The financial group in question has long been doing car leasing, but has acquired a banking license to do car loans. Deposits are needed to fund the loan business. However, it's very hard to build a considerable flow of leads for deposits as the surveys show that the customers are wary of pitting their hard earned cash into an unknown bank. What should be done to attract more customers?
You have asked the golden question. As a business banker, we all struggle with getting deposits. Going after key industries (escrow companies, property management, HOA's, etc) will help in this. However, there are many options to help get deposits. I'd be happy to hop on a call and talk about this. I just signed up with Clarity yesterday. So I'm still learning the platform.
There are a few things you can do to help build trust to get new deposits:
1. Inbound marketing, you need to create a strategy for the long haul to build value and set yourself up to be more than just a bank. This deserves it's own question and answer.
2. Make sure to promote your deposts are FDIC/NCUA insured.
3. Many people were leaving big banks for some of the business practices they engage in, trying to focus and highlight that you are different, that you don't do what other banks do and take care of your customers will help you attract those looking to switch.
4. In addition to having basic banking features, you need to deliver additional convenience features that most banks offer now - online banking, mobile deposits, fee-free ATMs, etc.
5. You really need to figure out your ideal target market, find something niche you can focus on and attract them. Without a huge marketing budget, trying to market yourself to general public will not yield results. If you focus on a niche target market, identify their pain points with banks, and then try to offer an alternative that fixes those pain points will get you those customers. Once you get more customers, word of mouth will spread and you will be able to compete to a wider audience.
6. I understand the reasoning behind getting deposit customers, to fund the loan business, but that's not going to help you get AND keep customers. You do need to be a good bank, with good customer service, with a good portfolio of features.
If you get one thing out of what I wrote, that should be this: Figure out what your ideal target market is, identify their pain points with banking needs, and position your bank to fix those pain points. You might want to start with your local neighborhood, and work from there.
Here's a quick anecdote for you.
We recently moved from a bedroom community to the city. I bank with a large bank for all the conveniences they offer - even though they are expensive. My wife was with a local credit union because they were free and provided a local warmth she appreciated.
She now had the dilemma of switching banks. There was not a credit union nearby. So, she used Yelp and found all the nearby banks. She chose a small one because they offered free checking and other no fee services.
Within 90 days she left that small bank because their service was horrible. She could not bank on Saturdays, weekday hours were not extended as the large brands were, and each teller interaction was slow and not always courteous or respectful.
Hopefully that story proves to be a case study for you. She is representative of many banking customers.
Now, here are some things to consider.
1. Hire a field sales rep.
Have them visit every small-medium business in your community. Build a relationship with the business owners. Create a customized banking solution for all the employees of that business. Maybe offer to provide branded debit cards with the business' logo on it.
Maybe offer discounts on certain closing costs for loans if the employees bank with you?
Consider bringing pastries or other food or drinks to businesses if they have a staff meeting where you can address the employees. Your pastries and short promo talk would break up the monotony of the regular meetings.
Hold community events regularly. Become known as a warm, friendly neighborhood bank.
Do the same approach with the chamber of commerce, rotary, elks, and other organizations in the area.
Basically, take the paradigm that national brand banks are not your direct competition, the credit unions are.
Now, I am not an expert in the banking industry and do not know the rules and regs that might hinder your marketing. But, in addition to what Viktor said about FDIC and several of his other comments, provide over the top service, and position each branch as the neighborhood community bank.
I do provide free consultations to first time callers using the link below. If you would like to set up a 30 minute call, I'd be happy to get more details and provide more ideas.
Best regards,
Kevin McCarthy
www.kevinmccarthy.com
https://clarity.fm/kevinmccarthy/FreeConsult
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By 2015, community banks had returned to pre-crisis levels in terms of noncurrent loans, net charge-offs, and percentage of unprofitable institutions. Core deposits became stagnant over a three-year period for community banks with less than $10 billion in assets. Since then, the COVID-19 pandemic has created several new challenges for financial institutions. Local banks and credit unions increasingly need to execute effective marketing strategies to reach their target audiences. This guide provides strategies for reaching prospective customers/members to increase core deposits. At least for transactional banking purposes, many customers cannot remember the last time they walked into a physical bank. And while national banks enjoy widespread brand awareness thanks to enormous marketing budgets, awareness of community banks and credit unions in their local market is typically about half that of megabanks. To attract and retain depositors, local banks must adjust how they engage customers and differentiate their brand.
1. Local search engine optimization ensures prospects will find you online
You may be the closest financial institution, and you may have the best rates for your deposit accounts, but if your competitors are dominating the top organic positions in Google and Bing search results, then you are missing out on new customers. Utilizing these local SEO strategies will also make it more likely for potential customers to find you through Google searches and business review sites. These strategies are generally useful for increasing your online visibility to a local audience and will yield long-term results.
2. Use multiple marketing channels to reach your desired audience
Part of your bank marketing plan should be to identify the consumer and business personas who can significantly help you grow your deposits, then develop a multi-channel strategy to reach them. Once you have mapped out this information, then you can design your bank deposit marketing and outreach plan accordingly. An important consideration as you create your desired customer profiles is to research what you think may be attractive to your audience. Once you know who you want to reach, integrated marketing strategies that include multiple touch points from direct mail, video, website content, email, print, and digital ads can help you grow deposits from existing customers and convert new customers to boost your bank’s deposits.
3. Use paid search marketing to your advantage
In 2019, it has become the norm for potential customers to turn to a search engine to research a product or service before they decide. This much is obvious, but many financial institutions are not leveraging the full potential of their online presence with an effective search marketing campaign. By utilizing strategies like pay-per-click advertising using tools like Google Ads, community banks can push past their competitors and gain prominence at the top of the search engine results pages. If you plan to enhance your online presence with paid ads, your best bet is to partner with a digital marketing agency that is experienced in helping banks grow.
4. Leverage social advertising to target prospects and existing customers
Many financial products are designed to assist people throughout the various stages of their lives – higher education, relocation, purchasing a home, starting a family. Social media platforms offer powerful targeting tools that allow you to deliver highly focused ads to a specific audience based on their interests and lifestyles. Couple this with a comprehensive understanding of your audience, and you can create social media ads that drive highly qualified traffic to your site. This targeting also allows you to create ads that are tailored to the needs of your specific audiences. You can further narrow your targeting to a specific list of customer email addresses.
5. Deliver customer service that is both friendly and educational
Now your community bank is competing against larger banks as well as online-only financial institutions for highly sought-after customers. Identify the customers your bank would like to attract and try to understand their banking lives. For example, busy people may not want to go through the hassle of switching their checking account, so you do not want to lead with checking account marketing strategies. On that note, make teller outreach a core part of your internal marketing strategy. In the era of direct deposit and mobile banking, customers do not have to visit a physical branch. This is often what distinguishes a community bank from larger, more impersonal institutions. When it comes to high net worth customers, pick up the phone and get personal. Remember you are not the only bank trying to woo potential customers or sell additional products to existing customers.
Besides if you do have any questions give me a call: https://clarity.fm/joy-brotonath
