Insights for needed investment in marketing communications by financial services brands
Running parallel to the rising relevance of brand strategy for banking in our COVID environment, marketing has become an indispensable ingredient of any successful brand communications program. Now more than ever, brands that have stayed steady with or actually increased their marketing investment have continued to grow, even during a protracted economic crisis. As the Wall Street Journal’s coverage of the importance of marketing found, companies are using this time of rapidly changing consumer needs to make inroads with new audiences – and to simply stay top-of-mind. As the CMO of Hyundai puts it, “As soon as you go dark, it’s just a hole to climb back out of.”
But what makes marketing work? Three factors are key to effectiveness: Reaching the right audience with the right message at the right moment in their journey. And given the accelerated, on-demand nature of much of our communication, Marketing Insider states that increasingly, time is of the essence: “[B]rands need to get fast with their messaging. Neuroscience research… found that marketers have about two seconds to grab consumers’ focus in digital channels. Two seconds, that’s it.” But just because you have to be fast doesn’t mean you need to simply sell. That’s why having a marketing strategy that considers and coordinates all of your channels, from the brand to the branch, is so critical.
Not only does marketing help brands make meaningful consumer connections, it has measurable impact on bank growth, especially as the branch channel contracts. As Novantas noted in late October: “The challenge for banks in the next 5-10 years is that in a world where branch-centricity declines, banks can’t rely on acquiring customers through the branch that is closest to them. Therefore, marketing and branding increase in their importance.Customers need to know more about the institution than simply a branch is nearby. For most banks, marketing investment will be a key lever…”
Marketing Proof Points
In Reinvesting Resources, we discussed balancing efficiency and investment: “On taking cost out of the branch network, reducing the cost of servicing physical transactions is critical to weather this [COVID] storm. Although as the first step, it’s not reduction or even banishing inefficiency that matters most; it’s redirecting cost savings into investment to grow.” It may have been assumed that the needed reinvestment would be focused exclusively on the branch network, but new data is making the case that resources must also be devoted to brand communications and marketing.
Once first on the chopping block during times of contraction, marketing budgets have demonstrated a direct link to growth, especially in banking. In their Retail Banking Strategy for a Covid-19 World, pwC emphasizes the importance of investing in marketing analytics, stating, “[T]opline growth is strongly tied to marketing spend, and cutting indiscriminately could cede ground to competitors.” Reducing budget for marketing analytics efforts ultimately weakens consumer connections by undercutting a “program that lets you see customer preferences at a detailed level.”
Going even further, the September Retail Banking report by Novantas finds: “While marketing historically has been one of the first places CFOs turn to for budget reductions, most banks have identified that 20% of new-to-bank checking accounts are now driven by marketing.” As more transactions move digital and branch traffic declines, this trend is only expected to increase. That’s why communications is so essential. According to Marketing Communication News:“Getting face to face with customers is still difficult, even as we emerge from lockdown. Communication really needs to plug this gap.”
Communicating with Clarity
Knowing that you must invest in marketing is one thing. Knowing what to say in those marketing messages is something else entirely. In the recent article How to Build Brand Messaging Through Channel Communications, Adrenaline finds: “More than merely deciding which message belongs on which medium, the best brand communicators take the time to understand and use each form of media, so brand messages will substantially resonate.” That means knowing that there is a messaging hierarchy where brand communications sits at the top and other forms of messaging, like marketing, sit below. Laddering up and aligning with the brand, all communications need to be synchronized and harmonized.
In times of tightening budgets, many organizations concentrate communication efforts on marketing messaging distributed via channels most under their control. In the PESO Model, these are the Social and Owned channels, and leveraging these two together has a powerful effect or as The Rise (and rise) of Social Media, states “Realistically, social media has now transformed from a nice-to-have to a critical component of any effective marketing strategy – a Swiss army knife that can help brands connect, promote, and inspire.” With a content-first approach and no intermediary between a brand and their audiences, using social to point to owned channels of content raises awareness and activates audiences.
In financial services, deploying and distributing marketing communications to maximize customer acquisition and cross-sell necessarily relies on powerful, connected analytics – with insights focused on the brand and the branch. The resulting insights drive the Halo Effect, meaning that “[w]hen consumers have good perceptions of a bank brand in their home market at the branch, they will begin to have positive associations of the brand as a whole across numerous channels.” Deeply understanding customers, their needs and behaviors through data-driven insights is key, as is calibrating communications based on that vital knowledge, ultimately empowering financial brands to build resilient, enduring relationships.
Be sure to stay tuned to Believe in Banking as it tracks the big trends – like Connected Intelligence – that are driving the financial services sector forward and influencing the banking experience now and in the future. For more insights on building brand and marketing messages, contact Adrenaline’s experts at firstname.lastname@example.org or (678) 412-6903.