Commencement

In every town in every state, this is the season for commencement speeches. In the next 2-3 weeks, hundreds of young adults in your community will begin new lives ... some moving away from home for the first time ... many to begin writing checks for their first bills ... still others facing larger investments like college and new cars.

So, lets look a little closer:

• Young demographic
• No current financial institution
• An immediate need for checking
• Soon to have lending needs
• Psychographically loyal if treated right

Sounds like a dream customer, huh?

But how do you reach this target?

Let's first look at their needs:

ACCESS

First and foremost, they demand access. As they are likely to be leaving your community in the next 2 months, focus on online and ATM access.

COMMUNICATION

This is not your average 50 year old member. If you want to make an impression, talk to them the way they talk to each other ... text and email. It may be hard to acquire them through these means (I'll talk about an acquisition strategy in a minute), but once you have them, make plans to continue communication electronically.

EARN TRUST

This may be the smartest banking generation yet - but the bottom line is that they need guidance. Odds are that their parents don't balance their own checkbooks on a regular basis. So, as community banking institutions, we have an opportunity to tutor. Focus on financial education ... help this demo build a budget ... show them how to use online banking and debit cards to track every dollar that they spend ... demonstrate how borrowing money from someone you know is better than borrowing online (this may be a tougher sell than you think).

Target to the Right People

Many community banks and credit unions try to target students by, well, targeting students. But studies show that many Millennials start their banking search by going where Mom and Dad bank. The fact is that Mom and Dad will be the best influencers you have - and they're easier to reach. So, think about Mom and Dad's wants for their children:

• Access: The kids will be away from home
• Security: not the FDIC or NCUA variety, but some control over Jr's spending
• Peace of mind: By co-signing on an account, you can tie the parent's account into the student's. This does 2 things:

A) Mom and Dad can track spending with online banking

B) There's a safety net. If the student's account falls low one month, the parents can easily transfer money through online banking.

As the commencement speeches are wrapping up, you can commence opening their new accounts and earning the loyalty of a new generation.

Good luck,

Eric

The Wave of Indifference

It seems that every company wants to focus their marketing message on providing, "outstanding service."

Yet most places we go, we're met with a tidal wave of indifference.

Seriously, it's when you're helped by someone with a personality that the service really stands out. That's a bit sad.

Shop

Take a day and shop your competitive branches. Trust me, it'll be eye opening. Besides, the weather is beautiful this time of year and it'll give you a reason to get out of your office.

Simply ask the first employee you see about checking accounts and see how they handle it. Do they ask you leading questions that will help them make a recommendation:

• Where do you bank now?
• What do you like about your account?
• Why do you want to change?
• What kind of balances do you carry?
• Etc, etc, etc

Or do they simply hand you a brochure and say, "If you have any questions come back and see us."

You'll quickly find out which banks or credit unions will be climbing the market share ladder and which will be sucked under the wave of indifference.

Training

When I speak on this topic, I love to use a Disney example and you can too.

Last summer I took our family to Disney. My 5 year old daughter wanted to see Sleeping Beauty. That's all she had talked about for months and we finally were there. We drove for two days to get there in a van who's A/C broke as soon as we hit the Florida border. We were at the park on the hottest day on Disney record ... 115 degrees - no exaggeration. We paid a king's ransom for the privilege of baking in the "Happiest (frickin') place on earth." By lunch, my 7 year old son was actually crying, "Don't make me go back out to Disney." But we hadn't seen Sleeping Beauty yet. When it was her scheduled time, we waited in line for about an hour and a half and finally came the moment of truth...

Now, imagine if Disney staffed their parks with the same employees that ride the wave of indifference. And how upset my daughter would have been and how I might have actually strangled someone.

The reality is that Sleeping Beauty and all of the other princesses, in heavy gowns and full make-up during the hottest day of the year, where exceptional! They all were on stage and they all brought their "A" game. It made the entire experience worth while and the rest of day quickly became MUCH better - especially when it cooled down.

The point? All of your employees are on stage. And there is no way of telling what trials our customers had to face to get to our branch on a given day. We need to jump off the wave of indifference and drown our customers in positive feelings. Smiles, sincerity, and an honest attempt to help. It's really not that hard, but it's also few and far between.

Do you want to differentiate your bank or CU? Spend less time worrying about checking rewards and focus on the faces and voices that customers deal with everyday.

Happy Friday,

Eric

Life Cycle Financial Sales Training... Part II

The birth of a child is an exciting time, no doubt. Life changes so quickly. Values get reevaluated. New perspectives evolve. New priorities emerge. Yes, that one day when a child is born, much changes.

In our financial lives, the birth of the first child means you are now a "Charlie", as I call it. No longer a single individual or married couple, you are now a family.... and families have different financial needs than their non-parental counterparts. As we train bankers to develop deeper customer relationships, we include financial counseling tips that bankers can use to really make a difference in their customers' lives. For the "Charlies" and "Deltas", families with preschool aged children or school age children respectively, there are some important conversations we should be having.

Probably the most important is to review the topics they should already have mastered, learning the savings habit and taking care of their credit score. After revisiting that, we can move on to a few new topics, savings for the child or children's college education (or just savings for the child) and starting long-term savings for long-term goals or retirement. By now, this young family has some goals, whether short term goals or long term goals and they need to be planning to create that future....
We can help our customers by talking about the need for mortgage loans to buy that first home (or a bigger home as the family expands).
We can help our customers by asking if they have started participating in their employer's 401(k) plan. If not, that is the number 1 recommended savings vehicle, especially when the employer gives a matching contribution! You can't beat matching with any other investment out there. And if they are participating in their 401(k) plan, we can remind them that they can also deposit up to $6000 per year into their own IRA plan and build an additional retirement nest egg. When our employees are well-versed in the IRA rules and regs, they can talk to many customers and help them plan an annual contribution program ( of course, customers should consult with their tax advisor regarding deductibiity).

If we are helping our customers move through each life cycle stage with just a few of the basic financial planning tenets in place, we will know that we have not only made a difference in their lives, but that we have developed a loyal customer as well.

Next time, we'll look at how we can be helping our "empty nesters" and retired "foxtrots" also.

Are you including life cycle financial selling in your basic bank training? If not, we can help. If so, please let me know what you do. If you are passionate about financial education like I am, please email me at slovejoy@marketmatch.com.

Until next time,

Sharon

Marketing Through a Recession

One of the fundamental tenets of marketing is, "Those companies that emphasize marketing during a bad economy recover faster and emerge stronger when the economy improves."

It's been proven time and again through case studies in numerous industries, but when it's YOUR institution ... facing shrinking spreads and changing regulations ... the gamble seems awfully risky. If only we had some apples-to-apples statistics to prove it...

Thanks to a Callahan and Associates article released on May 10, we now can base our marketing decisions on relevant data.

This study looked at the marketing expenditures of 645 credit unions and segmented them by:

• Institutions that decreased marketing expenses
• Institutions that kept marketing expenses relatively flat
• Institutions that increased marketing expenses

The study then compared these groupings based on factors like: loan growth, deposit growth, checking growth and member/customer growth.

Click here for the actual article

The bottom line is that those institutions that increase marketing are more likely to experience:

• Higher loan growth in all areas (except mortgage). In fact, those that increased marketing were the ONLY group to experience positive auto loan growth.
• Higher checking growth
• Higher IRA growth

With the onslaught of negative media towards the "Too Big to Fail" banks and the positive national coverage of credit unions and community banks, the environment is better today than it ever has been for you to position yourself for growth. You don't necessarily need a big bank budget to take market share, you simply need to make yourself part of the community conversation.

Awareness and differentiation can drive growth. And when you partner with a marketing firm with a ROI Guarantee, there's nothing left to chance .. and the upside is positioning your institution correctly ... moving forward with expert help at your side!

Inset is a chart from the referenced CreditUnions.com article

The tide will turn...

Good morning and HAPPY MONDAY to everyone....

Thank God its Monday!

Today really is a good day.  Sunny, not windy and will be getting warmer...plus my daughter is getting back to a good plateau in her health!

Now, for the update...later this week, we will be launching an exciting new service for bankers around the country and the timing is based upon my belief that the tide has begun to turn and there are plenty of bankers that are looking to charter a new course and the investment community is seeing the opportunity, too.

De novo banks typically open in areas where a void has been left or created.  Closed banks, merged banks, growing markets...all ripe for a de novo bank.  With many execs displaced in mergers, the executive operational talent and drive to start a bank is richly available. 

Here is a chart of de novo bank start-ups in the last couple of years.  You can see they have fallen, but the rise is about to occur.  MarketMatch will be there to help with our expertise and focused assistance!

As you can see, there are parts of the country that flourish with de novo bank openings... keep your eyes open for our announcement later this week.

Have a GREAT MONDAY!

Bruce

Reg E Realities

Reg E ... Everyone's in a panic ... it's the End of fee income as we know it ... all Eyes are on Marketing to make it better.

Sounds like the Y2K scare a bit, huh? My bet is it's probably as credible.

The reality is that Reg E will effect less than 50% of your existing NSF income (debit and ATM only). And the 50% that's at stake, is driven by about 12% of your customer-base.

The trick is to target those heavy overdraft users and make sure they opt-in.

From a communication stand-point you need to:

• Educate: Stick to the basics of: what an overdraft is and what will be different on Aug. 15 than today.
• Motivate: The customer can make an informed decision if you provide examples of how fees will apply and when a card will be declined. Do they want the chance to buy a $30 cup of coffee, or do they want their card declined in the busy grocery line?
• Get a Response: Make it easy. Include a form with self-address and indicia in your customer letter. Make sure your front line staff know your heavy users and are pushing for a response in the branch and when the customer calls in. In the last 2 weeks, divide your heavy user list between your personal bankers and have them make outbound calls (provide a script).

The more heavy-users you can get to opt-in during the next 3 months, the less impact this reg. will have on your institutions bottom line. Come January 1, we'll all look back and wonder what the big hoopla was all about.

Has your institution maximized it's investment in an MCIF?

Does your institution have a MCIF?

More importantly, if so, is your institution getting the maximum return from it's investment in an MCIF?

So often, the individual that championed the initiative to select an MCIF vendor and bring the technology in-house moves on to find a "new challenge." When this happens, it is not uncommon for the MCIF to set idle as no one else in the organization "steps up" and assumes responsibility for making the MCIF an integral part of the organizations marketing strategy. Consequently, the data doesn't get refreshed on a timely basis, management forgets why the investment was made in the first place, and finally, the system that houses the MCIF sits off in a corner someplace in the office "collecting dust."

If this has happened in your organization, the organization is missing out on a great opportunity to retain and strengthen existing customer relationships!

Let's assume you have an MCIF and it is being updated in a timely manner and you are using it to retain and strengthen existing relationships.

Have you taken the next step to maximize your investment in an MCIF?

Retaining customers and strengthening relationships is only "half the equation." In order for your organization to grow and prosper, you need to bring in new households.

Appending a segmentation code to every household in your database allows you to better understand the type of customer your institution serves. It allows you to see the types of products that they have a propensity to purchase, the channel they use to purchase those products, balances they are likely to bring when the product is purchased, etc.

Utilizing segmentation also allows your organization to find prospects that look like your most profitable customers, provides information on the best product to offer to initiate the new relationship, tells you the best media to reach out to the prospects, etc.

Bottom line - if you have an MCIF and aren't using it, get started. If you are currently using your MCIF to retain and strengthen relationships, but haven't appended a segmentation scheme, get started.

The April "Brown Bag" webinar was on "Segmenting Your Market." If you were unable to attend this session, contact Bruce Clapp at MarketMatch and he can email you the presentation complete with the Q & A that took place.

Have a great week/weekend!

Mike Witsken

Train Your Bankers to Talk to Gen Yers

Since the financial meltdown on Wall Street began in 2008, I have believed that we all, as bankers, could have done a better job of advising our customers in sound financial principles.
We talk about "selling" to our customers, and we measure our "cross-sell" ratios, and these things can be good objectives. But has your bank intitiated a training program for your front line people about how to advise your customers on basic financial topics? Shouldn't this be part of banking's "customer service" concept?

Today, I would like to talk about the new, young Generation Y group. These may be individuals just starting out on their own, or young married couples just starting a new life together. Their financial needs are different than other generations. Do you train your staff in how to talk to them?

For example, Gen Y looks at the world differently since they have grown up in the information age and are incredibly knowledgable and comfortable with things like the internet, computers, online anything, cell phones with many functions, and instant access to anything they want.

Yet they still need basic financial lessons. How many young people today get good financial literacy at home or at school? Not many. So, a couple of basic lessons we could help them with would be saving and managing their credit score.

I teach lots of bankers about cross-selling, but I always talk about how to really help customers with the financial needs they have based on their life cycle stage. Basic financial needs really are predictable based on where you are in your life stage... For example, these Gen Y'ers could be offered a suggestion like: "We recommend to our customers to save 10% of your take-home pay... is that something that we could help you get started with?"

Or how about "Managing your credit score is really important in today's world... have you established any credit in your name yet? How has that gone? I can share some ideas with you about managing your banking that will help protect a good credit score or help you improve a weaker one. Would you be interested?

In our Winning Team Training program, we then go into detail and examples of how to have these conversations, what options to offer, how to continue to connect with this generation in selling the related products and services, like online banking, mobile banking, and more. There is a "right" way to talk to them that lets them know you "know who you are talking to". It can make a huge difference in their loyalty to you and a huge difference in their financial lives....

After all is said and done, bankers can be the unsung heroes to our customers, if we are well-trained, if we take opportunities to be financial advisors, and if we are alert to each major group of customers and their life cycle financial needs.

I will discuss more about the "Charlie's" next time. Those families with children and how their financial needs are different and how we should be helping them.

Until then, think about your financial institution's sales training programs... are you addressing the real financial issues your customers are concerned about or just training to "sell"?

Email me your concerns or issues at slovejoy@marketmatch.com.
Happy Tuesday!
Sharon

Its May...

Can you believe it? Its May!

May marks the true Spring into Summer connection.  The spring weather is heating up (shout out to our friends in Arkansas, Mississippi and Tennessee to be safe!!) and the weather can be unpredictable.  You know that summer is coming and we just have to be patient and wait for it.

However, you SHOULD NOT be patient and wait for customers to heat up, be predictable, and come to you.  With the Move Your Money action is full force...even it is not visibly active in your market...it IS in your market!  People are reconsidering their relationships and you have to put yourself on the "radar screen" of your marketplace.

Three tactical actions for you to do THIS WEEK:

1. Segment your top customers into three categories (in person, phone, mail) of contact you should implement in May and reach out to each!
2. Provide a list to each banking office of 100 prospective new HHs
3. Review your progress toward your 12/31 organizational goals

Take inventory of your position and make the small changes needed to realign your progress with the goals, in anticipation of your June 30 mid-year review.

The key?  Plan, review, plan, review...and implement in each interim step.  Remember, the key is the alignment between the plan and implementation with the results!

Cheers!

Bruce