Marketing directors of smaller banks face many disadvantages when competing with local offices of national institutions. For one thing, when there's any kind of change that affects banks - economic, regulatory, or legal - the press automatically calls megabanks for comment. Journalists totally overlook smaller institutions whose officers may have more knowledge or could provide keen insight.

Sometimes it seems that all the big banks have to do is sneeze to generate front-page coverage. A few months ago, First National Bank of Chicago's decision to open a few offices on Sunday became the lead story on the business pages even though a financial institution one hundredth its size opened a seven-day-aweek office 12 years previously with little fanfare.

Ripe for the Picking

The deck may seem stacked - the playing field uneven - in the war against megabanks but the truth is: Big banks are ripe for the picking. The threat of huge national chains gobbling up all the community banks is paranoia. Those wanting to cash out will be able to find wealthy suitors. but smaller banks with a will to win and an itch to compete will have no trouble holding and even expanding their ground.

Megafinancials may seem like huge, impervious hulks, but viewed from a marketing perspective, they become masses of Swiss cheese - riddled with holes and ready for exploitation. Design the right strategy, and even the smallest institution can thrive.

Seek Out Weaknesses

Assess the opposition candidly and you'll find underlying vulnerabilities:

* Like the ocean liner that takes five miles to change course, megafinancials are slow to change. That means they can't react as fast as you. They can't respond to market changes or introduce products as quickly as smaller institutions.

* Because of their huge structure, numerous offices, and quantity of personnel, big banks must operate by a uniform code of conduct. Consequently, there's little room for customer exceptions or employee discretion.

* Employee turnover through transfers, advancement, resignation, and dismissal is higher among large banks. Customers can't develop personal relationships easily or foster a network of service providers.

* Mega-institutions suffer - justly or not - from negative customer perceptions. Large, impersonal, cold, intimidating, big-business-oriented are a few of the labels frequently attached to large institutions. It's difficult for even the hardest-working big bank to overcome these perceptions.

The Mongoose Approach

The objective in designing an anti-big-bank strategy is to identify niches where large banks can't compete. It's a similar strategy to that employed by the mongoose in its fight with the deadly cobra. Although the cobra is large and poisonous, the smaller mongoose is fast, cunning, and patient.

The mongoose waits until the snake lunges for the smaller animal, then the mongoose attacks the exposed throat and kills his prey. I'm not suggesting, big banks are akin to cobras, nor that we should aim for their jugular, but the essence of an anti-big-bank strategy is to strike when and where they are most vulnerable.

Any of the vulnerabilities identified above are sufficient to become the comerstone of a powerful, anti-big-bank strategy. In tandem, they become a massive counterpunch to even the most formidable opponent.

There are hundreds, if not thousands, of ways to take advantage of large bank vulnerabilities. the first step, however, is to follow a process which will help identify the specific weaknesses of megacompetitors. Next, we can seek opportunities to exploit those weaknesses.

First, begin the information-gathering stage, which can be expanded or reduced based on budget and market conditions.

Start to map out a strategy. Use your perception survey to help determine which vulnerabilities are most important to customers and prospects, and therefore which you should target first. Identify "holes" in your opponent's mix of products, which products fill those "holes," and what new products should be developed.

Build marketing campaigns around key vulnerabilities. Don't flit from one weakness to another - it will dilute your message. Develop a campaign that achieves your corporate objectives yet emphasizes either pointedly or subtly the competitor's weaknesses. Focus on two or three weakness-es and reinforce them through a consistent campaign in all media - advertising, newsletters, point of sale, direct mail, and internal brochures.

Before launching a media assault, decide the personality you want your bank to convey. Consumers often choose products - and banks - on the basis of how the purchase reflects on the consumer.

Is the soda pop consumed by youthful, fun-loving people (Pepsi)? Or older, more traditional pop drinkers (Coke)? Will the car say I've arrived financially (Mercedes) or I'm scrambling up the ladder (Saab)) Your bank's personality will be determined by your target market and it will shape the tone of your marketing campaign.

On several occasions, I've used a series of comparative ads to demonstrate the relative attractiveness of a client's products versus the competition. The approach of naming competitors invariably brings customers - but also criticism from the offended bank.

While the approach was aggressive and not for all banks, our task was to position the client as a smart, spunky, high-energy institution that was responsive to customer needs. The positioning further contrasted them to the massive, slow-moving monoliths who were our competitors.

We took a different approach with another client. A continuing objective had been to emphasize the local orientation of the institution in pointed contrast to the local branch of an out-of-town bank.

Where the national bank resorted to broad-based marketing campaigns. we developed a series of community events reflecting demographics of the marketplace.

In a blue-collar, urban neighborhood we conducted a "career bank" program to help area residents find employment. In an upscale, suburban community we designed promotional events to raise money for a popular local charity. In an older, middleclass community, we offered a series of programs that appealed to veterans of foreign wars.

The Winning Plan

Here are a few tips for developing a winning megabank strategy.

* Maximize your marketing budget by using imaginative programs and a strong public relations efforts. The free press can compensate for a limited budget by turning a creative idea into a national event.

* Conduct a marketing audit of your big-name competitor. Compare your products, services, and hours with theirs. Construct a grid and determine the type of customer you judge they, are seeking to reach with each account.

* Once a year or perhaps every two years, conduct a perception study of the marketplace. (Preferably by telephone because it's faster and you'll get a higher response).

Once you've collected the information, summarize it into a list of megabank vulnerabilities under manageable headings such as products, perceptions. service, fees, target markets. Your list, which will likely total a few dozen statements, may include comments such as: customers exhibit little loyalty, high bounced-check fees, no low-end checking product, targets small business owners.

* Chart your own course: Don't respond to the competition. If you see an opportunity, take advantage of the situation but don't change your plans whenever the big bank launches a new campaign. A good strategy needs time to pay off.

* Don't give money: Give volunteers. One employee working on a community project demonstrates far more commitment to the community than a check. You can't match their money; they'll have a hard time matching your involvement.

* Feature photographs of employees in newsletters and advertisements. Use first-person testimonials whenever possible to stress the friendliness of your institution.

* Save your marketing budget until you can afford to make a splash. It's better to run three or four strong advertising campaigns a year than eke out those funds throughout the year and produce no impact.

Take Heart

Don't become disheartened. Even the mighty fall. Sears, GM, and IBM have slipped off their pedestals in the last few years.

Financial World magazine recently named Marlboro as having the highest value of any customer brand in the world. Although considered impregnable to competition, small, no-name discount cigarettes took such a toll on Marlboro's market share that the cigarette manufacturer slashed prices 40 cents a pack to regain its position. The move shocked Wall Street sufficiently to trigger a 68-point fall in the stock market the day the cut was announced.

Analyze the competition, develop a strategy, implement it carefully. That's the approach for tackling an opponent of any size.

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