In the years following the 2009 recession, community banks were able to find their footing, improving loan health and reducing unprofitable operations. But despite these gains, core deposit growth has stalled, particularly for banks with assets under $10 billion, which has limited their lending potential.
In a survey conducted in 2019, nearly one-third of community bankers cited growing core deposits or managing funding costs as top concerns. This challenge has intensified as the pandemic accelerated the shift away from physical branch banking, hinting at a future where in-person banking might play a reduced role in deposit growth.
Inflation further complicates the landscape, with consumers spending more and saving less, also impacting deposit levels. Now, more than ever, community banks must be able to effectively communicate their value proposition, offer smart financial solutions, and craft smart marketing strategies to attract and retain depositors.
Adapting to the Shifting Trends of Today’s Consumer
The banking sector has faced a massive shift since the 2009 financial downturn. Approximately 6% of banks closed in the aftermath. Cut to today, and forecasts suggest a looming closure of 20% more branches in the near future. Big yikes. This trend signals a transformative period for retail branches as they begin to grapple with a reduced role in market expansion, especially when it comes to day-to-day transactions.
The move toward digital banking is undeniable. A significant number of consumers have already transitioned to online platforms and rarely step into physical bank branches. This issue is compounded by the stark contrast in brand awareness. National banks, with their seemingly endless marketing budgets, have achieved widespread recognition, while community banks and credit unions lag behind, typically achieving only half the brand visibility of their larger counterparts. This disparity is critical, as consumers tend to lean heavily toward brands they recognize when selecting checking accounts.
However, for community banks and credit unions, this evolving scenario is not just a challenge but also an opportunity to redefine customer engagement and solidify a unique brand identity. In the face of these changing banking behaviors, local financial institutions must embrace innovative strategies to foster deposit growth and build a resilient, recognizable brand in a digital-first banking environment.
Harnessing Insights
Strategic marketing is the cornerstone of growth in community banking. The ability to deeply understand your customer base is a driving force behind deposit growth. Community banks and credit unions must access and understand local market trends, customer behaviors, and community dynamics to tailor their marketing efforts effectively. This entails a solid analysis of market data, customer feedback, and the competitive landscape to identify unique value propositions (USPs) that resonate with the local communities they serve. Being able to harness these insights can also create a significant advantage over larger financial institutions and fintechs that may overlook these important local data points.
The Great (Financial) Commandment: Know Thy Customers
The essence of successful banking marketing lies in knowing your customers intimately. Analyzing your top-performing customer segments provides invaluable insights into what attracts them to your bank. This data forms the bedrock for developing detailed customer personas to effectively guide the creation of targeted marketing strategies. Conducting a thorough customer analysis involves:
- Gathering and analyzing customer feedback and transaction data.
- Identifying patterns and preferences within your customer base.
- Segmenting customers based on their banking behaviors and needs.
- Utilizing predictive analytics to identify future customer product preferences and needs.
- Tailoring marketing messages to align with the identified customer personas.
Competitive Rates Meet Exceptional Service
A symbiotic relationship between competitive rates and exceptional service forms the backbone of a financial institution’s appeal. While attractive rates draw customers in, it’s the quality of service that cements their loyalty. Marketing campaigns and programs should, therefore, showcase not just the financial benefits or incentives, but also the superior customer service that distinguishes your bank or credit union from competitors. This dual approach not only attracts new customers but also fosters long-term loyalty.
Community First – Banking That Cares
Community banks and credit unions thrive on their integral role within the local ecosystem. Strategies that embed your institution into the community fabric, like sponsoring local events and supporting regional causes, not only enhance brand visibility but also build trust and credibility. Successful community engagement initiatives that have translated into tangible deposit growth highlight the bank’s commitment to and impact on the local community.
Partnerships with local businesses can also be a game-changer, extending the bank’s reach and bolstering its reputation. Co-marketing efforts and collaborations with local enterprises serve as a testament to the financial institution’s commitment to regional economic growth and can lead to mutually beneficial outcomes. Highlighting examples of successful partnerships can inspire similar collaborative efforts and enhance community-centric branding.
Tailoring the Message
Precision marketing is the art of tailoring marketing messages through strategic segmentation that ensures that communications are not only received but also able to resonate on a personal level with each customer. This tailored approach significantly boosts the likelihood of conversion, thereby enhancing deposit growth.
Analyzing to Segment
Get your hands on and dive deep into your customer data to discern distinct segments. This analysis should illuminate the diverse needs, preferences, and behaviors within your existing customer base, allowing for more targeted and effective marketing strategies to prospects as well as upsell opportunities to existing customers.
Customized Content Creation
Leverage the insights gained from data analyses to craft content and offers that speak directly to each segment’s unique wants and needs. This could mean developing specific financial products, services, or educational content that aligns with the segmented needs identified.
Performance Tracking and Optimization
The work doesn’t stop at deployment or distribution. You must be willing to continuously monitor the performance of these targeted campaigns to gauge their effectiveness. Analyzing metrics such as engagement rates, conversion rates, and overall ROI will provide valuable feedback that can be used to tweak and improve future marketing initiatives, ensuring they remain aligned with customer expectations and market dynamics.
Digital Outreach for Local Impact
If you still think local SEO or digital outreach are just buzzwords – it’s time to come back to earth. Local SEO and digital outreach are essential components of your marketing arsenal. To make a local impact, your bank or credit union needs a multifaceted digital strategy that leverages the nuances of local SEO, including local map listings, city-specific content, business review sites, and robust content marketing. Each of these elements plays a critical role in enhancing your bank’s local presence and visibility.
Local SEO
Start with optimizing your institution’s local map listings on platforms like Google My Business and Bing Places. This ensures your bank appears in local search results and map services, crucial for customers searching for banking services in their area. Next, develop city-specific content that addresses local financial needs and highlights community involvement, enhancing local relevance and engagement.
An important, but often overlooked, part of local SEO strategy is managing and collecting reviews. Positive customer reviews can significantly boost your local search rankings and build trust. You should be encouraging satisfied customers to leave reviews and engaging constructively with the feedback received. This not only demonstrates your commitment to customer satisfaction but also allows you to leverage the authentic voices of your customers to attract new business.
Use Diverse Marketing Channels
Reach your audience segments effectively by using multiple marketing channels. Tailored messaging across these channels ensures that your bank’s unique value propositions are communicated clearly and consistently, catering to the specific needs of each customer segment.
Paid Search and Geotargeting
Implement paid search campaigns to target people searching for financial services on platforms like Google AdWords and Bing Ads. Bing, in particular, can be a great resource for reaching an older demographic that often prefers community banks or credit unions. Use geotargeting in your paid search campaigns to precisely target customers in specific locations, ensuring your marketing efforts are focused where they will have the most impact.
Social Advertising
Harness the power of social media platforms to run targeted advertising campaigns. By using demographic and psycholinguistic data from your customer segments, your bank or credit union can create social ads that resonate deeply with each group’s preferences and behaviors, further solidifying your bank’s presence in the local digital landscape.
Capturing the Next Generation
Gen Z is stepping onto the financial stage, bringing with them a new set of behaviors and expectations that are reshaping the banking industry. As digital natives, they prioritize online and mobile banking, viewing these platforms as essential tools for managing their finances. With Gen Z expected to comprise 27% of the global population and control up to $33 trillion in assets by 2025, their influence is both significant and expanding. Their notable brand loyalty suggests that financial institutions that earn their trust now can secure long-term customer relationships. Understanding and adapting to Gen Z’s unique needs and preferences is not just beneficial but also crucial for banks aiming to thrive in the evolving financial landscape.
Optimize Digital Banking Experiences
Since 40% of Gen Z favors online banking, ensuring a seamless, intuitive digital experience should be a priority. Banks and credit unions should focus on developing user friendly mobile apps and online platforms that offer a comprehensive range of services, from everyday transactions to financial planning tools.
Leverage Social Media and Influencer Collaborations
With a strong preference for digital communication, engaging Gen Z through social media platforms is essential. Collaborating with influencers who resonate with this demographic can amplify your reach and relevance, effectively building brand recognition and loyalty.
Offer Financial Literacy and Empowerment
To address Gen Z’s concerns about education affordability, debt management, and savings, your bank or credit union should provide targeted financial education programs. These initiatives can help demystify financial processes and empower Gen Z customers to make informed decisions.
Promote Transparency and Social Responsibility
Gen Z values authenticity and social responsibility. Banks and credit unions that transparently communicate their values, particularly around ethical practices and community involvement, can foster deeper connections with this demographic.
Crafting a Cohesive Strategy for Growth
Ultimately, the success of your community bank or credit union hinges on crafting a well-rounded marketing strategy that caters to diverse customer segments. This strategy is pivotal for expanding your deposit base and holding your ground against local competitors, big banks, and fintechs alike. By providing tailored solutions that resonate with different customer needs, you can not only maintain a competitive edge but also reinforce your status as a trusted local financial institution.
Your Partner in Growth
If you’ve read this far, you’ve probably realized that executing these strategies and tactics is no small feat for any one team. It starts with deeply understanding your audiences, then moves into a cycle of testing, learning, and refining. It’s a significant journey, but you don’t have to go at it alone. At TLG, we’re here to help — from audience analysis and defining your strategy and go-to-market plan, to helping your bank to test, learn, and grow. With our expertise, we can help share the burden and the reward, turning challenges into opportunities and strategies into results. Let’s work together to make your marketing efforts successful and impactful.
