Marketing, a function that has had its ups and downs in banking, is back on a roll.

Increasingly depended upon for the strategic insights banks need to contend with ever more powerful competition, marketers are gaining in organizational stature - and getting the budgets they feel they need to wage those battles.

Their heightened morale was palpable last week in Orlando at the Bank Marketing Association's main event of the year, a meeting known as the BMA annual marketing forum.

Just a few years ago, the conference was floundering along with its constituents, then often viewed more as staff overhead than as profit contributors.

From outward appearances, the trade group is not what it was in the 1970s and 1980s, before its affiliation with the American Bankers Association, when as many as 2,000 people attended the annual conventions. Richard M. Rosenberg, who went on to become BankAmerica Corp. chairman, was one of several impressive names among the association's leadership.

But judging from the energy and excitement in Orlando, bank marketing is back in top managements' good graces, and may have attained a level of strategic importance it never had in the Rosenberg era.


Just in case they needed reinforcement, the more than 400 people in attendance last week heard their sense of importance underscored by speaker after speaker. It was an impressive lineup, including several bank chief executive officers, the high-tech celebrity Scott Cook, and the influential securities analyst Thomas Brown.

"The leadership for great changes comes not from technologists, but from business people who are close to their customers ... like the people in this room," said Mr. Cook, chairman of the software company Intuit Inc.

"Marketers are the key to where banking is going," said Robert Hall, chief executive officer of Action Systems Inc., who promotes the idea of "market competence" and, when implemented, "taking it to the streets.

"The heads of marketing and their teams are the very best group to champion this cause to CEOs," Mr. Hall said, "many of whom don't understand this new age of marketing."

"I'm very positive about marketing, and the impact it can have on bank returns," said Mr. Brown, the senior banking analyst at Donaldson, Lufkin & Jenrette Securities Corp. in New York. "I've gone into many of your companies and said the head of marketing deserves a raise.

"The future of banking is marketing.".


Mr. Brown and Mr. Hall are kindred spirits, having spent time together discussing data base marketing and the potential dividends of detailed analysis of customer and market data. Both are ardent supporters of data- mining techniques and are critical not just of banks that fail to use them, but of bankers who think they are more effective than they are.

In a survey of 49 major banking companies this year, Dallas-based Action Systems found bankers not doing what they were saying: 86% said market segmentation is important or very important to their strategy, but only 45% have branch managers developing plans based on their local market conditions. Also, 79% were setting goals for product sales, rather than for the customer profitability measures that most experts now view as far more revealing and important.

Mr. Hall warned that unless banks develop the necessary skills and fix those "disconnects," CEOs will face tough questions from stockholders about why their heavy investments in data base technology did not create value.

Mr. Brown, who has been complimentary of information-focused companies like Citicorp, Norwest Corp., and Capital One Financial Corp., said it is not enough to have a strategy and technology: "What is missing is front- line competence - that's what we're not investing enough in."

The analyst said it is ironic that as many banks invest in sophisticated data bases, they are centralizing functions that should be distributed out to customer contact points.

"Today's information technology makes possible a return to a community banking-type relationship," Mr. Brown said.

The solutions, Mr. Hall and Mr. Brown agreed, lie in "continuous learning loops" within organizations. These involve the sharing of information up and down the organization and across job functions, in ways that traditional hierarchies did not allow. At the core of those processes is the marketing discipline.

"You may end up, if not the owner, then the driver" of the market competence process, Mr. Hall told the BMA audience. "If market competence were software, it wouldn't run in most organizations today."


While there may still be work to be done, there was plenty of testimony from the banking front lines about how far marketing has come.

Faye Cannon, the Bank Marketing Association's president, is president and CEO of Farmers and Mechanics Bank of Frederick, Md. - itself an indication of marketing's importance and credibility.

Ms. Cannon said marketers, once mere coordinators of advertising, have come to be "recognized and valued" as "drivers of the organization to peak performance ... We have become part of executive management teams, with responsibility and accountability."

Participating on a panel of community bank CEOs, Douglas Myers, president of Plano (Tex.) Bank and Trust Co., said marketing and sales are critical to virtually all income-growth strategies, and are key components in delivering the customer service levels that can help reduce expenses.

Galen T. Pate, chairman of Signal Bank in Eagan, Minn., said he depends on marketing to make an impact in a region - and in advertising media - dominated by superregionals.

"We have to practice guerrilla warfare, strike fast and make an impact," Mr. Pate said. He quoted from the management guru Peter Drucker, saying marketing is not "a separate function (but is) a central dimension of the entire business."

Pouring a bit of cold water on Ms. Cannon's statement that "marketing can be a driving force," Robert J. Meuleman, president of Amcore Financial Inc. in Rockford, Ill., said he was not ready to let marketers "own the bank."

But he also said, "If I'm not going to sell the company, I need your help."


The Bank Marketing Association's annual advertising awards went to 63 entries, 16 of which earned "best of the best" designations.

Though there is no equivalent of "best picture," the big winner may have been Glendale Federal Bank of Los Angeles. It got "best of the best" for both television and radio series that tweaked its California commercial bank rivals with lines like "we don't think customer service is something you should pay for," "come to where you're appreciated," and "call 1-800- 41-FED UP."

Audience members hearing these for the first time gasped at the aggressive yet entertaining tone, developed for Glenfed by the BBDO agency to attract people disenchanted with bank fees or with the Wells Fargo-First Interstate merger.

Mr. Hall, among others, wondered if Glenfed's bank-bashing might unjustly tarnish the entire banking industry. And some observers criticized the pricing strategy.

"Households attracted by price tend to be distinctly unprofitable," said Phillip Hudson, executive vice president of First Security Bank in Salt Lake City.

"Companies that blindly offer free checking ... will end up with a high percentage of unprofitable customers," said Donaldson's Mr. Brown, who prefers to track customer profitability over market share. "I'm shocked we still see it."

By contrast, a radio winner from Southern California Savings, Los Angeles, advertised "Simply Checking" - no per-check fee but $3 a month.

Norwest Corp. duplicated Glenfed's double, winning for TV and radio series featuring comedian Bob Newhart on the customer service phone. BayBank Systems Inc. and Bank of Mecklenburg in Charlotte, N.C., won for multimedia ad programs.


Three were added to the Hall of Fame that the group established last year:

* Martin J. Allen, the recently retired director of corporate planning at Old Kent Financial Corp., Grand Rapids, Mich.

* Barry L. Deutsch, former marketing director at Mellon Bank, now head of the Deutsch Consultancy in Coral Gables, Fla.

* Joyce A. Healy, a former senior executive of Manufacturers Hanover Trust Co. in New York who in 1990 became the first woman to head the group and is now a principal in a New York-based design firm, ASI Sign Systems.

Mr. Allen said the industry's growing complexity poses a fundamental marketing challenge: "You people have a rare opportunity to take this complexity and make it simple."

Ms. Healy said she felt odd but honored to be joining "my heroes" like Mr. Rosenberg, one of six charter designees last year.

The other achievers in that group were University of Kentucky professor James H. Donnelley; Alex W. "Pete" Hart of Advanta Corp.; Leonard W. Huck, formerly of Valley National Corp. of Phoenix; former Federal Reserve governor and Shawmut National Corp. executive John P. LaWare; and N.W. "Red" Pope of First Hawaiian Inc.

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