Marketing MantraThe Role of marketing is, like any other bank department, to build shareholder value. However, many find the path from marketing activities to net income muddied. Is there a way to better articulate Marketing's role in the Bank's overall success? One such method is to follow the "share of wallet" mantra. Many banks, including the very largest, want a greater share of the customers' wallet. They want more business with each customer such that the likelihood of customer defection is very low and the customer's profitability very high. That winning combination creates income streams from each customer that, like an annuity, can be quantified and relied upon. Achieving reliable customer retention and earning stream is a great way to improve analysts perception of the bank, get credit for future earnings (due to their reliability, i.e. high probability of occurance) in current pricing). It also makes double digit earnings growth more doable, since a certain portion of the growth is already "baked in" through existing customers' additional business. The road to share of wallet has several stops along the way. The first step to achieving that elusive goal is to get "share of mind". Share of mind means being included in the customers' thought process when they consider purchasing a product that the bank is selling. Executives balk at the concept, since there is no apparent correlation between share of mind and share of wallet. But, in fact, there is such a connection. First, if customers do not know about you and your product line, they cannot buy from you. They need basic information to even consider you in their buying decision: 1. Know who you are. 2. Know what you sell. The purpose of achieving "share of mind" is to overcome the first hurdle in sales: customer awareness. As many banks will attest, customers often aren't even aware of their existence. But, more painfully, oftentimes customers know of the bank's presence, but do not realize that the bank sells the desired product. This has happened to many a thrift that converted, either by charter or by product line, into a commercial bank. It is also happening to many banks that are expanding into the investment and insurance business. Those aren't typically connected in the customers' mind to the traditional bank product line, and hence are omitted from the customers' thought process as they contemplate such purchases. Building share of mind is a frustrating process. It requires significant dollars, since most media expenditures are very costly. It is even more frustrating because smaller banks end up paying for audiences they do not serve, thereby wasting their media dollars. Finding an efficient way to build share of mind is one acid test to the effectiveness of your marketing department. Anyone can flood the marketplace with image advertising and achieve fame (and customer awareness). It is a much tougher challenge to do so economically, and especially among the target customer segments you wish to attract. Once share of mind is achieved, i.e. customers know your bank's name and realize that you serve their community, it needs to be expanded to incorporate the full product suite you offer. This is an additional challenge that often requires effort beyond marketing, such as retail and commercial sales force education and internally managed sales campaigns. Your people need to educate your customers as to the entire product offering, and it can be challenging, since many of your own employees do not use the less traditional bank products you offer, and therefore are less comfortable describing and selling them. Effective sales management and clear focus can address these and other issues. Beyond share of mind, however, there is share of heart. It is not enough for your customers to know you and your products and services. In order to build share of wallet, they need to trust you, like and respect your bank. Do your customers associate your bank with positive feelings? Do they believe you'll do the right thing by them? This is share of heart, and building it is the key to sustainable customer retention and repurchase decisions. Consider how effective your customer handling in the field, coupled with marketing activities, are in achieving trust and a sense of care. It seems that most banks' marketing activities stop at information, and fall short of the realm of feelings. Yet, in so many other businesses, it is all about the feeling the product invokes, much more so than about reliability, product features and functionality. This is especially true with cars. Notice car commercials, and you'll see that while performance is important, the differentiation occurs mostly at the emotional levels: how do you FEEL when you drive this car? How does this car make you feel? The jaguar commercials and image campaigns are a particularly good example of that. Banks and their marketing departments need to figure out how to build the emotional link between the company and its customers. Developing trust, reliability and other good feelings can make all the difference the next time your customer is looking for a financial product. They will put you first in line if the feeling is right. Building share of mind is a necessary but not sufficient condition in effective marketing and execution of a customer relationship building strategy. Share of heart must accompany the share of mind if true share of wallet is to be achieved. Measuring your marketing department's performance along these two dimensions is a first step toward achieving this goal. |