Facebook Marketing for Financial Institutions

A recent article in the Financial Brand talked about the role that Facebook plays in financial services marketing, particularly with regard to mobile.

http://thefinancialbrand.com/51395/facebook-mobile-marketing-in-banking/

Traditionally, banks have been very hesitant to move into mobile marketing. This occurs for a couple reasons

1. Regulatory - many banks have compliance groups that worry about selling on a mobile device. Given these concerns, the advertising would be focused on brand-building, which is hard to attribute to actual sales, so often would be overlooked.
2. Its a new channel - making the switch to a new channel is always difficult. Since most customers do not actually complete the transaction and fund while on their mobile device, it is very tough to make the business case for mobile marketing

 In the article, they talk about the large number of customers that login daily on their mobile device and monthly more broadly. Given this volume of customers and the attention that consumers give to their mobile device on News Feeds and Instagram, this is clearly a medium that will only grow over the next couple of years.

Email vs. Direct Mail

The other day, I was talking with somebody that asked the question of whether email would overtake direct mail as an acquisition engine for retail banks. In order to help answer this question, I looked at a number of sources, including:

http://smallbiztrends.com/2015/02/successful-email-marketing.html

The largest difference between email and direct mail is the cost and response rate. One study I read quotes the average response rate of email at less than 0.1% while direct mail is typically quoted at about 2%. That said, the average cost for direct is significantly higher because of postage and paper costs. Therefore, banks need to make a trade-off of these costs and the management of email campaigns in order to make decisions between these two channels.

There were a number of findings that I felt were very relevant, including that 81% of online shoppers are more likely to make both online and in-store purchases due to emails based on previous shopping preferences and behaviors. This is a critical element because it does suggest that you need to have "permission" from the customer in order to present them with the offers. Across all forms of direct response marketing, there is a large jump in response rates when the customers have given you permission (implicitly or explicitly) to market to them.

As banks building email strategies, this would suggest that creating relevant content that could drive potential customers to sign up for alerts and provide you with permission to email them, could be a really effective approach to email campaigns.

One bank that I believe has done this well is Chase with their home mortgage app (https://www.chase.com/mortgage/mynewhome-app). They provide a service (free) that walks potential home buyers through the whole home buying process. As part of the process, they are getting all of your relevant information and painting themselves as partners in the process.

TD Canada Trust goes viral

Last year, TD Canada Trust successfully conducted a Thank You campaign with its customers. During the campaign, employees handed out 20,000 envelopes containing $20 bills, utilized ATMs ("Automated Thanking Machines") to distribute gifts, trips and thanks to a lot more customers, and finally called customers in order to inform them of a direct deposit into their account. In all, a total of 30,000 customers were given gifts as part of the campaign.

For the bank, the campaign gave them great press that supported the overall brand very effectively. Coming out of the campaign was a youtube video that within a week, the video had more than 2 million views and was shared more than 200,000. Additionally, it made it onto a number of major publications (the Today show and Forbes magazine to name a few). At this point, the youtube video has now had 20 million views.

When you conduct the math - 30,000*$20 = $600,000. You assume that about 200 of the gifts were more substantial (a trip to Disney, Blue Jays package, flowers) at an average of $1,000 a piece = $200,000. Finally, assume that production of everything including the Automated Thanking Machines was another $200,000 and everything was done for less than $1 million. Coming out of it, they got so many positive mentions in news shows, 200 million views on youtube, and very strong brand messaging around the brand values. Clearly, this was a very effective social media campaign.

The youtube video can be found at:
https://www.youtube.com/watch?v=bUkN7g_bEAI

 And the Forbes article that summarizes key stats can be found here:
http://www.forbes.com/sites/stanphelps/2014/07/30/td-bank-turns-atms-into-an-automated-thanking-machines/

Taking a targeted approach to social media

As branch transaction volume continues to leave the branches, and more customers are willing to bank with an institution that doesn't have branches, regional banks need to identify how they can be successful over the likes of Chase, Bank of America and Wells Fargo.

U.S. Bank provides a good example of how customers can be targeted in order to drive success with a smaller segment. In a recent Forbes article, Kelly Colbert, VP of Social Media, explains that they build creative for "say, our top six audiences." U.S. Bank is the fifth largest retail bank in the country so you can imagine that as you move to smaller institutions, the focus audience should continue to decrease and the overall targeting should increase.

The article (http://www.forbes.com/sites/jasonbloomberg/2015/02/20/building-trust-with-digital-marketing-at-u-s-bank/3/) goes on to talk about the ability to take risks in the digital space because you have a lot more flexibility on the creative. In a recent BuzzFeed post, U.S. Bank used pictures of kittens and puppies to talk about the 10 things homeowners don't ask before buying a house (but should). The goal of the piece was not to directly drive sales - you won't see a call to action - but instead to build a relationship with the customer and build trust.

Social Media in Retail Banking

A recent study of 439 financial institutions reveals that most banks don't believe they are getting strong performance in social media, for the efforts around customer acquisition or engagement.

http://thefinancialbrand.com/49983/2015-bank-credit-union-marketing-trends/

Of the respondents, most said that engagement was the primary reason that they were using Facebook broadly, however, two thirds of the financial institutions said that it was only somewhat effective for them. In looking at respondents opinions on Twitter, LinkedIn, Google+ and Pinterest, respondents are even more suspect of the effectiveness.

These results beg the question of what the role should be for social media in the financial services realm and what sort of investment should be made. There have been good examples of institutions being successful in social media, so the question become how can you effectively leverage social media and what are the ingredients to success?

Citi Launches Digital Marketing Push with Zillow

Citi recently formed a digital marketing relationship with Zillow (and subsequently StreetEasy). The new partnership is a good example of how retail banks can begin to partner with key providers of information for consumers likely to generate value for retail banks. The article for more information is:
http://www.nationalmortgagenews.com/news/origination/citi-launches-digital-marketing-push-with-zillow-1044113-1.html

When you consider that somewhere between 6-10% of consumers are switching checking accounts in a given year, and of that, many are customers that are entering college, graduating college, getting married, having kids or buying a new house (in other words, those with a major life event), the opportunity to advertise with customers very likely to switch accounts or purchase a primarily bank account, is an amazing opportunity to begin a new opportunity.

I would expect many more similar deals to occur over the next 1-2 years as banks are getting much more savvy in targeting consumers likely to switch accounts.

Content Marketing in Financial Services

I recently read an article that stressed the importance of content marketing, even as it relates to financial services. The article (https://econsultancy.com/blog/66066-how-barclays-generates-interest-with-content-marketing/) cited the recent Barclay's programs focused on creating relevant content for important niches in the marketplace. One of the programs is aimed at teaching kids how to code, aimed at young kids and parents that are interested in preparing their children for the future. Another section is focused on starting your own business.

Each of these areas is targeted at an attractive segment of customers, provides relevant content and illustrates the ways the bank is helping them fill their needs. Neither campaign is directly related to banking needs (though starting your own business gets close), however, they are really focused on providing good information to attractive target segments. I think content marketing is an area that banks can really begin to explore much more, particularly for fulfilling particular niches in the marketplace.

Rising Importance of Mobile Marketing in Financial Services

I recently read the following article in the financial brand, speaking to some of the digital strategies that the author believes will be critical in the next year for financial institutions.

http://thefinancialbrand.com/49927/digital-marketing-strategies-for-banks-credit-unions/

The one that I think was the most transformational was the focus on mobile marketing. The logic was very straight-forward, as consumers continue to spend more and more time on their mobile devices, reaching customers in this channel will be even more critical. I think a critical piece of how this then was talked about in the model, is that the mobile touchpoints needs to be a part of a full customer-centric strategy that utilizes digital, traditional, social media and content marketing strategies.

The other interesting component to me was the emphasis on social media marketing. It cited a statistic that social media marketing increased 40% last year and talks about a time where financial marketers will truly be proactive and using social to drive awareness, rather than “just checking the box” with their social media presence. In my experience, at most institutions it really is just checking the box and only at 1-2 have I seen a truly integrated social strategy that can drive this kind of brand-building.

10 Big Trends Reshaping Financial Marketing Today

I ran across the following article in the Financial Brand:

http://thefinancialbrand.com/47646/marketing-trends-in-banking/

The piece that resonated the most with me was the personalization that is now being conducted. The article claims that in 2014, marketing efforts were 10-30% more effective. They claim that this new effectiveness is largely driven by banks experimenting "with mining internal (structured) and external (unstructured) data to create targeted approaches … and it worked." I think this illustrates the power of digital marketing and where the industry more broadly is moving as more and more data can be utilized across all channels.

The article also talks quite a bit about storytelling, which they believe is becoming more popular again. The ad that comes to my mind is the Swiffer commercial that tells the story of an older couple that is cleaning the old-fashioned way and the Swiffer makes that process much easier:
https://www.youtube.com/watch?v=Xw9Bp2AszNw

I think that combining these two elements where be where larger banks, in particular, will need to head. They need to provide prospects with relevant content and stories, that are personalized to them, whereas I feel they have traditionally used a one-size-fits-all model.

Banks Have a Case of Digital Marketing Myopia

Recently, I came across the following article in American Banker:
http://www.americanbanker.com/bankthink/banks-have-a-case-of-digital-marketing-myopia-1069160-1.html


Reading through this article, it’s interesting to hear about some of the places where banks have tried to carry digital marketing goals where it may not be as successful. While I don’t actually agree with some of the segments that are identified where digital marketing may not be as effective, the article does clearly outline how important it is to have a very clear target in mind.

In one of the banks we are working with, they found that the costs of some of the most popular search terms on google were actually more expensive than the value they were deriving from the accounts. As a result, they had to completely refresh their approach to use lower cost terms instead. In the end, they targeted a strategy that targeted customers throughout the funnel, rather than strictly the last step where the search terms were most expensive.

I think many of the banks have just leaped into digital marketing because they believe they should be there, however, they didn’t have a true strategy around it, driving up some of the costs. Additionally, as the article highlights, targeting specific customers can help drive significantly more success, if it can be done cost-effectively. I’m curious to learn more about how to craft the strategies and what tools can be used to monitor and improve effectiveness of campaigns