You don’t normally associate communist-oriented banks with innovation, but we need to give credit where credit is due. Russia’s largest, and state-owned bank, Sberbank, has hit on a fantastic idea (originated by the marketing firm GOOD Moscow) that they have been executing for the past year. We wanted to explore this for our market and thought the tactic would be good for more marketing savvy community banks. In this article, we look at this innovative tactic and show what it would take to pull it off.
The bank partners with leasing agents and building owners that have vacant space and provides colorful window adhesive coverings for their vacate storefronts (below).
In the bottom left of the storefront, the Bank asks “What do we need here?” and then implores the community to vote at a bank website giving a code that ties to the site. In each color block around the store, the bank proposes a set of ideas such as: “Another fast food outlet?”; “A kid-friendly café?”; “A pet-store?”; “Yoga Studio?”; “Pharmacy?”; and similar.
The bank then uses the online feedback and approaches a set of current and prospective suitable commercial customers letting them know about the available space, providing leasing terms, providing an offer for banking services and giving the business data on the level of community support. The Bank then connects the business with the agent if they are interested in potentially leasing the space.
The Bank supplements the storefront campaign with billboards and geo-targeted online ads that helps to further drive visibility and engagement.
Instead of the look of a vacant space that maybe has some drab paper covering, the community gets a clean and colorful storefront that creates energy and attracts eyeballs. Since everyone is sensitive to businesses in their neighborhood, engagement runs high as there is a sense of influence.
The bank is able to crowdsource valuable information that helps reduce credit risk by leveraging near-real-time data of what the community wants. Traffic is driven to the bank’s web and mobile sites helping to promote the brand of the bank. The bank then has extremely valuable data to leverage to go after the small business customer.
The leasing agents or owners of the space are happy as they not only get more visibility and leads but get more businesses that are likely to enter into longer-term leases.
The campaign is said to generate response rates at nine times the level of traditional advertising and a conversion rate of three times greater compared to other loan promotions. From a return on investment standpoint, the all-in net effort is 30% better than traditional campaigns. The campaign has been so successful and effective that Sberbank is now collaborating with major real estate developers opening up an even larger and more profitable customer base. Together, the bank and developers look to lower their respective risks while creating a more effective community plan.
Partnership? Our Twist and Capabilities
We also see this tactic working for commercial real estate as well as to drive C&I loans. A similar campaign could be launched to help support retail development, multifamily, mixed-use, professional offices and specialty real estate.
This is an excellent example of how using a little creativity, banks can overcome the big challenge of creating value for their community, value for their customers and profit for their shareholders. Any bank that complains about not having enough resources we would argue is not being creative enough. This effort cost relatively little by provides a huge return.
By tapping into micro-targeted insights for the good of the community, Sberbank drives engagement and leverages data to boost loan growth all the while revitalizing their communities that they serve.
Submitted by Chris Nichols on May 30, 2018