Editor's Note: This is the third article in a regular series of monthly articles by attorney and financial industry consultant Jerry Groskind focusing on internal, investor and marketing communications issues relevant to small and mid-sized community banks.]
What Do You Read
When you go through your email every day, what do you focus on? How many of those promotional emails do you actually read?
I scan my email and delete without reading anything that is purely promotional and doesn't offer me information I can use. I resent being sent promotional material that I have not requested (Spam). Even if I were considering doing business with a company, if they send me Spam, I'm going to their competitors.
But this goes way beyond Spam. I don't feel a whole lot better about receiving information I can't use if I've agreed to be on the company's recipient list. If the material isn't useful, it will wind up unread in the virtual trash. And if that happens consistently, I'm going to remove myself from the company's list, depriving it of the opportunity to market their goods and services to me via that channel.
Building Perceived Value
Sending garbage material - or material recipients perceive as garbage - to your customers or potential customers, doesn't just annoy them. It could turn them off entirely and send them to your competitors. You must create "perceived value" in your communications if you want your customers to read and act on them. Note that it is your audience's perception of what is valuable, not yours, that is important here. Your customers will view blatantly promotional communications as far more valuable to you than to them. This is not to suggest that you should never promote your products and services; but it is to suggest that you need to find opportunities to communicate with your customers for reasons that do not just involve conveying another sales pitch to them.
Let's use an example. You would like to promote your bank's mortgage products. The easiest approach is to send out email, add a blurb on your Web site, insert statement stuffers and the like directly promoting your products - perhaps focusing on today's historically low interest rates. If your interest rates are the lowest on the planet, your customers may react to the communications by calling to ask questions, scheduling an appointment, or filling out an application. But unless what you are offering is truly dramatic and unique - a 3 percent mortgage when everyone else is at 6 percent - your promotional material will be lost in the flood of similar materials consumers receive constantly. If you are like most community banks, your rates are probably competitive but not sufficiently different to make your promotions stand out from those of your competitors.
Your customers and potential customers need to perceive that your communication is offering them something of value. Valuable to them - not just to you. So how can you build perceived value for your customers and perceived customers? One answer is to provide them with unbiased information they can use - information that is related to the products and services you are offering, but is not about them. Instead of a cover page touting your rates and menu of mortgage products, you might feature a Q&A on refinancing issues, or an article explaining credit scoring, discussing tax issues, or suggesting how to choose a mortgage, with a link to information about your rates and the loan products you offer. You've provided information they can use and you've given them a reason to return to your Web site, read your next email, look through your newsletter, or give you a call, maximizing your opportunities to promote your products and services.
Everybody Does It
"But everyone in the industry sends out those blatantly promotional materials," you say. Well, maybe not everyone, but clearly a large portion of promotions fall into that category. The key for community banks is to differentiate themselves from the rest of the market, not to copy it.
The goal is not to keep up with the Jones's, but to beat them. When the national and super-regional banks and giant mortgage companies are blasting their promotions to a super-saturated public via every conceivable form of communication, the most effective response for community banks is to demonstrate that they understand their customers, can best fill their needs, and have their best interests at heart.
Balance, Integrate, Coordinate
Community banks must continue to promote their products and services - and including ads in their own communications with consumers is a good way to accomplish that goal. Like newspapers that separate their advertisements and editorial comments from the daily news, community banks should separate their promotions from their consumer information. This builds credibility and strengthens connections with your customers. Consumers are more likely to come to your bank because they trust it or view it as a source of valuable and unbiased information than because they were so impressed by the daily e-mails and statement stuffers you've sent promoting your services.
Build Content to Match Your Business Plan
Editorial content should be unbiased, but it also should be linked directly to your institution's business and marketing plans. Publish editorial content on real estate loans if your business plan or current economic conditions suggest that additional real estate lending is in your interest. If tax season is looming, articles talking about tax savings techniques may feed an interest in IRA products. And if people are concerned about the stock market, an article analyzing the relative safety of investment vehicles may spur interest in your CD products.
Conclusion
Customer communications should build business, differentiate you from your competition, establish customer trust and loyalty, and nurture long-term relationships with customers. Providing unbiased, non-promotional content your customers value is an extremely effective way to accomplish these goals. It is also a good way to make you look like a white knight rather than a door-to-door salesman.
