Bank and Credit Union Marketing is Worse Now Than Ever

Bank Marketing Is just Plain Terrible

By Tom Dougherty

Bank marketing is in a juvenile stage
Bank Marketing has a way to go

If the financial crisis has taught us anything about bank marketing it is that financial institutions will never learn. But maybe they just don’t want to.

First off, it is clear that the major banks believe they are too important to fail. They have effectively given the middle finger to the American taxpayer and the government by paying out insane bonuses while tightening lending. This, after receiving a massive injection via TARP and agreeing to, at least publically, to unfreezing capital markets especially for small businesses.

From a branding perspective – looking at things through the eyes of target audiences – these banks marketing departments do not seem to care. They do not seem to care that there remains a vast amount of anger and frustration regarding the financial services industry. They do not care that some of the consumer pain was caused by the financial services industry, especially to those unemployed or underwater in their mortgages. And, they do not seem to care that the perception is they are not doing anything about it.

Seeing Red

On that last point, there are a few who have responded, even if in small ways. Bank of America, has taken the step and responded to the current economic climate by changing its primary color from blue (which most of the banking industry uses) to something different – red – that no doubt reflects how target audiences are feeling.

Past that, however, the major banks continue to say the same things they have always said: We have good rates, good service, convenient locations, longevity and we will “help you get ahead.” Which if you think about it, roughly translated, they are all really saying, “Bank here. We are a bank.”

This “table stakes” brand approach is nothing new for financial services; they have been doing it for years. However, Regions Bank has upped the table stakes ante with its latest round of television ads in which Region’s tells us that we can actually save our money at the bank. Now that is a novel idea.

Granted, Regions says it is giving us “tools” to better manage and save our money, but they are really saying, “Bank with us and we will let you save your money here” (Bank here. We are a bank).

Credit Union Marketing is Worse

Credit Union marketing is worse than bank marketing
Credit Union marketing is often bad

Credit Union marketing is even worse. They tell prospects they are “the most friendly,” “have been around for years” or something about their rates and fees. One of the issues credit unions face is that most people have no experience with them. Audiences immediately think they cannot use them or think of them as being so downscale, they are eliminated from the prospect’s considered set. For those few consumers who consider them at all, they mostly view credit unions as a place to put their not-so-serious money, get a car loan or generally something “less” than a bank.

There should be opportunity for a major player(s) to position itself as something different with banks all saying the same things (bank here, we are a bank) and credit union marketing believing people will come if they say how friendly they are. Right?

Sadly, no one is stepping up to grab this unique market opportunity. A few credit unions are trying and even succeeding but most do not have the critical combination of resources and guts needed to make a difference in their markets. (Credit unions as a whole have probably squandered a one-time opportunity.) Those credit unions that are having success are limited by the scope of their charter or their budgets.

Its Not Like They Don’t Know

Bank marketing, on the other hand, are not even trying. They continue to try to persuade with geographic location, online services and products. The market leader, Bank of America, sets the pace, and the remaining players try to copy them. All the while a field of diamonds lies before them that they simply ignore. Why?

Because they simply don’t want to be held accountable. (Read more about marketing in the banking sector here)

Bankers are not stupid. They know that if they brand themselves in any consumer-oriented and meaningful way, consumers will hold them accountable. They know that if they do not promise anything more or less than the bank across the street, their customers will just accept whatever they get. And since switching financial institutions is such a huge hassle, most of their customers will put up with an awful lot before they switch.

Bank of America, Chase, Wells Fargo, BB&T, Suntrust and the rest all know how difficult it is to switch. They make it that way on purpose. They do not want to lose customers. They know if they make it hard for them to switch, customers will have to stay. And since none of the competition incites a customer to switch through the delivery of a meaningful brand they simply keep doing what they have always done.

Power of Brand in Financial Marketing

Since the power of a brand comes from a connection with the beliefs of the target market, there is a connection between the prospect, the brand and the organization. As such, there is a promise of loyalty for the customer/prospect to a brand as long as the brand promises are met. If any given brand fails to live up to its promises, the customer looks for another brand that resonates with their beliefs – and switches, regardless of how difficult it is.

Bank of America spends $1.5 billion in advertising each year. This just seems wasteful. What Bank of America lacks in meaning, it hopes to recoup in frequency. What’s worse is that it is doubtful anyone has ever decided to bank at Bank of America because of one of its ads. BofA simply represents the industry in much the same way Budweiser represents beer.

What the financial services industry is really lacking is a true leader. A leader who really believes it is time to change the status quo because there is opportunity to capitalize on the stasis of the rest of the industry. A leader who has the foresight and fortitude to take a stand, mean something in the market and be held accountable by their customers. A leader who is hungry to steal market share.

The most powerful brands are those built on the belief sets of the prospects they wish to influence. Couple that with a unique and substantial advantage for a first mover, an aggressive and hungry bank could change the game. (Read a case study on First Financial Bank here)

Bank Market Study

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