LAS VEGAS — Small banks would attract more young customers if they embraced social media and got more creative in their advertising, according to bankers who have turned to more daring marketing.

Community banks often suffer from lackluster branding and sporadic social media use. But they can rejuvenate their images by employing a sense of humor, improving customer service online or even starting a charity campaigns, panelists said during a Wednesday session at the Independent Community Bankers of America's national convention.

"Be very critical about the quality of your online banking presence," said Claudia Swendseid, a senior vice president with the Federal Reserve Bank of Minneapolis, adding that a lot of banks' websites are "really boring."

About 87% of people between 18 and 29 use social networking sites and 61% bank online, according to materials from a session called "Developing & Marketing Products Aimed at the Younger Generation." The research came from the Pew Internet & American Life Project.

Among those ages 30 to 49, 68% use social networking sites and 68% bank online. These percentages are lower for adults older than 50.

In contrast, only 30% of community banks use social media such as Facebook or Twitter, while 60% provide customer account alerts by email, according to a 2012 ICBA technology survey. One in eight consumers who use social media have used those outlets to contact their financial institutions for a service matter, but only 20% received a response, according to JD Power data included in session materials.

Improved use of social media can benefit a bank's bottom line and can complement other rebranding efforts, panelists said.

Bank of Ann Arbor in Michigan attributes some of its record profits and asset growth to its adoption of a new branding campaign, said Rhonda Foxworth, the bank's marketing manager. The $890 million-asset bank's rebranding effort energized its staff, community and customers. Recent radio and billboard ads have been targeting customers between 30 and 50, she said.

In 2006, the bank, a unit of Arbor Bancorp, adopted the slogan "Bank of Ann Arbor helps" and began using a friendly Granny apple green in its logo and marketing materials. The bank has since updated the campaign to focus on how it provides security, Foxworth said.

MainStreet Bank in Fairfax, Va., produces entertaining and educational videos to appeal to a younger clientele, said Billy Freesmeier, the $271 million-asset bank's media development specialist. MainStreet also formed "aircharity," a Web portal that allows nonprofits to collect donations. Customers can promote causes and direct donations to their aircharity accounts through social media and other online sources, Freesmeier said. MainStreet promotes aircharity with the tagline "Go Fund Yourself."

Aircharity also played a role collecting donations in the aftermath of Hurricane Sandy.

"You have to be memorable," Freesmeier said. "Otherwise, you are forgettable."

Panelists warned bankers to watch for pitfalls as they develop a social media strategy. Employees must support the branding effort and understand it. Banks must also ensure that they respond to customer complaints. If a customer gets belligerent online, the bank should try to take the discussion offline and resolve the issue.

"Negative feedback is going to happen," Freesmeier said. "We try to respond very quickly."

A sense of humor also helps, panelists said. Bank of Ann Arbor's campaign uses inside jokes with locals to imply that other banks lack knowledge of the community. One billboard observes that "non-local bankers think the Celtic Festival honors Larry Bird." (The Celtic Festival is a popular summertime event in a small town near Ann Arbor.)

Such ads focus on branding instead of pitching a specific product, Foxworth said. The campaign has allowed the bank to engage with customers through social media. The bank solicited submissions through Facebook, eventually selecting nine, Foxworth said.

Bank of Ann Arbor has also found ways to place playful messages on everyday items. For example, bottles of hand sanitizer in the bank have labels that match the bank's Granny Apple green and include messages like "helpful, germ-free banking."

"Those little touches add to the climate and … even appeal to the younger audience," Foxworth said.

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