Bankers give thumbs up to U.S. economy.

America’s bankers are more optimistic about the U.S. economy than they have been in quite awhile. According to the 17th Bank Executive Survey conducted by Grant Thornton, a global audit, tax, and advisory organization, only six months ago 24% of bankers expected the U.S. economy to improve. Now, when the survey was conducted from May 4-24, forty-five percent of bankers believe the U.S. economy will continue to improve during the next six months.

According to the survey, this is a statistically significant improvement over how bankers felt about the U.S. economy six months ago.

And, looking at the bankers’ local economies, there’s some optimism as well. More than one-third (35%) of bankers surveyed expect their local economy to improve in the next six months, up from 22% in December 2009. Only 9% of bankers expect their local economy to get worse, down from 18% in December.

The survey queried both large and small institutions which were both privately and publicly held. Fifty-nine percent of the respondents were from small banks with less than $500 million in estimated assets, while the remaining 41% of the banks had assets over that amount.

“Bankers across the country are starting to become more optimistic about both the U.S. economy and their own local economy,” noted John Ziegelbauer in a news release. He’s national managing partner of Grant Thornton’s Financial Institutions practice. “Their optimism about the economy is spilling over into their own banks, with bankers reporting that they are also cautiously optimistic about the number of people they expect to hire in the coming months. Overall, it appears that bankers believe that the economy has finally turned a corner.”

On the job front, a quarter of bankers say that their bank will increase hiring in the next six months, up from 18 percent in December; while the number of banks that plan to decrease staff has dropped slightly to 16 percent from 18 percent in December.

Survey stats.
Here’s a look at some of the statistics.

Will enthusiasm extend to bank marketing?
With this overall optimism from both large and small banks, plus the indication of additional bank hiring, will bank marketing budgets be reviewed and increased? It will be interesting if the bank execs’ enthusiasm extends to their own bank marketing.

Related articles in Bank Marketing:
16th Bank Executive Survey: New Survey hints at bank strategies and marketing forecasts.

Prove you’re small business friendly. Chart your lending record.

Community banks have had a reputation as being lender friendly to small business. And, that reputation continues as big banks hold on to their lending dollars. Perhaps it’s in your community bank’s interest to point out your lending record to prospects. . . especially if you have one to crow about. Don’t just talk about it. Demonstrate it. Chart it. Put a graphic to it. Post it to your website. Then use it as part of your presentation to small business. Show you are a friend to small business.


The New Rules Project, a program of The Institute for Local Self-Reliance, did some charting of their own. They examined large, mid and small sized banks and contrasted their share of assets to their share of small business lending. As expected, small banks. . . those under $1 billion in assets. . . carry the lion’s share of small business lending.


The New Rules Project went further and compared the amount of actual commercial loan dollars that went to small business. Again, community banks catered to smaller enterprises.

Do your own chart. Create a graphic depicting your share of lending to the small business community. Then, show how you compare with the big boys, as well as your community bank competitors. As they say, a picture is worth a thousand words.

FOOTNOTE:
Large banks rebrand themselves as “community” banks.

Now in an attempt to turn their stingy reputation around, big bankers Citibank and Wells Fargo have recrowned themselves as “community banks.” A Huffington Post article, Big Banks Want You Back, notes that a revamped portion of the Citibank website makes “conspicuous use of the words ‘local’ and ‘community’," And, the online publication reported that Wells Fargo with its 10,000+ locations and $1.2 trillion in assets described itself as "the nation's leading community bank" during Olympic Games ads.

In a biting response to the commercials, Camden Fine, head of the Independent Community Bankers of America, warned, "Wall Street mega-firms better be careful what they call themselves lest they be confused with actual community banks that regulators allow to fail."

It's no surprise that big banks are grabbing onto words like "local" and "community," says Tim Pannell, president of Financial Marketing Solutions, which develops branding and advertising for banks. "Big banks understand that those are the key words that are creating success for a lot of community banks," said Pannell.

Do customer relationships affect your bank’s mortgage and home equity sales?

This past week the Raddon Financial Group posted two interesting charts, especially in light of the mortgage mess that hit the U.S. this past year. Where would customers look for mortgage and home equity products? In their online Raddon Report, the financial consumer research and database company answers that question.

Positive vs. negative. . . there are two sides to this coin.
Looking at the numbers in a positive light, bank marketers would say customers look first to their existing financial institution for either mortgage and home equity products. Sounds good, especially in terms of relationship building. But. . .

View the numbers from the other side of the coin. Then you’d say that roughly 70 to 75% of the population is open to jumping ship and looking elsewhere for these services.

Where to go for a mortgage loan.

When consumers were asked what type of financial institution they’d consider for a future mortgage, 31% responded that they’d turn to their primary financial institution. This was followed by 27% who would look to a bank. And, 17% would go to a mortgage broker.

Where to go for a home equity loan.


When consumers were asked their choice of institution for a home equity product, 26% would march through the doors of their primary financial institution. Eighteen percent would search for a bank and 9% would head down the street to a credit union.

In either situation, banks seem to have the lead as a second choice over other alternatives.

What does this means for bank marketing strategies?
Well, this depends if you’re a “glass half full” or “glass half empty” person. It seems that bank marketing departments have an opportunity here to build on their customer relationships. As the charts show, there’s definitely a consumer tendency for people to be drawn to their own financial institution first. The Raddon results, therefore, demonstrate that bank relationships are important. But with the current image of banks lacking, there’s definitely some fence mending needed to boost those numbers.

HELOC features that are preferred by consumers.

In a related study, Raddon tallied 1,155 survey responses to determine what home equity credit line features consumers preferred. Over eight out of 10 (84%) indicated that it is important that a line of credit not have any early closing costs. Eighty-four percent also reported that it is important that a HELOC should not have upfront fees. In contrast, only one-fifth (27%) indicated that it is important that a lender offer credit card access to their product.

Related articles in Bank Marketing:
Use refi promotions to strengthen relationships and cross-sell. . . before your competition does.

Bank markets to small business with educational webinar.

Nevada State Bank made a smart move. They tapped business and sales guru Jeffrey Gitomer to conduct an online webinar for small business clients and prospects. In the approximately 1-hour webcast, the animated Gitomer flailed his arms as he presented point after point of solid sales strategy for the rough upcoming year. Gitomer, who has authored a number of sales-oriented books, is a draw for any marketing event, but that’s not what’s unique about Nevada State’s strategy. What’s unique is the bank’s awareness of stepping up to the plate and offering businesses a hand. . . or in this case, the knowledge to work their way out of recession.

This isn’t the first foray, or even the last, into online “education” for Nevada State Bank. They have been doing it for the past year. Their 30-45 minute webinars complete with additional 15-minute live Q&A opportunities have been monthly events for the Nevada-based bank. Past archived webinars include a Stephen Covey presentation, insights from publisher Darren Hardy of Success Magazine, an SBA lending event and economic forecasts.

Tom Sweet, Vice President of Marketing at Nevada State Bank, introduced the webinar concept to his bank’s marketing department. He previously used the same format at a Los Angeles bank. In a phone interview, Sweet said that they’d “originally started the webinars to build awareness for who we are and add credibility to some of the services that we offer and provide value-added to clients and prospects.

“The results have been huge,” he explained. “Different subjects draw different size audiences. They generate a lot of goodwill and a lot of good word-of-mouth feedback and interest. The smallest audience was approx. 500 to up to thousands.” The Gitomer presentation proved more popular. Sweet credits the webinars with increased business for the bank.

The marketing veep remarks that he hasn’t seen a consistent, on-going webinar program in other banks’marketing plans.

Promoting to small business.
Gitomer wrote about his preparation for the Feb. 24th webinar in his popular Sales Caffeine email newsletter saying he spent more time preparing for this event than his regular live seminars. Gitomer, who has his own large following, promoted the event on his blog, Facebook, Twitter, and LinkedIn pages. From there it went viral. Nevada State Bank’s marketing department added email, offline and online advertising including biz journal ads, bellybands on newspapers, direct mail and online banners to the promotion mix for their webinar series. A microsite on the bank’s website also promoted the free webinar along with event registration.

From a “budget stand point, it’s [the webinar series]not huge, noted Sweet of his marketing budget for his 57 bank offices. “ It’s an important component , but it’s not everything.” Nevada State Bank has used outside technology resources to pull off the events; although the more savvy the bank marketing staff has become, the more they are able to handle themselves.

Stepping up as a small business leader.
I’ve been a long-time proponent of bank marketing departments looking beyond traditional advertising to reach their audiences. It would be a huge facelift for more of the banking industry to step up and change the image of banking. . . from self-serving to customer-service. Small business is especially in need of a helping hand. Perhaps the conclusion of the Gitomer webinar says it best. He endorses the bank’s efforts at the end of his online presentation, stating that Nevada State Bank “gets it” and that they’re “the only bank in the country who understands the real state of the economy.” From Gitomer’s loyal fan-base, this definitely is a seal of approval.

What this means for Community Banking:
No matter what your bank’s marketing budget, you can recreate your own online version of this same educational strategy. Don’t be intimidated by the Gitomer and Covey names on this webinar’s roster. Tap into your community and business leaders as expert presenters and create 2 to 5 minute low-cost, no frills video and post it to your website, deliver it via email to customers and make it available to small business prospects. Be pro-active and set your community bank up as a small business promoter worthy of their loyalty.

Related articles in Bank Marketing:
Energize your small business clientele & you’ll earn entrepreneurs’ loyalty.

Nine bank marketing trends for 2010.

The “new economy” is forcing some changes in banking and one analyst has several predictions that could impact the financial services industry in the coming year. Savvy bank marketing execs, especially those in community banks, can capitalize on these trends. The consumer-focused trends were compiled by Mintel Comperemedia and released on February 8th. The Chicago-based company reviewed the directions bank direct marketing departments have been taking recently then developed their predictions.

“Based on evidence from recent direct marketing, I see waves of change ready to wash through the banking industry.. . . banks seem poised to make 2010 a year of innovations,” states Susan Wolfe, vice president of financial services at Mintel Comperemedia. “The biggest challenge will be finding new opportunities for revenue.”

Wolfe believes the banking trends for 2010 are. . .

1. The end of "totally free” in checking
In 2009, fewer than half of checking direct mail offers promoted free checking, down from three-quarters in 2007-2008. Susan Wolfe explains: “With pending regulations on overdraft fees, banks risk losing a major revenue source. Charging fees on checking is one way to recoup income.” Some banks may implement monthly fees, while others will let customers decide which perks are worth paying for.

2. More comprehensive rewards programs
With the decline of free checking, Mintel Comperemedia expects an increase in rewards checking and more specifically, rewards banking. As financial institutions look for ways to appeal to new clients and make current customers more loyal and profitable, they’ll start offering rewards for more than just debit use.

3. Programs designed to increase deposits
Automatic account builder products that boost deposits will become more popular. Deposit-building accounts get customers invested in multiple products, while helping banks secure more deposits.

4. More aggressive debit card marketing
Mintel Comperemedia has seen direct mail decline across financial services categories, but debit card volume remains strong at nearly 67 million offers in 2009. “I expect we’ll see more aggressive debit card marketing this year because banks are using debit fees to increase revenue. . . I expect to see more cash incentives and other perks that encourage debit card usage,” notes Wolfe.

5. Cash incentives increase and expand
Cash incentives are a hot direct marketing tactic for checking accounts, appearing in most offers. In 2010, cash incentives will grow even more enticing. Mintel Comperemedia has already seen incentives reach $200 and higher from larger banks. Watch for banks to start using cash incentives for other types of deposit accounts too.

After Mintel’s initial news release, the company issued four additional predictions for the months ahead…

6. Banks will seek to create “financially literate” customers
Much has been said about how the ongoing economic situation was caused—in part—by a lack of consumer knowledge about financial matters. The “Great Recession” has been a wake-up call for every generation. According to Mintel consumer surveys, each generation is reacting differently, but young Echo Boomers (Baby Boomers’ children) have a strong desire to learn more about financial matters.

7. Mobile banking is here to stay
The popularity of smart phones is driving banks and investment firms to develop applications that allow mobile banking and payments. User demand will be the reason that mobile banking succeeds. With teenagers and young adults relying on their phones in ways never imagined, mobile banking will become an expected service for the younger generations. At the same time, banks must carefully consider how they’ll engage mobile banking customers to ensure a long-term relationship.

8. Prepaid cards as an alternative to checking accounts
The prepaid industry claims that, for some lower-income consumers, prepaid cards can be cheaper than traditional bank accounts with overdraft protection. This will certainly be true if banks begin to institute monthly fees or fees for bill payments and other types of transactions that are currently free. In a sign that there is more interest in prepaid cards, MasterCard reported it is looking at ways to market prepaid cards to the affluent.

9. Banks will begin to figure out social networking
Banks have struggled with how to embrace social networking sites such as Twitter, Facebook and You Tube, but 2010 will see them finding new and better ways to get involved. Overall however, 2010 won’t be about financial services companies setting up pages and groups on social networking sites. Instead, banks will start developing applications for use in social media and creating a presence that says something about their brand. They will begin to use social media to network with new groups of customers.

With all the bank marketing cut-backs in 2009, these predictions should mean that bank marketing departments will again be pro-active and promoting their products and services.

New Gallup Poll: Banks’ image continues to plummet.

Americans’ perception of the banking industry continues to plummet, according to a new Gallup poll. The poll was conducted August 6th through 9th, 2009. Gallup was seeking Americans overall view of various business sectors. They wanted to know if respondents were “positive, somewhat positive, neutral, somewhat negative or very negative” of the specific industry.

In this annual poll, Gallup found that many industries that took big image hits in the 2008 poll have recovered this year. But one exception is banking. In 2008 they lost 14 points, one of the largest drops of all industries that year. In the recent poll, banking dropped an additional 8 points, the largest of any industry.

A positive image just 2 years ago.
Surprisingly only two years ago, more Americans viewed banking more positively than negatively. As recently as 2006, a majority of Americans had positive ratings of the banking industry. In fact, banking had a 58% approval rating. As of last week, it’s now at 28%. The following chart shows the image decline along with the automobile industry.

The image decline is understandable with all the events that have occurred in the past year. But what’s disturbing is the continued decline, especially since the survey was conducted just over a week ago.

What this means for community banking.

While some community banks may prosper at the expense of their larger competitors, many smaller banks are still tainted by the overall downfall of the industry. And, others are simply wavering on the financial brink themselves. Bank marketing execs can certainly step up to the plate to help remove the tarnished image. But it will take more than a few ads to rebuild Americans’ perception of the banking industry. Everything from consumer service to financial education to advertising transparency must all be addressed in a successful marketing plan.

To see how other industries faired and the most popular sectors, Gallup has its findings online. In addition, The Economist has a great graphic of the Gallup results.

Is your bank’s brand on parade?

Summer is the time for community festivals and parades. No doubt as a local banker you’ll want to haul out all the crepe paper and chicken wire you can find to create that prize-winning float. Participating in that Main Street parade shows you’re part of the community. In fact, it’s a unique and fun-filled way to reach out to townsfolk. And, it’s a great team builder for bank staffers as well. A lot of goodwill can be mustered during that mile and a half trek down the street.

But as a bank marketer are you watching what your branch banks are floating down that street? Is it in keeping with your bank’s primary message?

Creativity, camaraderie and enthusiasm.
You don’t want to stifle the branches’ creativity, camaraderie and enthusiasm. That’s priceless in itself. And you don’t want to be heavy handed in dictating a theme for a local festival. After all, the local bankers are part of that community and festival, while you’re not. They can judge the pulse of the community easier than you.

Finally, it’s understandable that community banks don’t have the funds or the professional assistance like Key Bank did for their terrific float depicted here for a Portland parade. And, it can be humorous to the crowd goers to view the makeshift floats being pulled by cars, trucks and tractors.

Beware the cringe factor.
It might be in your bank brand’s best interest to outline a rudimentary image requirement before branch staffers go parading down the street. I’ve seen a number of bank messages that made me ask, “What were they thinking?”

Recently I cringed when I saw this crudely emblazoned on one community bank float filled with Hawaiian décor and lawn chairs. . .

Relax. Your $ is safe with XYZ Bank.

I’m not sure that a comical float was the proper venue for proclaiming the bank’s solvency. Especially, in light of the recent bad publicity of large bank bailouts and small bank failures.

Setting guidelines for your next parade float.
Set standards for local festivities. Let your crew be creative, crazy and community-inspired, but within reason. Here are some questions you need to ask when establishing guidelines. . .

- Are your branch managers or staffers sensitivities the same as the parade goers lining the streets with their lawn chairs?
- Does your bank’s attempt at humor or creativity illicit another image in the community’s mind?
- Is their dress or costume too sexually explicit?
- Is the theme too adult and not family oriented?
- Is your theme getting your message across without destroying your brand?
- Are there spelling or grammar mistakes in your hand-printed signage?
- How is your logo or tagline being used?
- Will your next float illicit smiles or gasps?

While your next float might not always project your brand exactly due to monetary and creative restraints, the guidelines will at least protect your image. Think about setting guidelines so your float doesn’t become the talk of the town. . . negative talk that is.