As banks and financial institutions begin to shift out of the most recent financial crisis, it is critical they remain competitive to maintain current clients and more importantly develop new clients. Almost daily we hear about new marketing plans by large retail and restaurant chains and the automotive industry; never do we hear from companies about their new marketing in the financial sector. It is critical for companies such as Bank of America, GE Capital, and other banks and financial institutions to increase their marketing to obtain market share for both their retail and commercial operations. Banks and financial institutions must understand who their largest current and future audiences are. Further, they must develop strategies focused on attracting and retaining these target markets.
Bank & Financial Institution Marketing
Andrew Needham and Philip McNaughton once said, “Consumers' desire to be listened to and involved more directly in what a brand does and says means that now, more than ever, there is a great opportunity to market with consumers rather than at them.” In order for any company to set themselves apart they are in need of a marketing team which knows who their client is and how to reach them. This is true for a company like McDonald’s and even more important for banks and financial institutions. Banks have large marketing budgets, but they are not spending it in the manner that brings them the same amount of exposure. It is true banks are not as fun or as sexy as the new Camaro, however, they account for a significant portion of the US GDP and all consumers interact with banks on a weekly basis. “As the world emerges from the global financial crisis, banks find themselves in a challenging environment. Low interest rates are making it difficult to generate revenue in traditional ways, while raising capital and reducing risk have become the new priorities (Farah, Macaulay & Ericsson).” Marketing is key to making this change.
“Just do it” (Nike), “Diamonds are Forever” (DeBeers), “They’re G-r-r-r-eat” (Frosted Flakes); these are three of the top 20 marketing slogans of all time ("The top 20," 2011). Only one Financial Institution made this prestigious list, American Express. “Don’t Leave Home Without It”- The history of this campaign began in, “1975 when American Express first advised to consumers that they shouldn't leave home without their AMEX card. These slogans attempted to establish American Express as the top provider of traveler's checks and cards that could be used in every-day life. American Express also used celebrity endorsements to help cement this phrase into the minds of consumers. The first commercials featured Academy Award winner Karl Malden. Other celebrities that provided endorsements, over the years, included Stephen King and Jerry Seinfeld. (Investopedia)” Almost 40 years later, we have not had a marketing campaign from a bank or financial institution that has been as prevalent as American Express.
Banks, in a broad sense, target two types of clients- consumer and commercial. These clients are served via a retail branch, online, and direct sales from bankers. Consumers are typically interacting with the banks through the following services:
i. Savings Account- A deposit account held at a bank or other financial institution that provides principal security and a modest interest rate. (Investopedia) ii. Checking Account- A transactional deposit account held at a financial institution that allows for withdrawals and deposits. Money held in a checking account is very liquid, and can be withdrawn using checks, automated cash machines and electronic debits, among other methods. (Investopedia) iii. Mortgage- A debt instrument that is secured by the collateral of specified real estate property and that the borrower is obliged to pay back with a predetermined set of payments. (Investopedia) iv. Loans (Home Equity, Auto)- The act of giving money, property or