When Community Involvement Isn’t Enough
Many community banks and credit unions pride themselves on the contributions they make to their communities. This includes supporting local charities, funding scholarships, planting trees or otherwise helping their neighbors. While these great acts can certainly be their own reward, community banks also deserve public recognition for their great works. Other than the obvious benefits to the community, the contributions a bank makes to its community have two strong benefits for the bank itself.
Top 5 Banks Ranked For Community Contributions By Prospects
The first is the influence on prospects, or non-customers. Many prospects learn about potential banks from advertising or from community involvement. Our studies show that advertisement is generally more effective at raising awareness among prospective customers than community works alone. Indeed, this is why many banks set aside large budgets for traditional marketing. However, our studies also show that while ads are better at driving awareness, community contribution can be more effective at driving consideration. The latest results of the CT Bank Prospect Benchmark shows that community contribution increases prospects’ consideration of your bank by an average of 136 percent. Not a bad side effect! And for smaller banks with lower awareness, the increase is even higher.
The second impact that community contribution has on a bank’s business is on its current customers. When current customers see their bank’s involvement in the community, it can improve the esteem they already have for their bank. Our research has shown that the positive impact can increase customers’ loyalty to the bank, meaning they are less likely to leave and more likely to increase long-term spending with their bank. The latest CT Bank Customer Benchmark showed that recognition of community contribution increases customers’ share of wallet significantly with their bank and their long-term loyalty goes up by 91 percent.
Community Banks: Getting Credit For Good Work
While it is probably not a big surprise to some that contribution to the community has an impact on the top and bottom lines, many banks are not actually getting the benefit they should be. Many community banks and credit unions spend a lot of money and effort contributing to the community, but their current and potential customers simply don’t know about it. This is very frustrating to marketing and community giving leaders in some banks, and a wasted opportunity for many. It is very important to know just how much recognition you are getting for your good work, and how you can improve that ROI. The challenge for banks is breaking through the clutter to ensure your customers and prospects appreciate your contribution.
In our research, we saw that in one specific market, two community banks had equivalent amounts of community involvement in terms of gifts to charity, hours volunteered by their staff, sponsorships, etc. However, one of the two banks was rated almost three times higher in terms of community contribution by their respective customers and nearly four times higher by non-customers. While each bank did similar levels of community outreach effort, one was using much more efficient channels and co-opting partners to get the word out. Not coincidentally, the bank with the better outreach is achieving stronger growth in its customer base and on its bottom line.
The first step to getting the maximum credit (and business impact) from your community contribution is to understand how you currently stand with customers and prospects, in your specific market and in relation to your competition. We at Customer Experience Solutions are very passionate about ensuring that community banks are getting the recognition and props they deserve for their community involvement. Below, we have listed the current top five banks in each county on community contribution, as rated by their own prospects. If you would like to know your exact scores (and the ratings by your own customers), please contact us.
The second step would be to make reasoned adjustments and tweaks to the programs to see what the impact is. A bank may need to improve its community outreach to gain greater recognition, or it may need to emphasize different types of community involvement to broaden its exposure. Spring is a time of increased giving and involvement in community affairs, so recognition can go up.
The third step is to measure how much the changes have moved the needle in terms of awareness, consideration and community contribution ratings. The next wave of the CT Bank Benchmarks are in April/May, and they will show how well your bank has changed its community image since the previous wave in Q4 2016. Tracking your ratings over time will show you exactly how your community contribution, and all other marketing efforts, are truly impacting how your prospects and customers view you. This will allow you to fine tune your programs so you get the maximum benefit for the bank while doing the maximum good for the community.
So as the weather grows warmer, consider your community involvement activities – what are you currently doing? Are you sure you are getting the credit you deserve? What can you do differently? And most importantly, what you can you do to make sure your current and prospective customers see what you’re doing?