What the Best Community Banks Are Doing Right

Every year, we have the honor of presenting the Banking Choice Awards, in which the top community banks and credit unions are recognized for providing outstanding service to their customers and members. The New York Banking Choice Awards were announced in April at the Banking New York Conference, and on June 28, winners will be announced for Connecticut, Massachusetts, New Hampshire and Rhode Island at the Best Bank Expo.

The Banking Choice Awards are based upon the results of the Banking Benchmarks®, the largest and most comprehensive measure of banking customer experience in the world. The Benchmarks are independent of any financial institution and conducted by Customer Experience Solutions.

Our banking benchmarks delve into 53 different metrics about each institution customers use for banking services. These include the metrics used for the Banking Choice Awards: Overall Quality, Customer Service, Tools & Technology, and Community Contribution. Rankings for Overall Quality, Customer Service, and Tools & Technology are based on people’s responses concerning their primary banking institution. The final category, Community Contribution, is based on the responses for institutions that they are aware of but do not currently use, making it a reputation-based ranking.

There are consistencies among the winning community banks that can be used as a guide to improve your community bank CX:

Community Involvement

Community Banks who earn Banking Choice awards are among the most active in their communities. But they’re not just active – they know how to make sure their community involvement is visible to the community so that the people they serve are aware of the efforts they make to support them. Our surveys show that when a community contribution is accompanied by marketing spend to promote it, the impact to the bottom line can grow by more than 350%.

Technology

Winning community banks not only offer the same technology to their customers as larger banks but also have ensured their employees are trained to use it and can help members navigate it – without losing the personal touch that sets them apart. Staff training is typically one of the top reasons that people decide to switch banks, according to our benchmarks.

Personalized Service

Banking choice award winners are adept at providing exceptional customer service. They pride themselves on their ability to know their customers well, make more informed and faster decisions to help them with their financial needs. They know their customers. 

Customer Experience

What we’ve learned from our benchmarks is that not even better rates can pull a customer away when they feel valued and listened to by their community bank. In fact, customer experience is the most important differentiator. Customers will pay more for better service.

You Can’t Take Advantage of the Opportunity without Knowing Where You Stand

With 1.24 million customers ready to switch banks, there is a lot of opportunity for community banks and credit unions to grow, but it’s going to take not only delivering on customer experience but knowing where your bank stands in comparison to your competition. When you know what your customers and prospects think of your bank, you can make informed decisions to attract more loyal banking customers. Request your benchmarks now.

Competing for Customers, Community-Bank Style

competing community bank styleIn the battle for wooing banking customers, large banks are starting to lose out to community banks. It’s no longer the lowest interest rates that get people in the door; customers must be able to trust who they’re banking with. Banking is becoming significantly more competitive, with a customer base that desires an experience over a service, and larger banks are having a more difficult time adjusting.

Competitive rates don’t sell.

In a banking industry that now offers accessibility to consumers nationwide, competitive rates are no longer the biggest competitive advantage. When everyone offers competitive rates, the interest on loans or deposits are not as much of a driving force as they used to be.

Consumers seek financial partners.

Delivering on banking technology is a given, but community banks can leverage what has always been a bestseller: relationships. Community banks and credit unions can offer loans to consumers that big banks may not be able to offer. More than that, community banks and credit unions offer mutual trust. Customers are able to walk into a local branch and speak with a trusted adviser – possibly even a neighbor – about how to best invest an inheritance or whether to refinance their home.

Customer relationships are the winning ticket.

Community banks know the needs of their customers and can better serve them as a result. Cross-selling bank services to consumers that are already loyal significantly lowers customer-acquisition costs and boosts your reputation as a reliable banker. Consumers respond to convenience, but they also seek value in the services they are receiving. Tailoring services directly to consumers is how community banks stay relevant.

Stay true to your brand.

It can be tempting to copy the marketing strategy of larger banks, but that won’t maintain existing customers or attract new customers when there are so many options available. You need to find what makes your community bank unique and use that as your competitive edge. Seek out benefits, beyond low interest rates, that will peak the interests of consumers – and understand who you’re trying to connect with in your community.

Pricing structures, fees, and products must be relevant to those you serve, but you also must have a differentiator. Community banks can offer more personalized services that resonate with individual customers, luring them away from larger banks.

There is enormous opportunity for you to grow your community bank or credit union, but it starts with knowing what existing customers and prospects think of you compared to your competitors. Take action now and request our benchmark study for your region.

5 Ways Social Media Can Enhance Your Community Bank’s Brand

Social media offers value for most businesses, and community banks are no exception. Social media can provide another opportunity for community banks to engage with consumers. Strategic social communication can boost your community bank’s brand and image – and as more consumers expect you to utilize social networking, your social media presence is becoming more necessary.

  1. Social media helps manage your messaging.

Whether your community bank is using one or more social media platforms doesn’t matter; your consumers are, and they have things to say. Both positive and negative experiences will be shared via social media, and it is up to you to manage the messaging being generated by your consumers. Your audience will have their own perceptions, but without a social media platform from which you can leverage influential stories, you have no control over the direction of your brand. Social media drives awareness, and it is up to your community bank to effectively manipulate the tools available.

  1. Social media provides strategic marketing outlets for promotions.

Social channels give community banks the opportunity to sell banking services and engage audiences at the same time. With a bit of creativity, unique social selling efforts can deliver extensive ROI. Create a referral program for new checking accounts that awards current patrons for every shared post, or simply highlight ongoing sales that reflect the needs of your community. Social media can be used to generate interest in your services and get people walking through the door.

  1. Social media fosters deeper community outreach.

Social media is about connection, which is where community banks can truly excel. Getting recognition for your efforts to be involved in the community can be difficult, but social media makes it easier. Sharing photos of your most recent scholarship recipients or of your team volunteering at a local shelter can foster positive feelings. Showing community support demonstrates who you are as a brand and gives you the opportunity to reiterate what matters most to your banking customers.

  1. Social media humanizes your digital presence.

This is the perfect opportunity to get personal, and we aren’t just referring to shared photos of favorite family pets. Consumers want to also know what your community bank stands for. We’ve seen highly engaging community banks do the following:

  • Allow bank employees to choose a cause of the month and highlight why the cause is important to them personally. For every share, your bank can promise a specified amount that will be donated to that cause.
  • Highlight community involvement, such as a local nonprofit or sports team your bank sponsors.
  • Announce new services, technology upgrades, and specials.
  • Share community news.

Social media is about so much more than selling banking services, because your customers want to know the people behind the bank counter.

  1. Social media marketing boosts engagement.

The most intriguing aspect about social media is the ability to celebrate anything. Consumers love to share exciting news, and you should figure out what you can celebrate with your community today. Is it a birthday of a well-known bank teller or the anniversary of your branch opening? Have customers stop in to share a happy birthday message and a free cupcake. Take note of annual dates in your community that hold importance and acknowledge any historical relevance. Regardless of how you choose to create excitement, share it on social media.

Social media is a powerful tool for community banks, and it is one piece of the larger marketing puzzle. Community banks are known for their unique ability to connect with their customers on a personal basis, and social media takes that advantage to new heights. Consumers already expect that your services are accessible from anywhere, but your entire bank must also be present on popular social channels.

 

Winners & Losers

2.28 Million Northeast Households and Businesses to Switch Banks this Year

Banking New England Sept/Oct 2018
Published on Oct 16, 2018

In this special marketing issue, learn how to optimize your mobile site, understand why customers can be easily enticed to switch banks, and get an inside look at the New England Financial Marketing Association conference, featuring an article by Bruce Paul.

Community Bank Challenges: Providing a Personal Touch in a Digital Environment

By now your customers already assume that any community bank or credit union can handle basic transactional functions associated with banking and have technology on par with the big banks. So, how can you further meet the expectations of your customers, succeeding where larger banks may fail? Where community banks can compete with – and ultimately excel beyond – the competition, is by balancing personal service and customer experience with the digital component.

Digital banking is important, but it’s not the crux of a successful branch.

Most adults would prefer to do their transactional banking online or by using a mobile app—our Benchmark surveys show that ranges from 55 to 75% of banked adults, depending on the town or city they live in. Transferring funds, checking balances, depositing checks, and completing similar transactions can all be handled comfortably without human interaction. These recurring tasks are not when consumers need or want their banking professionals. Most banked adults, and businesses, prefer to perform these tasks electronically (yes, even Baby Boomers), so you can deploy your personnel resources elsewhere.

Important interactions require a human touch.

Continue reading “Community Bank Challenges: Providing a Personal Touch in a Digital Environment”

Hitting the Right Note with Community Bank Marketing

Community bank marketing requires a comprehensive strategy delivered to a targeted audience, but this is not as simple as replicating the marketing strategies of the banking giants. Forget about advertising the fact that you have technology that every customer expects you to have in the first place. Instead, find ways to differentiate your bank from big banks and competitor community banks. Your strategy needs to emphasize what you do best. What makes your community bank special?

Hyping technology is not effective.

The first effort many banks make with their marketing strategy is to emphasize their use of current technologies. Mobile banking and chatbots are no longer new to the banking industry, and within competitive markets, consumers don’t differentiate among which banks have what technology. They simply assume that all banks have decent technological capabilities, regardless of the size of the branch. And if you don’t, it’s to your peril.

Our ad recall research has even shown that although adults can correctly identify the intent of tech-focused bank ads like billboards, they usually can’t recall which bank the ad was for. So as a result, consumers are simply getting the message: banks are good at technology.  This results in wasted marketing dollars that could be put to better use on a more effective initiative. Your larger competitors are improving the image of technology within the banking industry, which allows community banks to benefit from the net impression that all banks have strong technology.

In addition, our Benchmarks show that technology is not even among the top 5 reasons people are dissatisfied with their current bank and want to switch. Responsiveness, getting the runaround, proactivity, and banking knowledge of the staff are all significantly more likely to drive away customers.  Don’t be fooled when a firm trying to sell you technology tells you that technology is the main reason people choose a new bank.  It simply is not the case. These firms ask consumers leading questions to get that answer. If you think about it, safety and security trumps everything else when choosing a bank, but people do not choose based upon that because they have the tacit assumption that all banks offer the same level of safety and security. Technology is now the same in market after market.  Our Benchmarks currently cover 109 markets and in over 75% of those, prospects see very little technological differentiation in most of the banks (and credit unions).

Market your community engagement.

Community banks are adept at moving their community engagement beyond donations to local charities and local sports sponsorships. But what happens when you are heavily involved in your community and no one knows it? One of the most beneficial marketing efforts you can have is to make sure people know about your involvement in the community.  This is doubly important in attracting the profitable new commercial customers.  Being a strong community contributor is a major reason you might be invited to compete for a company’s new line or loan.  True, no company will pay you an extra 400 basis points just because you support the local homeless shelter, but it can at least get you in the consideration set.

Market to the individual needs of consumers.

How are you managing individual customer relationships? By learning the habits, needs, and wants of your customers and prospects, you can provide better service by recommending products that are useful. Whether customers want to know how their spending habits are affecting their credit or how they can improve their chances of getting a loan to buy their first homes, when you deliver a personalized customer experience, you have the potential to outgrow your competitors by more than 100%.

Consumers don’t want to hear about the latest technology; they’ll assume you have it as a matter of course. What they want is to know that their banks can provide a reliable, knowledgeable service without getting the runaround to find basic answers. Rather than market technology, put your efforts towards a strategy that will have the best returns. Determine what sets your bank apart from others, and market that which is unique about how you do business.

There is enormous opportunity for you to grow your community bank or credit union, but it starts with knowing what existing customers and prospects think of you compared to your competitors. Take action now and request our benchmark study for your region.

2018 Community Bank Marketing Trends

Community banks are cornerstones of their local markets, and the 2018 trends in our benchmarks continue to reveal opportunities for success. Community banks must be ready to embrace changes, particularly in the realm of technology, to step up their competition with the big banks. Size is no excuse, with technology being readily available to banks of all sizes, and lack of training is not a good excuse either. No longer can smaller banks cede the higher ground to the larger banks.

In our latest Prospect Benchmark results, we have seen that the technology gap between big and small banks is narrowing. While this a result of what is happening inside the banks themselves, as the smaller banks continue to improve managed services, there is a tightening of the gap in a place at least as important: in the minds of consumers.

Below is a specific example of what I mean. In New London County, CT, retail customers were asked what they thought the technological capabilities were of all the banks they do not use. As you can see from the chart, they see very little differentiation between the big banks, the small banks, and even the credit unions. Consumers believe more and more that there is little or no difference in tech capabilities between institutions – and they are right.

Chatbots are the future of communication.

By 2020, it is expected that 85% of consumers’ interactions will occur via chatbots. As they can be accessed by any social channel, website, or app, chatbots are essential to communicating with both millennial consumers and the emerging Gen Z consumers. They can also be programmed to provide personalized answers and offer predictable information such as account balances, spending activities, and bill pay reports. Artificial intelligence is at the center of emerging trends for every industry, and banking is not excluded.  Smaller banks need to stay on top of this trend to ensure that, in the eyes of potential customers, they are keeping up with the market.

Micro-moments will determine your reach.

With most consumers checking their phones regularly as it is, your bank should be available to take advantage of customer reach regardless of when your banking information is accessed.  Many decisions are made impulsively, and it could be as simple as someone searching for banking opportunities in your area. Based on our most recent benchmark results, 47% of adults in the Northeast are currently looking for at least one new banking product.  While this percentage varies (with some counties at almost 60%), that means there is a very large amount of potential market share in play right now.  It will be up to you as a community bank to decide who will come up first in the search engine with the right answer: you or the big bank around the corner?

Cross-departmental integration is the key to success.

It’s no longer enough for community banks to rely on separate departments to reach overall business goals. To achieve success, collaboration between departments is an absolute must. With the customer experience, not necessarily the services provided, becoming the center of attention, everyone must work together to meet new expectations. This is particularly important for community banks that do not have the same upper management resources as big banks. Collaboration will be that which evens the playing field.

Over the past few years, we have seen that the quality of what I call “quarterbacking” is becoming ever more important, especially for commercial customers.  A decade or two ago, commercial customers relied on their loan officers to be the font of all knowledge.  And those loan officers very rarely introduced customers to their colleagues.  However, starting with younger business professionals a few years ago, the value of the team started growing in importance.  The commercial relationship managers who were able to display a broad team of experts – as opposed to functioning as one-stop shops themselves – started to become more successful. That is now the case, not just among younger customers, but baby boomers as well. They too see the value of a broad team, instead of a funnel leading to one person. Successful quarterbacking is now one of the major drivers of success for banks both big and small. As an added benefit, if a commercial customer sees value in the entire bank team, they are much less likely to leave if the regional manager moves on or retires.

Digital specialists are what’s missing from your team.

Digital marketing is at the forefront of 2018, and banks would be ill-advised to not invest in this industry. According to the latest benchmark results, when customers begin looking for new banking products, 55% say they start by searching on Google.  This can lead them to you or to your competition.

It is the era of social media, and if your community bank is not present on social platforms and in other digital arenas, you will not show up in searches, and the big banks will drown out all attempts at engagement. Community banks are no longer able to rely on friendly contacts that occur in person, and most consider employing digital specialists that can heighten their online marketing strategies. A digital specialist can also assist in making sense of the data that is now required to fuel a marketing strategy to effectively reach your target audience.  The most progressive banks have dedicated professionals focused on reacting to social media posts and questions, and monitoring what is happening among competitors’ customers.

The foundation is being laid for community banks to excel in 2018, but such achievement will not be realized without effort. Understanding the latest trends will be the first stepping stone towards your business growth and how you can leverage the resources available to you.

There is enormous opportunity to improve your ability to grow your community bank or credit union, but it starts with knowing what existing customers and prospects think of you compared to your competitors. Take action now and request our benchmark study for your region.

Finding Success as a Community Bank, Part 2: Marketing

Last month, we discussed the challenges that community banks and credit unions face – and even some of the opportunities they have – when competing against megabanks. One way to level the playing field is through marketing efforts. Community banks and credit unions can build a successful marketing strategy by understanding who to attract, how to reach them, and when to communicate.

Target Your Market

Understand and be able to articulate what you have to offer, then identify the types of people who are most likely to benefit from your customized programs. Market almost exclusively to your target demographic and advertise your specializations, while still recognizing that you will receive inquiries from people outside of this spectrum. Simply put, focus your marketing on the types of people who are most likely to bank with you.  In New York State, for instance, 46% of customers would prefer to bank with a “smaller bank or credit union.” (35% have no preference and only 19% actually prefer a bigger bank).

Craft Compelling Messages

As a community bank or credit union, your business revolves around more than direct deposits. Identify your selling points beyond the traditional banking needs, and advertise the larger financial picture. Create multiple messages focused exclusively on the unique elements you offer, and direct them to people who fit the profile of your most interested consumers.  According to the results of the Q2 2017 Bank Benchmarks across the tristate area, the #1 product currently being sought by commercial customers (small business, middle market, and large corporate) are retirement accounts (followed by insurance), and the #1 product for consumers are brokerage accounts (followed by checking accounts).  A message crafted around those specific needs will be much more salient to prospects than a general branding approach.

Communicate Regularly and Effectively

Establish an expectation of positive communication between your representatives and customers. Ask your customers which communication method is most preferable, then communicate via that medium. Have a purpose for each communication, but be willing to respond to whatever comes up in the discussion. Identify legitimate reasons for your managers and officers to communicate directly with your key customers. Consider using chat options for those who can’t visit a physical location.

Understanding your market is essential to a successful business strategy. You may not have the brand recognition of a larger bank, but there are services and products that can be offered that are unique to your business and location. With a focus on those you can serve best, you can attract a multitude of different customers.