With a recession looming, brand marketing budgets are often the first to get cut. But research from the Institute of Practitioners in Advertising (IPA) shows that those with a 60/40 plan consistently excel.
In 2007, the average investment was 53% brand and 47% lead generation. Today, with brands focused on the immediacy of results that digital measurement affords, budgets have skewed 25% brand and 75% demand. In the short term, advertisers struggle to justify brand marketing, particularly in macro environments like today’s, where inflation and concerns over a looming recession are putting pressure on banks and credit unions. Additionally, with skyrocketing mortgage rates, a booming house market has now come to a halt.
Logically, financial marketers know that this will pass, but when faced with meeting this year’s forecast for new household acquisition, an increasing number of checking accounts, and overall increasing deposits, the tendency is to want to shift brand marketing budgets to more short-term demand generation strategies.
The C-Suite’s desire to see immediate ROI can make investing and sticking to a 60/40 plan challenging. Yet, history shows that companies that invest in growth and innovation win in the long and short term. And, when only 5% of customers are in-market during a given quarter, marketers need to target them with a long-term lens.
When convincing leadership to buy into a strong combination of both brand and demand marketing, Erinn Steffen, Senior Vice President, Insight says there are a few tactics to consider.
First, measurement is important. While it can take up to three years for brand marketing tactics to reach their peak, learnings from a six-month pilot test can be gleaned much faster. Doing a head-to-head geography test is a great way to prove greater demand. It can also help to limit any perceived risk.
Equally important is aligning on the KPIs to measure. “We’ve got so much data, it’s coming at us from every single direction,” Steffen said. “Just because we can measure it doesn’t mean that tactic is better. It just means that tactic is more measurable.”
Additionally, understanding the institutions’ strategies is important. With 25% of banks expecting consolidation, some have a sole strategy of being acquired. In that case, a focus on brand marketing might not be the right fit. Inversely, if the institution is one that’s doing the acquiring, wanting to build strong consumer trust and equity may be a top priority.
“The key to brand marketing is consistency,” Steffen explained. It’s not just a big TV spot, but consistent messaging about a financial institution’s values, mission and empathy. “You want to keep telling the same purpose-driven story quarter-over-quarter instead of constantly changing it,” he said.
This consistency helps to build consumer trust. One way to do this is through creating short videos and articles that provide value to potential customers. Where regional banks can also excel is in customer relations. For example, how tellers interact with existing customers can be an emotion-rich experience. Steffen likens this to how Chick-fil-A employees reply to customers who thank them by saying “my pleasure” instead of “you’re welcome” or “no problem.” Even the littlest detail of what a bank statement looks like or the welcome message on a mobile login screen can be a brand marketing opportunity.
These seemingly little details help to secure ongoing meaningful relationships with the customer. According to Forrester, 40% of a financial brand’s strength comes from a brand’s ability to engage and activate emotions. With a new crop of challenger brands such as Amazon, Apple, Google, Starbucks and Walmart stepping into the financial services category, it’s more important than ever for traditional financial institutes to build a framework of empathy, values and trust.
Brands must be willing to make the investment of both money and time to develop emotion-rich brand messaging that helps to establish that trust. This is one area where regional banks can excel as consumers tend to trust local companies more so than ones with a national footprint.
When it comes to brand and demand marketing, it does not have to be an either-or situation. IPA data shows that running the two concurrently to address the entire consumer journey is six times more effective than running demand campaigns alone. The path forward is twofold: relevance and relationship.
“Trust is the prerequisite for any action,” Steffen concluded. “If I don’t trust you, I’m certainly not going to get a mortgage from you. If I don’t trust you, why would I put my savings account there, or my student loans?”