Did we just use the “R” word? The National Bureau of Economic Research isn’t yet ready to declare one, but there’s no doubt that both businesses and consumers have the possibility on their minds.
Is that kind of anticipation changing consumer behavior? More importantly, should it be changing yours?
As a financial marketing professional, you are tasked with stretching every dollar of your marketing funds in the best of circumstances. At the cusp of a possible recession, the temptation is certainly there to pull back. But, our view is that it’s also the most powerful and cost-effective time to build a deeper relationship with your customer base.
In the course of our own experience with financial institutions, we’ve identified three steps you can take to maximize the impact of your marketing dollar during uncertain times:
1. Make sure you’re talking to the right people.
Audience Intelligence can eliminate waste and focus your marketing dollars where they can do the most good. We offer our clients an array of proven tools they can use to systematize and optimize the impact of their marketing spend.
How well do you know your audience—today? Be sure you have an updated plan to study the demographic data in your specific market. How has it shifted in the past few years? Where are people living and working today? Have commuter and traffic patterns shifted as workers return to the office part-time, if at all?
Develop a way to measure and quantify not just the demographics of your community, but the personality traits, beliefs, and fears of those engaging with your brand and website.
There’s never been a more important time to truly understand—and measure—who you serve, holistically. Develop a measurement plan to reach those in your community with the greatest chance to choose you, and prioritize investing in helping them do so.
2. Develop messaging that can speak to more than one segment.
That kind of efficiency in your marketing spend can yield both short-term and long-term rewards.
We helped one of our clients, a regional credit union, identify a messaging strategy that proved to be deeply meaningful for both older customers and Gen Z, by focusing on their commonly held values and beliefs.
When the credit union first came to us with their marketing challenge, the ask seemed contradictory. How could we grow traditional deposit investments and continue to reach an older core demographic, while also reaching new, young movers to the area that were arriving post-COVID and for the first time, developing their own financial identity?
Fortunately, we were able to dive into their data and leverage our deep understanding of the customer base. As a result our team was able to concept a campaign featuring these youthful consumers in scenarios that aligned with the values of the older audience.
The result was a campaign featuring messaging that looked and felt “young,” while speaking to the key similarities in values between younger and older segments. This particular client was able to generate a 22% increase in web traffic for those interested in home purchase in key geographies, and a 117% increase in new deposit value (88% funded by new members).
How can you achieve the same sort of efficiencies for your financial institution? The answers lie in your customer data, and implementing the right tools to help you identify them.
One of the things we offer our clients are tools that look closely at consumers’ financial behaviors, core beliefs, values and what keeps them up at night. Tracking and trending not just new customer data, but understanding how consumer beliefs are impacted by what is happening around them, can help you develop and curate your own regional identity that feels far less ‘corporate’ than big-box competitors.
The kind of insights delivered by our tools in turn aid creative teams in developing the kind of powerful, memorable messaging that will resonate with your customer.
3. Be consistent with your efforts.
Turning off the faucet costs a lot more than you think. Because when your marketing efforts resume, you’ll be coming from even further behind and will have to expend more effort and money to return to your desired growth path.
As tactics are turned on and off, consumers lose confidence that your brand can meet their needs, and they can become more confused in what differentiates you from your competitor. This, in turn, can lead to a slow deterioration of awareness and preference in your market, and can undercut your financial goals of building growth and trust.
In recessionary times, as consumers settle in for more “entrenched” strategies and become less trusting of new entrants into their market, there is substantial risk when your institution delivers an inconsistent brand message.
Even with consistent product-level market investments, share of search (the bread and butter of new account creation) can continue to decline without a robust, consistent awareness effort, leading to a slow erosion of market position and again, requiring a greater investment to return to baseline levels.
It can be tempting to ‘declare victory’ after reaching a significant milestone or KPI—or to focus on specific promotional efforts that offer more of a quick ‘provable’ than a core brand identity. But there is a real cost to failing to invest in your brand over the long-term, especially in tough economic times.
The wolf is at the door. No, actually, he’s in the App Store on your customer’s smartphone. The same disruptions that have faced other industries across the American economy are now facing financial markets, with new, digital-exclusive entrants competing for a share of your consumers’ minds and wallets. If there were ever a time for customers to understand your complete brand proposition, it is now.
Creating an on-off approach towards brand presence and identity has not just a cost in the hearts and minds of your community, but it portends a slower, more expensive ramp-up to re-entry.
Economic headwinds create challenges—but they also create opportunity.
A recession has a funny way of giving consumers a laser-focus on what’s truly important in their lives. Changing economic conditions offer new opportunities for you to reduce their worries, and introduce yourself to people who are suddenly thinking about financial situations in new ways.
They may look to increase savings goals, or might be moving to accommodate new jobs. What new services or programs could you offer to demonstrate that you are thinking about their needs?
What about YOUR concerns?
Economic downturns also place new pressure on financial institutions. Everyone in our industry is keeping the blood pressure medicine handy these days. Given the recent challenges presented from the Silicon Valley Bank collapse, investor pressures, and accountability for growth and marketing investment, financial institutions are hardly immune to concerns about economic downturns.
It can sometimes feel that these pressures are at cross-purposes—how do you manage to meet consumer demand and ease the financial burdens of your customer base, while intelligently facing your own institution’s challenges?
As costs to acquire new customers rise along with interest rates, brands that can establish a clear position on who they serve, develop efficient messaging strategies and measure their effectiveness, and can measure the value of their brand investment will be well-positioned to build confidence—and gain market share—in their communities during this period of economic uncertainty.