. If you have tried Google AdWords with minimal success on your own — don’t throw in the towel on digital marketing. Keep in mind there are many other options available in your market and Google AdWords may not be the best option to compete in your digital footprint.
It can become overwhelming for an understaffed marketing department to decide where, when and how to utilize a digital marketing budget. But, that is the key to creating a unique advantage for your community bank or credit union. Finding the right combination of channel, offer, SEO and geo-targeting will help make smart use of your marketing budget AND with better success in your market than the Big Banks likely experience.
Jennifer Brooks has over 20 years in the financial marketing industry. She is Chief Marketing Officer at Stellar Strategic Group, LLC. To learn more about digital marketing, please contact jennifer.brooks@thestellarfinancialgroup.com or 402-281-0692.