Zions Bank Continues to Improve Onboarding Process by Expanding Channels and Touches

Instead of simply sending a single letter to new account openers to thank them for their business, Zions Bank has expanded their onboarding program to include a 30 day 'engagement' mailing and a 60 day 'cross-sell' mailing. In addition, they utilize their centralized call center for follow-up and reach all new customers with email to reinforce the written communication. This integrated focus towards new customer communication has resulted in a significant reduction in new customer attrition and enhanced cross-sales of services.

Segment Your Customer Base For Reg E Communications

The recent changes to Reg. E, impacting how financial institutions can levy fees for overdrafts caused by one time debit card or ATM transaction, have created a period of both challenge and opportunity for financial institutions. Due to the almost certain negative impact on a bank’s fee revenue and potential customer confusion about this new regulation, it is important to be able to effectively and efficiently implement these new requirements, maximizing account holder opt-in responses while providing a positive customer experience.

In this month's ABA Bank Marketing Magazine, Robert Giltner from Velocity Solutions suggests that financial institutions should start their communications process with a mass mail and email campaign to all customers explaining the new regulation. While I agree that all customers should be provided a clear understanding of their options, I don't agree that an all encompassing direct mailing should be done from a cost perspective.

Every customer should not be treated the same. Research shows that while most customers do not like the fees associated with overdrafts, there is a percentage that rely on overdraft coverage to meet current expenses or avoid embarrassment caused by inadequate record-keeping. To achieve the highest possible opt-in response at the lowest possible cost, I believe a segmented and integrated communications process should be used, leveraging multiple communication and response channels and focusing resources where they will have the greatest impact.

Instead of treating all account holders the same, most financial institutions I have talked to will be communicating most aggressively to the 10-15% of the customers who have the highest incidence of overdrafts, connecting with those households that the FDIC found to be the highest users (and fee generators) in their 2008 Study of Bank Overdraft Programs.

Some firms are even trying to determine which owner on an account is responsible for the majority of the overdrafts. By using all available communication channels (direct mail, statement inserts, email, POS, phone, and branch level communication), banks are hoping to communicate the benefits of opting-in to the customer, thereby minimizing the fee income impact of the regulation while improving the customer experience. The majority of the customers who do not overdraft their accounts will be more efficiently reached using a series of statement inserts, statement messages, branch level POS, ATM messaging, email, etc as opposed to postal mail.

I believe the most difficult challenge may be after the regulation takes effect in August, when customers who were not frequent overdrafters experience their first rejected ATM transaction or debit card purchase.

Ten Steps to Onboarding Success

Later today, I am presenting at the Oregon Bankers Association 105th Anniversary Convention at Sunriver Resort on the topic, Stemming Attrition and Building Relationships Through Effective Onboarding.

In addition to sharing recent statistics from J.D. Power and Associates around the positive impact of increased attention early in a new relationship and the positive impact of using multiple communication channels from case studies across the banking industry, I will be sharing the ten key steps to onboarding success that I have seen over the past five years.


These ten steps are:

1. Acquire the right customers: The most important component of a successful onboarding program is to acquire customers that have a greater liklihood of future value based on modeling and geographic targeting.
2. Communicate early and often: The sooner you can build dialogue with the customer and the more often you can connect in the first 90 days, the more successful you will be in retaining and building relationships.
3. Integrate across multiple channels: Reaching out to the new customer using phone, direct mail, email and personal 1:1 communication will greatly improve the success of an onboarding program. We have seen lifts of 25-50% when multiple channels are used.
4. Build in learning from day one: An onboarding program should not run on auto pilot. The competitive environment, customer behaviors and transaction trends change all the time. Your onboarding program also needs to adjust on a dynamic basis.
5. Engagement is key: Cross-selling the new customer should not begin until after you encourage engagement with the new account. This can include direct deposit, online banking and bill payment, autosave, credit utilization, debit/credit card utilization, etc.
6. Build a cadence of communication: A successful onboarding program uses a sequence of communication to improve the customer experience by helping the customer understand their new account, get to know the bank brand and eventually build trust and a stronger relationship.
7. Develop personalized offers: Once the customer has demonstrated a satisfactory level of engagement with their new account, offers targeted to the specific needs of the customer should be communicated.
8. Use a test and learn mentality: Testing should always be done with an onboarding program to determine the right offers, timing, channels and cadence for each customer segment.
9. Measure results: Results should be measured consistently against a control group. Common metrics include changes in attrition, engagement, cross-selling, balances and satisfaction on both a customer and household basis.
10. Provide a single point of responsibility: Since most banks do not have Directors of Cross-Selling or VP of Retention, it is important to assign the onboarding process to a single person who will 'own' the development and impact of the onboarding process. This person will work with segments, product managers and marketing teams to ensure the success of your program.

There has never been a more important time to develop a successful onboarding program. With fee income being attacked by Reg E and net interest margins at historical low levels, it is imperative that financial organizations attract and keep customers with the highest potential lifetime value.

Onboarding Communication - How Much is Too Much

As I discuss multichannel new customer onboarding program development with financial organizations, it doesn't take long before the client asks about how much communication is too much early in a new relationship.

Interestingly, according to our research at Harland Clarke as well as research from J.D. Power, the number of new products sold and the customer satisfaction ratings both increase as the number of contacts increase during the first 90 days. In fact, according to J.D. Power, the average number of accounts sold increases from less than 2.5 to more than 3 if the customer is communicated with 4-7 times or more. In addition, the satisfaction ratings increase by more than 10% if more connections are made with the customer who opened up a new account.


Unfortunately, there are still several institutions who do not have a robust communications sequence with customers who open a new account, which impacts new customer engagement, cross-sell potential, customer satisfaction and even retention. For those banks that effectively reach out multiple times using email, phone, and direct mail, the results are consistently better across the board.

One of the strongest onboarding programs I am aware of is at a regional bank in the west. Their robust onboarding process proactively takes control of the customer experience for the entire first 90 days, stressing engagement and by offering products and services that are best matched to the customer's needs. The process begins at the new account desk, where there is a selling mentality but also an emphasis on collecting key information that will assist in future communication with the customer. Email addresses are collected from as many as 85% of customers opening new accounts, which is significantly above industry averages and which allows the bank the leverage for multi-channel communication throughout the entire customer lifecycle.

An initial email that is delivered in the first two days of the new relationship discussing what the customer can expect from their bank in the upcoming months are to provide key contact information if there is a problem. This is followed by a branch personalized Thank You letter with a series of engagement service offers. Subsequent communication (beyond standard debit card mailings, etc.) include a welcome call on day 15, an engagement reinforcement letter and email on day 30, and a cross-sell direct mail and email communication based on next most likely product modeling on the 60th day of the relationship.

The bank has found that the ability to offer integrated, multi-channel communication is critical in their quest to achieve the best engagement and sales results and to reach the highest levels of customer satisfaction. Delivering early, relevant and persistent communication has help them improve retention by more than 5%, significantly increase engagement levels and improve both cross-selling and balance build efforts compared to their control group. They achieve these results by 'touching' the new account opener 6-8 times during the first 60 days and by using personalized jump pages to enhance the experience.

While the planning and development for this program was definitely more extensive than a single touch welcome program, the return on investment using all metrics validated the effort.

How many contacts does your bank use to onboard new customers? What channels do you use to reach and engage the customer?

Zions Bank Integrated Strategy Yields Results

I recently spent a couple days at a Marketing Summit with the Zions Bank direct marketing team and their interactive agency Richter7 in Salt Lake City and it was exciting to see the great results of their integrated marketing communications programs.

Not only have they lowered an already industry low attrition rate with their multi-touch onboarding program that uses direct mail, email and phone contacts of customers over the first 90 days of the relationship, but they have also seen a strong increase in account engagement, cross-sales and balance enhancement. Even using very conservative estimates, the ROI of the program far exceeds 400%, with enhancements still being introduced to improve these results.


In addition to a best-in-class onboarding process, they also have seen seen great results from their recently introduced multi-touch customer cross-sell program that scores every household to determine the best product to offer each quarter. This systematic communication based on product propensity and a next most likely product score has enabled the bank to be both efficient and effective in their sales efforts, replacing a multitude of programs that used to be run on an ad hoc basis over the course of a year. Like the onboarding program, the great results for the cross-sell program can be attributed to both excellent targeting and leveraging multiple channels as opposed just one communication medium.

Beyond these foundational programs, the Zions team continues to test new ideas that banks several times larger are not doing. In addition to being close to introducing a new customer acquisition program that leverages multiple channels, traffic generation and the power of their sales force, they are more focused than many in the industry on the power of social media, online and mobile banking (just introduced) and continuously improving metrics. They are even building the infrastructure to expand some of these initiatives to their affiliate network. As a lead player on the Zions team, Matt Wilcox mentioned during the meeting, "I want Zions Bancorporation to be a recognized marketing leader in the financial services industry and to do things that others just imagine".

I want to thank the teams from Zions and Richter7 as well as the people from our team that continue to amaze me by what can be accomplished with senior level approval and with an attitude of partnership and a forward focus. It is always an energizing summit to attend and the results definitely illustrate the value of these planning meetings.

Matt Wilcox has also agree to join me at BAI Retail Delivery 2010 in Las Vegas where on Monday, October 18 we will partner on a half day workshop entitled, Improving Acquisition, Onboarding and Cross-Sell Effectiveness with Multi-Channel Communication . During this session, we will discuss ways to leverage multiple channels in the implementation of successful, integrated marketing communications programs.

IAB Study Discusses Optimal Marketing Channel Allocation

Gone are the days of the Mad Men, when the marketing channels were limited and mass media was king. Today, there are more marketing channel options available and the attention of the consumer is more difficult than ever to capture.

As a result of this fragmented marketing mix, measuring the effectiveness of media spend and optimizing this spend is more complicated than ever. In fact, with the interactive channels (including social media) playing a vastly increasing role in establishing brand and product presence, and with tools like the DVR giving the consumer more control over their consumption patterns, the need to understand how to allocate budgets across marketing vehicles has never been more important.

Last week, the Interactive Advertising Bureau (IAB) released an excellent new study entitled, Interactive Advertising and the Optimal Marketing Mix where research by MarketShare Partners was presented that discusses opportunities for optimizing marketing spend in three different industry verticals - consumer packaged goods, financial services and automotive. In the study, there was a strong case made for a much better measurement of the impact of all marketing investments, both offline and online, as well as the use of incentives as part of the marketing mix. While the study makes a case that traditional advertising has somewhat diminishing returns, too much money spent on any channel was found to be suboptimal.

In addition, it was found that because of the reach and power of interactive advertising as well as the synergies with offline media, the optimal allocation of interactive media spend should be between 1.6x and 2.2x the percentage of the budget normally allocated to interactive. This increase in allocation made all channels more effective in the case studies presented. It was also found that there was a benefit to matching the media with their relative strengths - mass broadcast for brand building, print for information, radio for call to action, online for information, etc.

For the financial services case study, it was believed that the media mix selected needs to support the building of trust in the brand and that it was important that the consumer have some level of emotional connection with the specific brand they choose for certain products. Using the proprietary tool Compass from MarketShare Partners, it was found that the case study institution spent too much on mass media (TV and print) and not enough on online paid search and display. Interestingly, the statistical models employed recommended an increase in out of home marketing (billboards, bus stop ads, etc.) that support the local location. While in this case, the models indicated a need to slightly increase marketing spend for an increased marketing ROI, some of the cases presented actually recommended a decrease in spend for better results.

In most cases, the work of MarketShare Partners supports the importance of mass media to the marketing mix. Despite the growth of the internet and social media, TV is still effective. It is just that this investment in most cases is too high. It was also found that a relatively small reallocation of media spend can have a significant impact on marketers’ revenue. For example, one media optimization scenario examined in this study demonstrated a 6% increase in revenue - even after a 13% decrease in total marketing spend - when dollars were shifted to interactive.

The key takeaway from the research paper from the IAB and MarketShare Partners is that it is more important than ever to employ some type of science to your art of marketing to determine the optimal marketing medium mix. And while some generalities can be 'taken to the bank', the effective allocation of investment will vary from industry to industry, company to company and even program to program based on the objectives of your marketing plan. But with budgets limited, it is imperative that we begin to look at balancing resources to maximize the impact on revenue and profit.

Is your bank measuring the impact of different channels on your program's success? Are you confident in the measurements made around the impact of alternative media? How about the measurements around the impact of mass media? I would love to hear how your bank is allocating your marketing budget.

A special note: More than 15 years ago, I was teamed up with Wes Nichols when we both worked for Response Marketing Group out of Richmond, VA. that eventually was acquired by Brann Worldwide (now part of Euro RSCG). When we worked together, it was clear Wes was a visionary who wanted to test the limits of direct and interactive marketing that was then in its infancy. Through the years, he has led several different marketing organizations, moving more and more from the art of direct marketing to the science of media mix allocation and optimization. Currently, he is the co-founder and CEO of MarketShare Partners out of Los Angeles, a firm that leverages data and analytics to help Fortune 500 firms determine optimal channel spend as opposed to traditional survey based solutions.

QR Codes Are Mobile Gateway for Bank Marketers

As the use of smartphones increases, more and more marketers are leveraging QR, or quick response, codes to drive prospects and customers to promotional content or to expand a conversation. While usually a black and white square, QR codes can also be colorful and can have patterns or logos embedded in them and around them, as long as the code itself works properly.

To access, the viewer only needs to download one of several free QR code reader apps on to their smartphones (some phone are already loaded with this application). When the viewer sees a QR code on a poster, billboard, print advertisement or even on a product itself, they focus their camera on the image and the application will recognize the code and automatically open up the link to an offer, video or other unique content in the phone's browser giving the marketer the ability to share information or offers immediately at a very low cost (marketers can generate QR codes for free).

Retailers, bankers and other marketers are increasingly taking advantage of this relatively low cost marketing tool. Walmart, Target, Macy's and Starbucks are already in on the QR Code wave by offering coupons and membership benefits with a simple scan of the code. Airlines are using QR codes instead of tickets for check-in and consumer product companies are placing QR codes on their products to illustrates uses, nutritional information, etc. One thing's for sure, it is only a matter of time before more marketers start seeing how effective QR codes can be and how it can save them lots of money in advertising dollars in the future.

And consumers are responding. According to a February survey of U.S. smartphone users by MGH, a Baltimore social-media marketing company, 65% of responders had remembered seeing a code with half scanning the code. Of those, 53% said they used the code to get a coupon or discount while 52% used the code to get additional information. When asked why would they be interested in using a QR code in the future, 87% mentioned the desire to get a coupon or discount while more than 60% would use the tool to access more information. Possibly due to the newness of the marketing tool, 72% said they would be more likely to remember an advertisement with a QR code.


Source: MGH, February 2011

While many QR codes are general in nature and used in mass channel marketing, these codes can also send a person to a landing page to collect additional insight before sending them to the content or a personalized QR code can be generated to deliver personalized messages on direct mail, email and other direct channels. Since the QR code is unique and tied to a specific recipient, the marketer will have the ability to see who responds to a marketing piece and when. This type of data could then be used to further refine and personalize marketing messages or for targeted follow-up campaigns.

Other benefits of this tool include:

• Anytime, Anywhere Marketing: Since any smartphone can decode and special software is not needed, your message can be made available anywhere a person carries their phone.
• Channel Shift: QR codes make it easier to move from mass media or even print based marketing to the web increasing the effectiveness of a campaign and integrating media.
• Tracking: QR codes can measure how many people are using the code and at what time. By having easily traceable analytics, firms can view results and know if their QR code campaign is successful. If using personalized QR codes, this enhances the value of the insight to the household or customer/prospect level.
• Cost Savings: Instead of continuously reprinting promotional or sales material, a QR code can be used to direct a prospect or customer to continuously updated content or offers.
• Brand Enhancement: Using QR codes can enhance your brand's image as a technologically advanced firm and can expand your mobile channel's use. If the linked offer or content is unique, it can also set the stage for improved program results in the future and positive word of mouth.

There are some drawbacks, however. For instance, not everyone has a smartphone or is familiar with QR codes, and scanning is not always intuitive. Therefore, QR codes should usually be accompanied with text such as, "Scan with your barcode scanner on your phone."

So how can banks leverage the interactivity and immediacy of QR codes?

Many banks are starting to use QR codes in conjunction with billboard or display advertising where space is limited and where there is a desire to provide additional information. For instance, TD Bank is using QR codes on bus shelter advertising to promote the locations of their branches with Sunday hours. Simply scan the code and the TD Bank branch locator opens on the smartphone's browser providing the closest branch with Sunday hours.

AXA Bank got extremely innovative with their QR code enhanced marketing campaign, using 3844 tins of paint on a billboard to promote their renovation loans. When a person scanned the three dimensional code, they were taken to a mobile application that described the promotion. A video of the program development is even available on YouTube.

Last year, Colorado based FirstBank used QR codes on a series of airport signboards to support their 'Helpfullness' campaign. For those people on the go, they provided free downloads of classic books, Sudoku and crossword puzzles. The signboards provided clear instructions as to how to download and even provided a URL for those without a smartphone.

While QR codes are usually used in conjunction with non-electronic media, Chase has integrated a QR code to simplify the download of their new Android mobile banking app. As part of an animated marketing sequence for mobile banking on their web site, Chase provides an alternative to traditional keypunching to download the app with the QR code starting the process for the customer.

TD Bank also provides three different QR codes on their mobile banking site for customers wanting to immediately download the mobile banking app for a Blackberry, iPhone or Android.

The key to using QR codes is that the rewards one gets for scanning a code need to be valuable. This form of marketing works best in conjunction with a special offer not available elsewhere or to deliver unique content when customers or prospects are not in front of their computer. In other words, QR codes should not be used to simply take customers to more printed material.

Here are additional ways banks could leverage the power of a QR code:

• Supplement billboard, print or branch marketing with video content that more fully describes a promotion or provides a special offer.
• As a replacement or supplement for a traditional product brochure rack in a branch allowing for product offers and continuously updated product information.
• Link to bank spokesperson or other representative of influence in the bank (economic reviews, annual shareholder meetings, etc.).
• Promotional offer for mobile banking customers in branch or on website.
• ATM screen integration to provide expanded information or offer instead of traditional receipt printout.
• Supplemental information in conjunction with a direct marketing campaign (sweepstakes entry, branch locator, video program description)
• Updated rates and/or competitive grids and linkage to online financial management tools.
• A means to capture permission-based mobile phone numbers, email addresses and other customer insight.

I am sure there are more ways to use QR codes that we will see in the coming months as bank marketers try to leverage their mobile banking and mobile communications technology. Are you using QR codes currently? Do you intend to in the next several months? Let me know by leaving a comment here or on my Linkedin page (QR code provided above).

Addendum: Thanks to Nathan King and the people at Austin & Williams advertising for the great infographic below that compiles many of the industry statistics around QR codes.

Seven Steps to Reduce Offline and Online Bank Product Purchase Abandonment

According to Forrester Research, the number of consumers using the Web to research, buy and manage their financial products has grown steadily. In 2009, 63% of US online adults who researched a financial product did so online, with the number increasing over the past two years. Virtually all products were researched, from mortgages and student loans to savings and checking accounts. Interestingly, more than a third who researched products did so exclusively online.

The Web provides inherent advantages when researching and applying, including the convenience of being able to research whenever the user wants, the ease of comparing providers, and in some cases the ability to open the product or service in real time. While the use of the Web is correlated to age categories (with Gen Y using the Internet more frequently), all age groups are increasing their use of online and mobile channels to evaluate options before purchasing financial services.

Online purchase of financial services varies significantly by product type, with complexity and locational considerations driving the sales process. For instance, while almost half of online adults applied for a credit card online, a far lower percentage purchased a checking account online since convenience is a primary consideration, making the ability to walk into a branch to open an account more feasible.

Building awareness and even consideration online, however, does not guarantee the prospect will apply for or open their relationship online. According to a recent Forrester Research study entitled, Injecting Next-Generation Thinking Into Your Financial Services Acquisition Website, almost 40% of online households who researched a financial product online used another channel to complete the sale. This cross-channel selling behavior provides both opportunities and challenges for banks.


Source: Forrester Research 2011

In the example above, a customer may gain awareness through mass media or even direct or online channels, only to further research the service online, over the phone or in person, with the actual purchase of the product or service culminating either online or in a branch office. Each of these steps in the buying process (or sales funnel) can lead to abandonment of the process by the prospect due to complexity, competitive considerations, other prospect priorities or poor sales inquiry follow-up at the bank.

While research indicates that the success rate of moving a prospect from the awareness to consideration to purchase stage varies significantly depending on the product, the research channel, and the ultimate sales channel, the opportunity diminishment can be 80% or higher. In fact, with lending products where there are numerous steps between the awareness stage and loan closing, close rates can be as low as 10% of the shopping universe.

This sales inefficiency provides many opportunities for banks at a time when the cost of new customer acquisition has never been higher and the competition for customer share of wallet is extreme. Some of the ways to improve conversion of awareness to sales include:

• Provide online information from alternative perspectives: Some people will shop for a specific product (credit card), while others research to solve a specific problem (debt consolidation), while still others may inquire from a lifestage perspective (student). A bank website and search engine strategies need to be built with this interplay in mind, providing alternative paths to reach the best solution.
• Leverage dynamic and customized content: Whether the Web, the phone channel or in the branch system, dynamic and customized content needs to be developed to assist in moving a prospect from the awareness to the purchase stage. Understanding segments, purchase intent and competitive position in the marketplace can greatly improve results both online and offline.
• Capture prospect insight from all channels: Surprisingly, some of the newest channels (online) have the best refinement of insight capture through digital tracking and jump page data collection. Alternatively, far fewer banks capture insight from prospects who indicate potential purchase intent by phone, in the branch or through direct mail. Without a formal method of capturing information on how to follow-up on inquiries, we greatly reduce the potential for sales success.
• Develop a multichannel follow-up strategy: In the same way that prospects leverage many channels in their consideration process, it is important to follow-up on all leads using multiple channels. Dependent on the level of insight capture done when the prospect initially inquired about your product or service, quick and consistent follow-up on leads using all channels possible will improve chances for success.
• Monitor the sales funnel: As important as a strong follow-up strategy, the monitoring of each prospect in the sales funnel is needed to better understand the paths prospects take to purchase different products and the success of your follow-up efforts in generating a strong close ratio. Similar to online navigational pattern monitoring, internal monitoring of prospects allows for the development of a sales waterfall that can assist in the identification of service and communication gaps that depress sales results.
• Develop metrics for improved results: Focusing only on the beginning and end of the sales funnel oversimplifies the opportunity cost of lost sales. By better monitoring each stage of the sales process from awareness to consideration to final sale allows for the potential improvement of ROI. For many banks, an improvement of 5-10% in the consideration stage and similar improvement in the closing stage of the process can improve results by more than 100%.
• Online and offline retargeting can provide big returns: Sending an email, making a call or delivering a piece of direct mail to a person who has abandoned a shopping cart has been found to be the most efficient online strategy for all categories of online merchants. While banks don't have online shopping carts per se, they do have abandoned purchase processes for a number of reasons. Retargeting allows you to show your ads to visitors that left your website (or other channel) as they surf elsewhere on the web. These potential customers can get highly targeted ads that are designated to entice them to return to your website and convert their visit into a completed action. Many studies have found that the open rate on these emails exceeds 50%, while the conversion rate can exceed 20%.

In a content-driven world, with the number of messages consumers receive on a daily basis continuing to increase, making follow-up communication personalized and pertainent is extremely important. Therefore, any form of sales communication (even if the prospect indicated interest) needs to respect the prospect's time and privacy.

In addition, the timing of the communication should reflect the channel that the prospect used to shop for a service. In the first 24 hours following an online abandonment, 54 percent of returning customers who make a purchase will do so within the first few hours according to research from the remarketing firm SeeWhy. In other words, more than half of customers will abandon the cart for good if not remarketed within 24 hours of the abandonment. Alternatively, if a prospect is shopping for rates or asking questions about a checking account fee schedule via phone, a person should reconnect within 24-48 hours to answer any follow-up questions.

How many channels can a prospect use to investigate one of your services? Do you capture insight from the shopper and follow-up in a timely manner to determine if any other questions can be answered? Do you measure the effectiveness of these efforts and maintain a waterfall illustrating where improvements can be made? Do you know the cost of lost potential sales if effective management of the sales funnel does not occur?

I am interested to know how your bank manages this process. I also discussed the various views of a sales funnel in a world where prospects enter from various channels late last year on this blog.

Marketers Not Aligned With Consumer Marketing Channel Preferences

Technology is rapidly changing the way consumers interact. We wake up each day to a barrage of messages coming from both traditional and new media. We check our Facebook posts and text messages at the same time we watch television, read the newspaper, listen to the radio or conduct work online. 

Marketers have long recognized the shifts in media consumption that are redefining how customers absorb information and offers. However, recent studies indicate that marketers may not be in total alignment with consumers as to how the new media is consumed and their degree of reliance on various media for making buying decisions.

A new research study by Acxiom entitled, Tug of Love: The Changing Relationship Between Consumers and Brands found that more than four in five people (82%) believed they were in control of the relationship between themselves and their brands (with 'control' being defined as receiving the information they desire, when and through the media they want). This was more than 50% higher than marketers thought, indicating that 'push' broadcast marketing is quickly being replaced with 'pull' marketing where the individual is in charge of message consumption.


Interestingly, the perception of having the ability to filter messages that were either inappropriate or not of personal interest increased with age, possibly due to less messages being sent using electronic channels and due to improved targeting available for older households. Older households also benefit from having longer relationships with their brands, resulting in less bombardment of messages occurring.

Despite feeling in control, however, one in four households still say they receive 'inappropriate' marketing communications, while marketers feel they do a better job of targeting. Even with this ability to screen messages, only 27% of consumers believed their brands understood them or communicated with them appropriately. The good news is that some of the best numbers were recorded for financial services communications, even though less than half believed they were understood and communicated with well.

One of the most surprising findings in this study and in a recently published study from the European Journal of Marketing entitled, Comparing Perceptions of Marketing Communications Channels (Vol. 45, No. 1/2, 2011, pp 6-43), was that although email is well established and widely used by marketers, the traditional channels of television, radio, newspapers and to a significantly greater degree, direct mail retain historically favored attributes of trust and reliability. Conversely, some of the newer media such as SMS and mobile received much lower rankings than marketers believed they would, making these channels less powerful or accepted by consumers of any age category. In fact, direct mail was reported by both customer and prospect groups in both studies as being in the top two marketing channels preferred next to email.

In the Acxiom study, 71% of current customers cited direct mail as an appropriate way of reaching them, with 57% of prospects preferring direct mail. These acceptance ratings were far above what marketers thought who were asked the same question. Only 35% of marketers thought prospects would welcome direct mail. They were much closer with customer perception, noting that they believed 75% would be positive about direct mail. Email acceptance was 77% for customers and only 52% for prospects, still significantly higher than other newer media. In fact, only 12% of consumers felt mobile advertising was appropriate, with the figure for SMS being only 9%. As could be surmised, marketers believed the acceptance rate on these media options would be much higher. Despite the industry focus on and massive growth of interactions through social media, only 4% of consumers wanted to be reached using these channels.

Customer Acceptance of Alternative Marketing Channels (Acxiom, 2011)

Prospect Acceptance of Alternative Marketing Channels (Acxiom, 2011)

The European Journal of Marketing study dug deeper into the perceived attributes of the different media channels as determined by both the sender and recipient. As could be expected, channels that were considered annoying or irritating included SMS, phone, door-to-door and email. Consumers found direct mail to have the qualities of being informative, reliable and trustworthy, while they found most mass marketing to be informative and enjoyable.

Perceptual Mapping of Marketing Channel Attributes - Recipient (European Journal of Marketing, 2011)

'Senders' as defined by the study had a pretty close correlation with recipients regarding most marketing channels except they viewed email in a significantly more favorable light than consumers. Part of this bias may be caused by the lack of measurement between the stages of clicks and consumption of the email opened. The chart below illustrates the perception of the senders of marketing messages on the same dimensions as the above graph.

Perceptual Mapping of Marketing Channel Attributes - Sender (European Journal of Marketing, 2011)

Regression analysis found, not surprisingly, that a marketing offer is more likely to be successful if the recipient regards the information as important. In addition, higher involvement with the product or service is also more likely to result in greater engagement. Finally, it was found that receivers are more likely to be persuaded by the marketing offer in a particular channel if they find communications in that channel to be enjoyable and entertaining, and if the channel that has a reputation for reliable information. Again, this illustrates why some traditional channels such as direct mail and, to a lesser degree, email continue to perform well.

While the Acxiom study was conducted in Europe and the European Journal of Marketing Study was conducted in Australia may impact the specific numbers, but most likely dramatically change the trends found. Both of these studies and a recent white paper published by The Winterberry Group entitled, The Multichannel Revolution: New Media, New Approaches, New Opportunities also emphasized that no single channel strategy will be enough in today's multichannel world. Instead, marketers need to develop a long‐term, audience‐driven multichannel strategy, gaining insight into customer attributes, demand drivers and response cues that are the key to optimal budget allocation.


Finding that right balance of media (and having the courage to respond quickly to its changing dynamics) will
prove essential to growth in tomorrow’s competitive marketplace.

I would like to hear from you. How is your bank's media mix changing as you plan for 2012 to reflect changing media consumption patterns, shrinking budgets and greater emphasis on ROI?

Bank Marketers Face Challenging Times With Great Opportunity

After two years of responding to government intervention into the revenue structure of financial organizations, bank marketers are now faced with heightened levels of competition, a more demanding customer base, an unfavorable rate environment and, in many cases, a shrinking budget. But potentially most challenging to financial institution CMOs I meet in my travels is the ability to respond to the shift in the ways we interact with customers and prospects.

The flood of data, channels, devices and changing consumption patterns have marketing departments in financial organizations of all sizes trying to determine if they are prepared. They are reviewing the skills sets that will be required to take advantage of the opportunities these challenges present, and realizing that gearing up may require a heightened level of personal engagement from all members of their team.

These challenges are reinforced by a set of studies that I recently reviewed that surveyed marketers from all industries. IBM's 2011 Global Chief Marketing Officer Study entitled, From Stretched to Strengthened found that the majority of CMOs feel unprepared when it comes to the explosion of data available (71%), the impact of social media (68%) the growth of channels and devices (64.5%) and the movement from mass markets to micro markets (64.5%).

More importantly, several of the areas where CMOs stated they were least prepared were also those they believed would be the most important for their businesses. As shown below, each of the top four areas of preparedness gap are also in the quadrant where the impact on the marketing function was thought to be the highest.

Preparedness vs. Impact on Marketing Comparison - IBM CMO Study, 2011

But while there were many references to the growing analytical side of online measurement and monitoring in the IBM study, only 26% of CMOs surveyed track blogs, 42% track third-party reviews and 48% track consumer reviews. The need for a much better understanding of ROI was referred to many times in the study, going as far as saying that the CMO of today is in position similar to that of the CFOs 10 years ago.

Turning data into action was also the primary organizational issue in Unica's Annual Survey of Marketers, with the need to harness the power of the mobile device and to leverage the potential of truly integrated marketing also ranking high. As with the IBM study, the Unica research indicated that there is a significant gap between desire and achievement, with much more progress needed in the use of insight for better customer communication and measuring the impact of efforts across channels.

Three Most Important Issues for Marketers - 2011 Unica Survey of Marketers

What was interesting about the Unica study was that, while social media definitely registered as the champion of emerging channels in terms of use (53%), the enthusiasm for the channel was less than in recent years, possibly signaling the desire to see more tangible results from efforts. This also seems to be true in the bank marketing industry, where many are questioning the financial impact of investments made in social media and wanting to connect 'fans' and 'follows' into leads and sales.

Just like most other industries, bank marketers are being tested daily during a period of unparalleled change and will be required to respond to these new market realities:

• The consumer is definitely in control of the business relationship, with the ability to shop with a click and change bank partners without ever confronting us face-to-face.
• While margins are thin and the tolerance for fees is low, delivering customer value is the table stake in the game both from a perspective of products offered as well as access afforded.
• There is a greater need for seamless integration of marketing channels with an eye towards both effectiveness and efficiency.
• Accountability for marketing investments has never been more important at a time when bank revenues are at a premium, with new tools for measurement and skills for assessment being leveraged.
• Each of the above realities will require a more robust and continuous level of testing as tools, approaches and consumer attitudes continue to change.

Over the last few days at the National Center for Database Marketing Conference, where hundreds of practitioners met to discuss current trends and share success stories from a variety of industries, one thing was clear . . . there is no silver bullet. In fact, most marketers are working hard to hone their skill sets in a very fluid environment.

The good news is that there are amazing solutions being developed daily to help marketers do their jobs more effectively. The bad news is that the change is continuing at a more rapid pace every day. To be effective, bank marketers will need to have both great learning agility and adaptability to 'what's next'.

What do you see as the biggest challenge facing your marketing department in the coming year? Is your team prepared for the changes ahead? What are you doing to prepare for the new marketplace?

I would love to hear your comments below.