No doubt you are sick of hearing how “big data” will change bank marketing. As we have said before, it is all about “small data” and how to leverage simple sources of data to boost the bank’s brand and products. The question that most banks have is where do you get this data? Below is a breakdown of common sources of data that can boost your digital marketing efforts. Oddly, missing is credit file information, but we will tackle that another day. In this article, we highlight where and how to leverage some key sources of data that matters.
By far the most commonly leveraged data by function is demographic data such as age, income, gender, marital status, household size (in that order). Much of this data is often culled from a bank’s customer relationship management system (CRM). Unfortunately, since this is the easiest source to access and the most often utilized data source, it is not the most common.
Since many banks don’t have a CRM or central sources of data that they can easily access, leveraging search data such as Google Adwords is the easiest and most common regarding keeping an ongoing program going. At any given point, we run 50 to 150 targeted words that we have set up and let run. Set up takes about 15 minutes and the advertising effortlessly runs in the background with only occasional modification. This is the easiest data to leverage which is why it is the most common.
Below is an example of our click-through trends for just one campaign. You can see our normal spike during the first couple of weeks in January which is one of the most effective times for banks to advertise. This campaign garners some 11k impressions a day with 20% of those being an exact match. Our click-through rate during the first couple weeks in January is about 15% and then drops to a still impressive 8% on average. While you might be able to duplicate the cost of impressions using traditional bank channels like events, print or radio, it is extremely hard to duplicate the click rate.
More important, many of these channels discussed above can be tested, refined and improved over time. That is something you can’t do with events, print or radio. Because of this fact, these channels are not only more effective but more supportable to managers and board members.
Banks can use Google AdWords data to uncover trending topics such as “Tax Reform” or can focus on the basics such as “bank account,” “checking account” or “savings account.” These three are always popular and never fails to drive traffic. In addition, banks can refine campaigns to target and leverage certain demographic areas. For us, as an example, most of the traffic in these key words come directly from our core markets.
Of course, part of the poetry of using search data is the level of granularity that banks can obtain. One often overlooked tactic is to intercept popular search to interject your bank’s name. For example, in Florida, next to generic terms, most households search for “Chase checking,” “Chase business checking,” “Bank of America near me,” “Capital One checking” and “Wells Fargo checking fees.” Here, we can purchase any or all of these terms and roll them into a campaign that will serve an ad that shows the personal touch you get from a community bank. While not that effective in terms of a click rate, what you often get is the new customer that has never heard of you but willing to try your bank for the personal service. What you lose in effectiveness you make up for in profitability as these customers tend to be 20% to 30% more profitable than someone just searching for “free checking.”
While “checking account” may give you the most impressions, it may not give you the highest click rate. For that, banks need to better target the search terms such as “health savings accounts,” “medical checking,” “online checking” (if you have one), “Education savings account,” or “Coverdell ESA.” While these types of accounts don’t get the most volume very few banks purchase these specialty terms, so they are not only inexpensive to execute, but your click-through rate can be north of 50%.
Putting This Into Action
The combination of using CRM and search data provides your bank with the most common, the most effective and the easiest to execute. Sending a well-targeted email to your existing customers is by far the channel with the highest return on investment. Leveraging search can provide your bank with the easiest way to bring in new customers or reach potential customers when you don’t have an email or physical address. The combination of the two channels together represents the basics of modern marketing.
In the coming weeks, we will be discussing how we put psychographic data to use from ad servers, social media, mobile locations, bank transactions and credit card data. We will then show how you can augment that data with third-party data to create highly personalized messages that can micro-target a particular type of customer attempting to solve a clear problem such as estate planning or more effective small business treasury management. These are tactics of the intermediate modern bank marketer and while are more complicated and often more costly, can be extremely profitable.
If you are still confined to print, radio and using social media just to advertise your community involvement, you are missing out on what many banks have been using effectively to jump profitability. Using these techniques you can grab 1031 exchange customers, households moving into your area or businesses looking to change banks before even the largest banks figure out what is going on. The ability to access marketing data such as what we have described above have given community banks a huge advantage against the national banks. These tools are there for the taking; you just have to have the desire to put it into action.
Submitted by Chris Nichols on January 24, 2018