Why Marketing Analytics Show That Banks Need To Get Ready For January

Bank Marketing Analytics

Hopefully, your bank has pulled all your advertising and major marketing campaigns around products for the months of November and December as those two months are the most ineffective to promote bank products. Not only are people and businesses distracted during those times, but banks have to compete against a barrage of other advertising and marketing messages from retailers. Given higher advertising prices and lower response rates, December and November, respectively, are the two worst months for marketing return on investment. If you don’t keep the data, you would at least know this as we published this back in 2013 (Here). Now, we update our data to get you the latest so your bank can be more effective.  

 

The January Effect

 

Back in 2013, to many bank’s surprise, we highlighted the fact that the first two weeks in January were excellent times to market and convert customers, as both inquiries and account openings were strong. Since we published that blog, we have looked at Google search engine data for the last 10 years and find two material trends that banks can take advantage of.

 

The first is that the “January Effect” is alive and well. The first five weeks of the year is a time when many households and business start to execute on their new year’s resolutions in getting their financial house in order. Bank switching is at its high, as is new account opening for things like 401(k)s, 529 college savings plans, health savings accounts, checking and savings. 

 

Bank Marketing Data

 

The Digital Effect

 

The second interesting aspect that the data shows is that the January Effect is more pronounced than as it has been in past years. This is due to two aspects. One is that with the rise of mobile, we find more customers doing research on both banks and products on their phones. This is more than just cannibalization of desktop search, but an expansion of research by both consumers and businesses. The other driver of the digital January Effect is the fact that with more banks having online account opening capabilities weather becomes less of a factor.  Thus, when a potential customer does his or her research online they can now shorten the conversion time cycle and go right to the bank of choice and open an account online. Weather, it now seems, presents less friction.

 

To that point, 2015 marks the first year that “online” appears in the top five search terms in most every major category. Thus, not only do potential customers want to research savings or checking accounts, but they are now specifically looking for “online savings accounts” and moving directly to opening them online. This has served to amplify the January Effect.

 

Other Actionable Takeaways from the Data

 

In addition to the above, here are 10 other items from the 10 years’ worth of data that we have collected that every bank manager and marketer should know:

 

  1. Next to November and December, the post-tax time period between mid-April through mid-June is the next worst time to market deposit products.
  2. Retail customers are very sensitive (and responsive) to anything having to do with retirement in January.
  3. Marketing health savings accounts (HSA) is generally a bank’s best marketing return on investment. Not only are customers responsive, but few banks do it, so you stand out. If you are going to market your HSA, it is best to market in February to new customers and October for existing customers (reminding them of the account and how to use it).
  4. It is 26% more effective to market a checking account than it is a savings account.
  5. It is 20% more effective to market a savings account over a money market account.
  6. It is 50% more effective to market a money market account over a certificate of deposit (CD).
  7. Unless you are marketing on rate, CDs are one of the worst marketing investments you can make of any major deposit account category.
  8. Customers are very responsive to any account that is “free” and any type of rate promotion.
  9. Chase, Wells Fargo, Citibank, PNC, SunTrust and Ally (in that order) have the most effective deposit marketing.
  10. USAA does the best of any community bank when it comes to deposit account marketing

 

 Putting the Data into Action

 

It is important to remember that the above is an aggregation of data from across the US and that marketing responsiveness varies by customer base and geography. This is why it is important for every bank to experiment, record and analyze the data in order to improve their return. In general, banks can make better use of their marketing efforts by frontloading their budget during the first quarter of the year and then going dark through the “red times” highlighted on the chart. Marketing specific products like health savings accounts, free checking, interest checking, business checking and any account that you can open online (if you have the capabilities) is usually your best deposit account marketing return on investment.

 

Stay tuned over the next couple weeks, as we will be looking at marketing mortgage, commercial loan and fee lines of business. Until then, we will offer one more major insight to ponder – marketing ROI and interest rate movement are positively correlated. That is, when rates rise, consumers and businesses are more responsive to deposit account marketing. Given that the Fed is likely to move rates for the first time in seven years this month, January could be the best time in more than a decade to market your deposit products.  You should get your campaigns ready.