Let’s face it – banking is traditional and an industry which isn’t that receptive to change. Still, like any other sector, banks have challenging goals.
And today, more than ever, they face stronger competition and more demanding customers. Banks need to flexibly adapt to the new reality while still maintaining necessary levels of control.
Banks and customers want value and sustainability
The brand names of financial institutions or their attractive interest rates are hardly sufficient anymore. Customers want propositions fully tailored to their specific needs and expectations. At the end of the day, both customers and banks are looking for valuable and sustainable relationships.
Banks need to be highly relevant to appeal to each individual customer
Banks need to market efficiently by flexibly aligning their offers with customer expectations. Different products, customers, discount variations and channels can produce a number of combinations which is mind-boggling. And no common proposition fits all. Targeting the right product at the right price through the right channel to each individual customer is the only pragmatic approach. A proposition can thus become relevant and have the opportunity of being considered and hopefully accepted by specific customers.
Banks need better tools for tactical and strategic decision-making
Marketing executives are called upon to craft the marketing strategy to act as an enabler for the business strategy. Marketing executives are constantly puzzled by important business questions like ‘what should be the targets of the annual operating plan?’, ‘how much should this year’s top lines be increased?’, ‘how much money are we losing through revenue leakage?’ or ‘where is revenue potential hidden?’. At the same time, marketers must adhere to compliance guidelines and respect legislation constraints. Factual answers must be found both on tactical and strategic levels.
Banks need to market more efficiently and precisely
Compared to the past, marketing budgets and marketing departments are shrinking. Marketing teams now have to spend ‘just enough’ to avoid either over- or under-budgeting. Above-the-line advertising is far from efficient any more. Only ‘right for me’ products and services are relevant to customers today. Marketers are forced to do more with less, utilize their resources efficiently and ultimately operate optimally while balancing growth opportunities with restrictive requirements.
What are the right marketing optimization tools?
Banks can use tools that lead them down the path of optimization. But that path is by no means a clean, straight line. Customer segmentation, propensity to purchase, churn prediction, and many more analytics capabilities are indeed at arm’s length. However, they remain to be capabilities that rarely provide the holistic solution that the bank needs.
Although technology and analytics are progressing in leaps and bounds, they are not yet fully aligned with the expectations of marketers in banking, who are looking for complete answers from integrated solutions, not pieces of jigsaw puzzles that have to be put together.
Marketers in the banking sector are more challenged but also more empowered than ever before. Like everybody else, they want to do more with less; less effort, less time and less money, and get more results. That’s what optimization is all about.
New forms of competition, market volatility, legislative constraints and the pressure for higher efficiency have been tough challenges for the banking and financial services sector. Depending on the viewpoint, these can be regarded either as challenges or opportunities, for banks and customers alike.
What are your thoughts on marketing optimization for the banking sector? Feel free to share and add your comments below.