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With more than 1,300 U.S. branches and a Canadian parent company, TD Bank hardly qualifies as a community bank. But the institution is trying to underscore its local-bank bona fides with marketing campaigns touting its support of neighborhood causes.
May 31 -
The Chicago-area community bank, which started in the basement of a church as a savings and loan 117 years ago, has started a series of free webinars to give people guidance to free themselves from debt.
May 5 -
Wells Fargo and other banks are testing the use of mobile devices to authenticate consumers in the drive-through lane. The pilot, designed to expedite service and improve security, serves as the latest example of a growing trend: preordering banking services via digital devices.
May 7 -
TD Bank's efforts to be responsive and natural on Twitter and Facebook have earned it a top ranking among its peers.
April 24
If you ask bank chief marketing officers how the job has changed over the years, they're likely to mention its expanding responsibilities. That goes double for the smaller banks.
At Berkshire Hills Bancorp in Pittsfield, Mass., for example, Elizabeth Mach, the vice president for marketing, plots brand strategy and produces promotional videos. She is also responsible for fixing the bank's website when it crashes, maintaining the phone system and writing the rules and disclaimer documents for contests promotions.
It's a challenge that vexes marketers at larger banks, too. "The role has become so diversified in terms of its skill set," said Chris Dods, executive vice president and marketing communications division manager at the $18.7 billion-asset First Hawaiian Bank in Honolulu. On top of the traditional advertising function, "you have to understand finance, business analytics and operations."
Berkshire Hills only recently passed $7 billion in assets. Most of its growth has come in the past five years, so it continues to operate much like a community bank, said Mach. According to Federal Deposit Insurance Corp. and company reports, while Berkshire Hills' assets have grown 160% since 2010, its marketing budget has increased a less robust 46%.
"We've gone from a community bank to the regional level, but the department doesn't expand at the same rate as all that growth," Mach said. "You always want for resources. The challenge is how you leverage the resources you have."
Judging by the record Berkshire Hills has
At least one longtime bank marketing executive believes the burden of implementing effective marketing programs on what often are shoestring budgets has contributed to decisions taken by dozens of community banks to sell themselves.
"We're living in an age of disruption and a lot of banks aren't prepared to deal with it," said Kevin Tynan, senior vice-president for marketing at the $832 million-asset Liberty Bank for Savings in Chicago. "Many CEOs have chosen not to compete."
Mobile banking has emerged as one of the biggest disruptors. But Tynan and other experts maintain the biggest problem for many small banks is that their marketing programs have gone stale. For too many, marketing remains bounded by three time-worn pillars: advertising, direct mail and public relations.
"Community banking has never had proficient, astute marketing," Tynan said. "We never adjusted to the competitive environment and now we're confronted with digital challenges."
Neal Reynolds earns his living selling customized marketing tools to financial institutions. He serves some big banks, but most of his clients are small banks and credit unions. Those bankers, he said, are busy grappling with a multiplicity of compliance and information technology issues, not to mention the day-to-day concerns of running their banks. Few are disposed to invest much time, patience or money in enhancing their marketing.
"They've got compliance costs, insurance costs, director costs and they're all going up," Reynolds said. "For years, they didn't have to market much. In a bunch of small communities, they were the only game in town. Now, they have to start marketing."
Worse yet, Gianni Giacomelli, senior vice president for marketing and product development at Genpact, a New York-based professional technology services firm, said community banks would continue to struggle if bank marketing's future is driven solely by technological advances.
"Clearly the economics are challenging," Giacomelli said. "If the transformation is purely IT-driven, smaller banks may never be able to get there."
Chris Lorence, executive vice president and CMO at the Independent Community Bankers of America, is a little more upbeat about the state of community bank marketing. He likes to joke that marketing for many small banks is defined by the LED time-and-temperature signs found outside so many branches.
In reality, Lorence said, community banks have always worked to market themselves. But now they are going to have put even more energy into the effort.
"I talk to a lot of banks, and there are many that say, 'We'll jump right on that.' But this is really important," Lorence said. "They're going to have to re-prioritize and decide where marketing sits in their go-forward strategy."
Tynan is one of those marketing executives working on a tight budget. According to its call reports, Liberty spent $621,000 on advertising and marketing in 2014, compared with $1.3 million for the $1.53 billion-asset Marquette Bank, a crosstown competitor, and $8.8 million for the $14.3 billion-asset MB Financial, another Windy City rival.
While a six-figure budget might not be enough to jump into mobile banking with two feet, Tynan said Liberty does plan to hire two people to expand its social media presence.
Social media seems like a marketing no-brainer, since it is essentially free. However, many community bank CEOs are uncomfortable with the idea of communicating on social media, since some of the posts from customers, inevitably, will be negative, Tynan said.
"They don't want to accept what most retailers have already learned: You're always going to have 5% of the people criticizing you."
Bankers' discomfort with social media is understandable, said Lorence. "If you look at social media in its totality, when do you hear about any great stories? There's always some disaster."
That said, getting active in social media is one of the first things banks interested in beefing up their marketing programs should consider, he added.
Lorence advises banks to get active in social media, given its prevalence among consumers. "If that's where everyone is, you need to be there."
Above all, Lorence said, the most important thing for small-bank marketers is to simply get moving.
"There are so many options that sometimes it's like standing in front of Baskin Robbins and trying to pick just one flavor," he said. "If you look at the spectrum of what's possible, you can get paralyzed."
