Banking is something that everyone does throughout their entire life. Even if it is just a piggy bank or a bucket of change, you are participating in a form of banking.
If you wanted to build a portfolio, you would go to a bank or a brokerage firm and talk to someone who specializes in that sort of thing, right? In that meeting, I can assure you that everyone hears the same word at least one time. Diversify.
Diversification is one of the main principals in building wealth. So if banks know this, why do so many of them spend a disproportionate amount of time and money on marketing to millennials? It seems almost like an unhealthy obsession, but I’m sure most of you bank marketers can attest to the fact that we are focusing way too much attention on one group of people.
Being that every single person on the planet could use some sort of banking product, all seven and a half billion of us, you would think banks and credit unions would be paying a little more attention to some of these under-banked or up and coming segments. No matter what generation bracket a person falls in to, banks and credit unions should be trying to make individual connections with every person they can.
It may seem like an impossible task, but when you factor in that in 2017 the 40 leading banks in the country spent 14 billion dollars on advertising and marketing, there is a lot of wasted money being pushed around — and a lot of it is being focused on millennials!
I think that banks and credit unions should completely shake things up and keep two words in mind: Education and Diversification!
Everyone can agree that an educated customer is the customer you want to have.
I was a bank teller when I was about 20 years old and kept the position for just short of one year. Previously I worked in retail and was always was comfortable with the cash handling aspects.I also loved working with and meeting new people, so I thought the move to the bank would be great. I looked forward to the interesting people I would meet and hopefully would get to know.
Quickly, I learned that was not how banking worked.
Banking culture was something almost out of a sitcom. People were so worried about individual numbers that they would sacrifice the quality of service they would give to a customer just to follow up on an account they really needed to close for a quote. As a teller, we were forced to present a script to people even if we saw the same person every day! They removed all of the organic relationship building and were so focused on opening new forms of accounts. I hated it and knew early on that it was not for me.
I left the job at the bank and started a landscaping company that I owned and operated for the next ten years. This venture taught me about finances; but it also taught me how simple business can be and should be.
There are four core ideas of business that I think banks have gotten away from:
- Take care of the customer.
- Create a real relationship with people.
- Educate people on why they need you.
- Worry about the long term client and not the short term dollar.
Banks and credit unions are doing a disservice to themselves and their customers when they only focus on one demographic and fail to educate people.
Financial Literacy should be one of your primary goals!
Financial literacy in this country is horrendous. Sadly, it’s not something that’s even taught in most areas of the country throughout K-12 education. In fact, a vast majority of graduates still do not understand how to, balance a checkbook, do their own taxes or understand the loans they are signing to get through college.
That is where banks and credit unions should seize the opportunity and market in the form of education, not stadium naming rights.
Fun fact; did you know that nearly 20% of all major league stadiums are named after a Financial Institution ?!? To be fair, it does get them long term brand recognition and opportunities to work closely with the big dollar sporting teams. But they are totally under utilizing those celebrity relationships and what a long term relationship could mean.
We live in a media driven world.
No matter how you like to consume it, be it a newspaper, magazine, or the latest blog, we live in a world that is fueled by content. More and more of that content every day is becoming an organic, educational content.
People like Gary Vaynerchuk, a wine seller turned business icon, have become household names because of their ability to educate, document, and create relationships with people. Millions of people watch him go to garage sales each weekend looking for stuff to flip on eBay. Imagine if banks took the sport teams they sponsored and had them go around teaching people about banking. It could provide real value in both education and entertainment!
One example of how this should work, is what Richardson Marketing is helping banks and credit unions do in this space. From their innovative financial literacy campaigns to some of the social media campaigns they are developing, they are leading the way in helping credit unions become thought leaders in the financial industry. Robert Richardson, CEO of Richardson Marketing, shared some of his ideas with me:
In the past when someone needed financial advice the first person that they thought of was often their banker. Today it’s probably more likely that they are going somewhere else.
Today’s customer has more options, more channels and more so called experts who are ready and willing to offer advice at the drop of a hat. The way your customers think about financial services has been completely redefined.
We wanted to help our credit union clients recapture the space, and we wanted them to be seen as the go to experts on everything financial. In order to do that, we had to look at their marketing in a way that took the focus off of product marketing and instead switched it to educating their customers on finances. The results have been nothing short of amazing!
From teaming up with NFL athletes who went into local schools to help educate kids on financial literacy to teaming up with organizations like Success Magazine, we built a series of campaigns that combined the best aspects of traditional marketing and blended them with the best aspects of digital marketing.
The viral nature of these campaigns do far more for their brands than anything else could ever do. They are making lifelong fans through educating people on financial literacy who will eventually become lifelong customers.
Ten years from now nobody is going to remember your billboard, that temporary .25% increase on your certificate account, or the new cool name you gave your latest checking account, but they are going to remember the bank or credit union who taught them everything they know about finances and success.Robert Richardson, CEO of Richardson Marketing
Banks and credit unions should be working with schools, churches, retirement communities, and anywhere else where there are groups of people who need to be educated in the world of finance. They can use the relationships that they have with professional athletes or local celebrities to have them go into schools and have them talk about savings, investing, and becoming financially independent.
In the same way that driving by a nice stadium seeing a name and a logo is brand recognition, being able to show that you are helping to better people’s lives and help them grow both financially and as a person, is way more valuable brand recognition.
Taking the focus off of selling a product and shifting it towards showing people why they might need that product, and educating them in a way that really helps them grown is real long term brand recognition.
Long term brand recognition is knowing that the credit union that you pass while driving to your accounting job every day is the same one who donated calculators and guest speakers to help teach you how to understand the world of money.
But we need social media followers!
We live in a world so wrapped up in the numbers, the metrics, the data, that we forget to make the connections. We all worry about trying to get new followers and more likes, but we don’t take the time to appreciate and spark a conversation with those who are commenting on our posts, or even even worse the ones who are right there in the lobby.
The beauty in this philosophy is it can apply to everyone in your organization. It isn’t a trick, or a hack, or something you have a meeting on; it is an entire change of culture. If your CEO, your marketing team, your boards, and your tellers take the approach to educate and make personal connections with as many people as possible I can assure you that your satisfaction scores and your bottom lines will all benefit.
All in all, I hope that banks and credit unions can snap their cycle of spending so much time in one area and start to look at the larger picture.
They should stop focusing on the needs of millennials without thinking about the generations to come. Developing branded educational programs that get people thinking about money at an early age will create more need for your banking products and help develop lifelong relationships with the people who then need your services!