Take Action Now To Build Skills Around Understanding Data
July 8, 2020
By Rick Hall | Special To Banking Mid Atlantic
Talk to any banker these days, and the topic of customer acquisition challenges is bound to come up. Growing and differentiating is more difficult than ever — especially with the current rate environment for deposits. Thinking strategically about this conundrum is tedious but crucial.
Data-driven marketing is arguably one of the most critical functions banks need to be leveraging when it comes to new customer acquisition. According to the Boston Consultiong Group, a majority of new bank customers said that a data-driven personalized approach was a major factor in their decision to move to that bank.
In the past, banks could get away with using baseline demographic attributes for targeting prospects and relatively simple product analysis for cross-selling programs to existing customers. These demographics have also been used to measure the efficacy of those programs. But those days have passed, and bankers can no longer ignore the reality of the gig economy.
In today’s digital-first world, bank marketers need to use real-time tools to better understand detailed behaviors to form their acquisition strategies. In recent studies, many digital consumers view banks as simply a place to park money.
Changes In Models
Therefore, the concept of straightforward segmentation — used for years by bankers — has evolved. It has moved from a lifestyle grouping model that includes age, income, and homeownership to a behavioral grouping model that looks at elements such as online subscriptions, affinity affiliations, charitable interests, and virtual payment appetites.
So, is this a “close up shop” moment? Not yet, but it is a serious threat to the future of many institutions.
However, if you take a step back to understand what’s happening in financial culture, you would admit most of the future is out of your control. It’s time to figure out how you are going to catch the right part of the wave that banks can still own: data.
Big data was a buzzword years ago that got a lot of attention, but it only went away in the headlines. No one has solved the underlying issues. Many have just viewed the problem as too big or complex, and they pass it to another part of the organization or rely on a partner to figure it out.
But as marketers, we should know more about customers, markets, and prospects than anyone else in the bank. And that knowledge can drive growth because we have access to behavioral data. When data is structured properly — cleaned, normalized, and analyzed — it gives modern bank marketers more insights than ever.
How to Use Data
Getting data in shape can be done. You just need to know what steps to take to harness it so you can gain the insights buried within.
Bank marketers should take action now to build skills around understanding data, how it works, who you can partner with, and how it can be used for your initiatives in 2020 and beyond. This is not a trend that will reverse itself. As the consumer market decides how it wants to do business with you, banks will be better positioned to create real value.
We need to take this opportunity to reposition marketing in financial institutions as the center of fact-based initiatives that demonstrate what your customers want. Building strong banking relationships with customers means that you will still be serving them five to 10 years from now.
Rick Hall is the managing director of the banking and financial services practice at BKM Marketing.
“How many of the community banks here believe their customer service is average or below average?”
The Bottom Line
Most financial institutions have tremendous excess capacity in their existing branches today.