When it comes to banks and credit unions, there may not be a more competitive space. Most urban and suburban geographies across the United States offer an abundant amount of banks and credit unions for consumers and businesses to choose from for their banking needs. It is hard to drive a mile or 2 in some areas without seeing a handful of financial institutions.
How does this impact marketing for a bank or credit union? It creates an incredibly competitive industry. It becomes extremely difficult to naturally differentiate products or services between a bank or credit union. Financial institutions try to separate offerings by better rates, improved customer services, new product offerings, etc. to attract new customers and members.
Coupled with the difficulty in differentiating products and services is also the high barriers to switching financial institutions. Our market research company has learned through many studies, consumers believe there is a lot of time, effort, and stress in switching to a new bank or credit union. With this in mind, how effective can marketing be?
In many cases, consumers believe all banks and credit unions to be the same and they also believe it takes to much effort to make a switch. This does not paint a very rosy picture for bank and credit union marketing does it?
In this article, our company will highlight several key strategy points and market research options to help grow your customers at your bank or credit union. In order to grow your customer or member base, you need to fully examine the following at your financial institution. Better understanding these 3 components will help you fully differentiate your bank or credit union from your competition.
In order to grow your customer base, banks and credit unions need to take a critical look at these 3 components to differentiate their financial institution from their key competitors.
Improve Your Messaging
It’s not about how much you spend in marketing and advertising, it’s about the messages you use to convert new customers and members. Do you know what your customers think about your financial institution? What separates it from others? What is better about your bank than other banks.
Sure you have your own internal perceptions and beliefs of these factors but it is very well biased. We talk to our clients all the time about one simple belief when it comes to market research: “Better is not the opinion of the seller. Better is the opinion of the buyer.”
Loan officers, tellers, and marketing managers all have beliefs on why they believe their bank or credit union is better than the competition. At the end of the day, none of this matters. What matters is what your customers think and why they do business with you. Equally as important is understanding what your non-customers think and why they do not do business with you.
A simple strategy to collect this feedback is through a market survey. Your organization can work with a banking market research company to survey the general community. In this survey, you can ask questions about the following:
- What factor(s) are most important when choosing a bank?
- What word(s) or phrase(s) do you associate with our bank?
- What is your perception of our bank? Why?
- Where have you seen or heard information about our bank recently?
- How familiar are you with our bank?
- What would it take to get you to switch to our bank?
- What are your perceptions of these competitive banks?
- What do they do better or worse than our bank?
All of these questions would lead to valuable insight into your messaging. You can center your marketing campaigns around fact-based and evidence-based data. The marketing messages would reflect exactly what the general community wants/needs in a bank and further drive home or change their preconceived notions on your bank.
Define Your Culture, Align Your Outreach
What is the culture like at your financial institution? It is one thing to market yourselves as a fun and friendly bank in your outreach, but the culture must reflect that for your customers. If they visit or call your bank with questions and the representatives and they are short-tempered, unfriendly, or unhelpful, your culture does not support the message you are trying to convey.
Internal core values of your culture must match the messaging outreach you use in your marketing and public relations. If there is any misalignment there it will cost you customers and members who are inquiring about a new bank.
Your core values should work from the inside out. Find out what makes your employees tick, what they can offer customers, their expertise, etc. and leverage this in your communications.
A simple way to better understand your culture is to conduct an employee survey. Here are some of the relevant questions which would help your bank understand its culture and grow customers.
- Is our team quick to act on customer requests? How can we make this faster?
- What are some of the most common customer complaints?
- What are 3 things in your day-to-day work routine that frustrate you the most?
- How can our bank be better in 3 years than it is today?
- Are you provided the tools and resources you need to perform at your job?
- What other forms of job training do you need to make you more effective?
Examples of Outcomes of Market Research
Mini Case Study 1
A small credit union in Arizona with 5 branches hit a wall in terms of new member growth over the past 3 quarters. Not understanding why, the credit union conducted a market survey to understand factor(s) in choice, perceptions of the credit union, and what exactly was preventing further growth.
The survey discovered the credit union was viewed as low-tech and offered sub-par online banking and mobile apps compared to other credit unions and banks. The credit union made a strategic decision to upgrade those technologies and refresh its marketing messaging to attract this audience the following year.
Mini Case Study 2
A regional bank used the slogan “Your friendly bankers” as part of its marketing messaging for over 5 years. Trying to determine whether this approach was stale or needed a refresh, the bank conducted both a market survey and employee survey to understand perceptions of culture. It was determined from the market survey, both customers and non-customers alike viewed other banks and credit unions as offering more friendly service.
Respondents mentioned friendliness taking a nosedive in the past 2 years. Similarly, the employee survey results echoed frustrations, poor communication, and stress in their survey responses which all impact friendliness. It was learned since the bank acquired a brand 2 years ago and nearly doubled the number of branches, training and finding high-quality staff took a hit. “Your friendly bankers” was no longer resonating with either consumers or staff and created misalignment with strategy.
The survey uncovered some common traits and more productive core values to translate into marketing messaging.
Contact Our Banking Market Research Company
Drive Research is a bank and credit union market research company located in Syracuse, NY. We work with financial institutions across the country to fuel strategy using data.
Questions about our process? Wondering how we can help? Contact us below.