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BirdsEye View

 Covid has irreversibly changed how humans interact, make decisions, entertain themselves and others, execute on their decisions and countless other changes.  COVID also changed people’s focus on what they consume, what’s important in their lives, the immediacy of mortality and numerous other major life guiding decisions.  Since Marketing is consumer-driven, it, too, needs to change.  Old paradigms might not be effective in this new, COVID-impacted world.

Which paradigms are being rendered obsolete?  Here are a few.

1. Traditional segmentation and 1:1 mass marketing 

For years we believed that mass marketing at the customer level is what we should strive for.  We should understand the individual’s behavior and preferences, then follow by offers tailored to each individual.  Marketing messages need to be personal and on the ground level.  That approach resonated particularly among us, the community banks, where we felt we have a competitive advantage.  We know our customer, we ARE on the ground, and we can craft a message at the individual level.

Things have changed during COVID times.  While the tried-and-true paradigm still resonates, our use of segmentation to understand the individual customer needs is becoming obsolete.  We append our basic customer data with demographic, even psychographic information, and use technology to develop a 1:1 offer.  In the process, we are missing an emerging set of segments which is led by group-think, based upon social media interactions and a new sense of belonging that was merely a ghost of an idea prior to COVID.

For example, large groups of customers now value climate change more than price.  They will buy Patagonia and pay more because the brand is based on planet-consciousness and supports its conviction with a commitment to cause-related donations.  It’s not “just” a clothing company.  It is also a company with strong social consciousness.  It attracts a customer segment that shares these concerns and values by the very definition of its brand.  

As a result, marketing to climate-change-oriented customers becomes brand-related and NOT a 1:1 offer.

Similar examples include customers who prioritize Social Justice, Money/Affordability and other, similar segments.  

2. Your competitors are industry peers

The nature of our competition has changed.  Digital adoption is in overdrive mode, thanks to COVID.  While early adopters were already deep into digitizing their life and banking with it, many customers were dragged into digital banking by necessity.  A surprising number of them found the experience to be pleasant.  Further, they learned to virtually visit their doctor, have their food delivered and order restaurant meals with great ease and 100% customization.  Today’s customer expectations have skyrocketed.  When your family restaurant three blocks away can customize your meal (spicy or not; sauce on the side; no oil etc. etc.), that level of self-service control gets assumed away at some point.  Yet banking services are lightyears away from that type of experience. 

How can we meet, even exceed, these customer expectations while being held hostage by lagging core providers and other technological issues:

• Focus on measuring customer satisfaction, if possible in real-time, with as much feedback specificity as possible to identify the top pain points that yield most of the pain.  Resources at every organization, no matter how large, are, by definition, limited.  Developing detailed market intelligence on what matters most to your customers will facilitate your resource allocation decisions across numerous development efforts that are all competing for the same resources.  

In our forums it has become evident that not all bank customers are the same.  We see major geographic differences, accentuated by local and state-level COVID decisions.  National market research is always helpful, but is less so in today’s splintered society.  Find out more about YOUR customer base, with special attention to your most coveted segments, and use that knowledge to prioritize your efforts.

• Gain access to data management resources, either in-house or through consultants, to help you better understand your own base, best practices for like-segments, and key aspects of your own customers’ journey.  

• Get an accurate reading of your data maturity and readiness, as we are growing more dependent on that information in developing and delivering services than ever before.  Data has become a central element in our marketing strategy, and we need to be able to rely on it, with “one source of the truth” approach to data gathering and analysis.

3. Marketing has a calendar, is seasonal and is based on predictable customer purchasing cadence and behaviors

Traditionally, and generally today, we have used a marketing calendar that hasn’t changed much over years.  COVID, as we know, has resulted in vast changes in customers’ purchasing and behavior patterns.  They buy fewer clothes and spend far less on entertainment, for example.  They also spend far more on items such as gardening tools and plants, home improvement, exercise equipment, outdoors equipment, indoor entertainment (from Netflix to Oculus) and RVs.  The timing of spending has also changed, and is defying traditional patterns.  Reconsider your marketing calendar and replace it with better targeted campaigns utilizing your own customer information and database analytics.  Your data can allow you to optimize your customers’ experiences with the bank and deliver more efficiently on your brand promise.

Our PPP experience is a wonderful example of this point.  Most banks used manual labor to handle the first PPP wave.  It was an all-out effort by half or more of all employees.  It was exhausting and exhilarating at once.  The second wave found us more open to automation, and yet the customers’ reactions were not negative.  On the contrary.  Generally (there are many exceptions, I know) customers welcomed the self-service option to upload information to facilitate a second deferment, and subsequently forgiveness.  Those tools can now be repurposed to continue improving our customers’ experiences across the board.

Effective utilization of your data can help you improve the content of your marketing messages and increase its relevance to customers across the board, from consumers to wealth clients, from business banking to large corporations.  It can also improve customers’ perception of convenience and self-reliance, in line with their experience across other industries.

4. Marketing offers a number of options to customers, and they choose what’s best for them.

Our industry has vacillated over the years between too many options, say a dozen checking account options, to too few options (small, medium, large).  Our bankers utilize rudimentary customer data to match the prospect with our product line.  The result:  a limited sense of control and appreciation from the customer.

Some banks have shifted to the “cafeteria” menu approach for banking services for certain segments, and have done so successfully.  The customer selects the “main course”, a relationship-based product, and adds to it their choice of 2-4 products from a longer menu to yield the product family that best meets their needs.

The nature of choice has changed fundamentally in the digital age, and even more so in the past year.  The number of highly specific phone apps has exploded.  Online shopping allows you to find the exact pink polka dot top you’re looking for without scouring the stores for days.  Yet the nature of our own online shopping offering has remained quite rigid.  Heck, our website don’t even have a shopping cart icon.  They certainly don’t have the option of “buy three and get a 10% discount”.  We do not offer customized selections, nor do we give the customer a reason to aggregate their purchases with us.  

The opportunity before us is meaningful.  The digital age allows us to produce fully-customized offers on the individual or segment level using data science and other information.  The returns, customer experience, satisfaction and loyalty associated with this approach are greater than our traditional approach.

There are numerous other changes in the effectiveness of traditional marketing thinking.  One thing hasn’t changed:  relationship is still everything.  Relationship-driven organizations have fared well during COVID.  Companies that center their value proposition and marketing strategies around relationships have also done very well.  PPP is again a central example of the use of relationship management in onboarding loan-only customers and converting the to longer-term bank and Treasury Management customers.  Relationships imply trust, doing what’s right for the customer and our other constituencies without compromise.  Relationships engage customers’ hearts. Not just their minds.  That’s where brand values come in, and where marketing can translate these values to longer customer retention, better customer acquisition numbers and improved franchise value for the enterprise overall.