Survive to Thrive: Top Ten Initiatives Community Banks Should Consider in the Second Half of 2020

Mid-year is the traditional time to check progress toward your organization’s goals and to adjust plans accordingly. It is especially necessary this year, as community financial institutions around the country have necessarily shifted their planned focus to accommodate for the challenges brought on by the Covid-19 health crisis.

As we enter the second half of 2020, is your organization transitioning out of reactionary mode? Are you able to resume a focus on the goals established for the year? Do you need a proactive return to campaigns and marketing efforts to boost year-end performance? Then we have some suggestions for you.

We’ve identified the top ten initiatives you should consider for the remaining half of the year:

1 - Research customer needs and preferences
Behaviors and attitudes have changed significantly during the pandemic and it’s important to understand and respond to customers’ needs. From April – May, 2020, eCommerce grew from 16% to 27% of total retail spend (CNBC). Only 40% of consumers say they are likely to return to pre-pandemic methods of banking. Leverage surveys, as well as conversations with your key customers. Stay in touch and continue to emphasize friendly, personalized service. Analyze your MCIF data. Keep an eye on balance shifts, channel usage, etc., and then be sure to leverage that data to provide your customers with relevant and proactive advice, contact, and solutions that meet their needs.

2 - Encourage digital adoption
April 2020 saw a 200% increase in new mobile banking registrations and an 85% increase in mobile banking activity (Source: FIS). So much of the way individuals and businesses get things done has now been shifted to digital channels, and it’s important to understand that the customer’s experience with your digital channels is, increasingly, defining how they think of you. Not surprisingly, regional and national banks have taken this time to place heavy emphasis on promoting their online and mobile tools. PNC Bank, for example, has seen its sales via digital channels increase dramatically since January, to a point where, in April, they accounted for 75% of the bank’s total sales. What should you do? First, promote your digital and online solutions! Remind customers about the availability of those tools and the broad range of services you provide. Emphasize exactly what the customer can do using these tools. Promote all of your convenient services – but be smart in your targeting, and don’t just blanket everyone with the same messaging. Introduce customers to the broad range of electronic services available with their accounts and how easy and accessible those tools are. Second: Make sure you offer the best digital customer experience available to you. Think about your online account opening experience or loan application process. Can your customers reach you to answer questions and resolve issues? Now’s the time to make it a priority to investigate alternatives and develop a plan to improve your digital channel experience.

3 - Expand on the Paycheck Protection Program relationship
The SBA’s PPP loans offered a lifeline to many small businesses who were in dire straits as a result of the pandemic. It’s no surprise that community FIs played a vital role in helping small businesses get the funding they needed. We applaud the banks and credit unions who have made these efforts a priority – and now that the Loan Forgiveness process is underway, it’s time to take the next step to nurturing these customer relationships. Some of your PPP Loan clients may be new to your business checking offering – be sure to tell them about the account and its benefits and features. Look at the loan program as not a solo effort, but as one piece of the pie in terms of the expertise and support available to small businesses, then develop a program that continues to promote the tools, resources, and accounts available that makes your FI a valued financial partner and friend of local business. You might also wish to consider a full-on business campaign to target new business prospects by leveraging your FI’s PPP performance. Many small businesses expressed dissatisfaction with large banks during the PPP process, and they felt let down or overlooked by the larger financial institutions that lacked the local commitment and expertise of a community bank. Never before has the benefits of local expertise for local business been more evident.

4 - Talk about your brand
For many community FIs, providing assistance to their customers and community was a primary focus during the second quarter… but it’s up to you to spread the word! Highlight those wins and showcase your commitment to those you serve in your messaging – whether it’s limited to social media or as a full-blown campaign. We helped one bank client develop a campaign to emphasize their local involvement and its impact. The campaign included the development of a custom microsite, billboard advertising, email promotion, and social media content to highlight the bank’s efforts to support the people, businesses, and non-profits in the area. The campaign also invited the bank’s business customers to be included on a local business directory as a sign of the way that the bank honors and provides value to their business customers. This directory provided community members with a variety of local businesses to patronize and support during these times when they are most in need. On a smaller level, but one every bit as beneficial, don’t be afraid to toot your own horn sharing your PPP highlights – even showcasing the number of jobs positively impacted by the funds secured via this program  translates your commitment into a tangible number.

5 - Restart customer expansion
It’s understandable if you pressed pause on these communications, but now is the time to restart your efforts to expand customer wallet share. Revisit your calendar for the remainder of the year and, if necessary, reprioritize your efforts based on your evaluation of your current household relationships and goals. And use customer balance and account data to identify potential behavioral triggers that imply a change in the customer’s financial situation due to the pandemic. Customers nearly always state that they want their bank or credit union to offer suggestions proactively that will have a positive impact on their financial situation.

6 - Emphasize financial education and budgeting
Research has shown time and again that when a person has a greater understanding of financial basics, they are better able to make smarter decisions with their money. Being money smart is increasingly important during a period when many people are struggling with the financial impact of the pandemic. Start by developing meaningful content that is applicable to the current state of the world (look at Dave Ramsey, who is producing a wide range of content these days). If your bank has online budgeting tools or calculators, promote them as a means by which customers can better manage their money and stay on top of their finances. Consider developing a webinar series or host live Q&A sessions via Zoom or Facebook Live. We worked with West Michigan-based credit union, Arbor Financial Credit Union, on their Rebound campaign. One key component of this campaign was a landing page featuring a list of tips for members to get more from your money during this period.

7 - Emphasize Mortgage and Refi opportunities
It’s likely that your mortgage department has stayed pretty busy over the past few months, even without intentional marketing messaging. Many banks and credit unions are still experiencing high volumes of applications, so it makes sense to continue to strike while the iron is hot. Consider tailoring your messages to the different customer needs we are seeing in the marketplace. For example, refinancing to consolidate debt or to lower payments to improve monthly cashflow, or to cash out equity, or to accelerate pay off. Careful analysis of your customer data will help to define very targeted segments to reach, improving overall marketing ROI.

8 - Offer advice on retirement Planning and Investment
For many, the fluctuating roller coaster of their 401(k) savings this year has been overwhelming. People are wondering how to pick up the pieces of planning for the future and may not be sure how they can salvage their plans for retirement. Overwhelmed by client calls and perhaps experiencing their own state of depression caused by tumbling and volatile markets, many brokers haven’t been able to reassure their clients with timely and tailored advice. Banks and credit unions have an opportunity here to step up and provide guidance and trusted expertise to mid-tier investors.

9 - The community bank difference
Let’s face it: There’s probably not a single one of us who remains unchanged by the events of the last four months. Some people have been hunkering down at home and truly have been quite isolated during this time. We have entered what sociologists are calling the “Isolation Economy.” And while consumers are choosing digital channels more frequently, they do still prefer humans over machines when advice is needed.  Social distancing has resulted in skin hunger for many and while we’re not advocating that your tellers dole out hugs and handshakes, it’s beneficial to consider your customer experience and to make sure interactions are personable and friendly – perhaps even more than usual.

10 - Acquisition is possible
If your competitors did little to nothing to support their customers through the last few months, remember: Those customers saw their FI’s true colors and those customers may be more primed than ever for a switch. An aggressive acquisition campaign is not off the table during this time. While your competitors’ efforts have quieted, this is an advantageous time for you to execute a highly targeted direct mail campaign effort. Studies of the marketing activity of financial institutions during the 2008 recession show that those maintaining or increasing their budgets during that period significantly outperformed peers and saw sales increase by an average of 6.5%. Though many companies have shifted to a strictly digital approach, there are numerous studies highlighting the advantages of using a multi-channel approach in your efforts.

Once you determine the approach that best aligns with your organization’s goals, put a plan in place and get started. Your FI has provided an excellent and necessary resource over the past several months, and with some planning you can leverage your efforts and resume forward motion toward accomplishing the goals established for 2020.