THE IMPORTANCE OF LIKING

People like to do business with people they like.

As we covered in the September issue of the newsletter, "liking" is one of Professor Robert Cialdini's six psychological principles for influencing consumers to do business with you.

These principles are actually skills or tools you can employ to improve your chances of having customers and prospects say "yes" when you make them an offer.

The importance of liking suggests that banks should hire extremely outgoing, likable employees and minimize turnover in the branches. While this seems an obvious statement, too often high employee turnover diminishes the bank's likeability. This manifests itself in the large number of bank accounts closed due to poor customer service.

Proof of the power of liking can be found in the same J.D. Power & Associates study referred to above. Another finding was that banks ranking in the top 50% of the customer satisfaction survey had a 2% to 5% greater deposit growth.

In spite of this finding, banks still have a long way to go in building relationships with their customers. Gallup.com's annual business sector survey conducted in September found that the banking industry's positive rating fell to 28%, eight percentage points lower than its 2008 score and the largest year-over-year percentage drop of any industry.

And restating the J.D. Power 2009 Retail Bank Satisfaction Study findings reported in the opening paragraph — customer commitment to retail banks has declined three years in a row.

All three survey results were reported in the article, "Banks turn message back to what consumers want," appearing in the October 5, 2008 issue of Advertising Age.

Bottom line — as financial services marketers you must consider reallocating much of your marketing dollars to programs aimed at dramatically improving your relationships with your customers. You need to become much more likeable while assuring customers and prospects that they can count on you for sound financial advice. You must convince them that your bank or credit union offers the products and services they need to build a solid financial future.

Here are nine marketing ideas to help make this happen.

NINE MARKETING IDEAS TO CONSIDER

1. Hold customer appreciation days at your branches.
2. Send customers a thank you card each time they open a new account.
3. Send them a birthday card each year.
4. Send them a thank you card on certain anniversary dates — for example being a customer for five and ten years.
5. Hold online webinars where customers and prospects can call in to ask questions.
6. Send periodic "we appreciate having you as a customer" e-mail notices from your president.
7. Send a "state of the bank" letter/e-mail to all customers at least quarterly.
8. Use your CEO or president in media advertising. Make him or her more visible to your customers.
9. Consider sending customers a monthly or quarterly newsletter.

CUSTOMER APPRECIATION DAYS

These events are done at the branch level and can cover a wide range of promotions.

Examples include paydays, new branch openings, branch remodels, branch anniversary days, holidays, and local community events. A good imagination often yields great ideas for holding a customer appreciation day.

Your celebration can be as simple as a treat table offering a variety of beverages, pastries, and snack foods. Or it can be as elaborate as decorating the branch during holidays and holding a sweepstakes for a variety of prizes.

An excellent idea for a customer appreciation day is to give away coupons and samples solicited from local retailers.

Your goal is to create an event that your customers not only want to attend but will remember in the months ahead. Often, your customers will bring a guest or two to show them how lucky they are to have a relationship with a bank that cares for them.

The key to customer appreciation days is to avoid turning them into a sales event. Your goal is to get as many customers as possible to visit your branch and bring family and friends with them. The warm, friendly greetings from branch employees should result in additional new accounts in the weeks and months ahead.

THANK YOU CARDS

This should really be considered a "no brainer." Your customer should receive a "thank you" card or e-mail each time he or she opens a new account or service at your bank or credit union. According to the Gen Y guy, Jason Dorsey, these "thank you" e-mails should be sent to the customer on the same day the account is opened. More on Jason Dorsey can be found in the sidebar to the right.

Ideally, these cards should be hand-signed and come from the branch manager or the employee who opened the new account. Jason Dorsey's extensive consumer research found that Gen X consumers (those born 1965 to 1976) are loyal to people but not to the company. As the keynote speaker at ACTON Marketing's October symposium, Jason shared with us that he has a banking relationship with "Melissa," his branch new accounts person, not with his bank. And the same is true for his friends.

This intelligence suggests that computer-generated "thank you" letters would not be well-received by your Gen X and Gen Y customers and prospects.

Considering the number of new accounts opened daily by a branch, it should not be time-consuming to prepare and send thank you cards on a daily basis. The key to doing this is making it an integral part of the new account opening process.

A simple, inexpensive, hand-signed thank you card or note goes a long way to establishing a friendly relationship with each and every customer.

BIRTHDAY CARDS

According to Jason Dorsey, the most important holiday for Gen Y customers and employees is their birthday. They love to be recognized and acknowledged on this important day each year.

Your editor — a baby boomer — receives a hand-signed birthday card every year from my dentist. And in September, I received a birthday greeting from USAA, my insurance company/bank. And while my birthday is not the most important day in my life, I feel a special affinity for my dentist and USAA as a result of receiving this card. I know they have made a special effort to remember me on my birthday.

Your customers' dates of birth are readily available on your bank's customer database...as is the branch where each account was opened. You have a choice of preparing and mailing birthday greetings from a central location or sending a list of birthdays to each branch for branch processing.

Imagine how special you feel when someone you do business with sends you a birthday greeting. It's likely you already receive one or more such cards or notes. So you already know how your bank customers will feel upon receiving your bank's birthday greeting.

At a minimum, sending birthday greetings is worth a test.

And, you might want to take it a step further by inviting your birthday customers into your branch to get their free $5 coffee card.

ANNIVERSARY CARDS

Anniversary cards are sent to customers congratulating them on a specified number of years as a bank customer. For example, your bank may select the first card to be sent on the five year anniversary of the first account opened.

This should prove to be an easy systems issue as every bank account requires a "date opened." Just be careful of checking accounts that get closed as a result of lost or stolen checks and debit cards and reopened with a new account number. Generally, such reopened accounts get a current account-opened date.

Since anniversary notices aren't sent as frequently as birthday greetings, you might want to test offering a free gift for coming into your branch. It could be something as simple as a $5 coffee card or one of the more expensive gifts used in the Free Checking program.

Like birthday cards, anniversary cards tend to surprise and delight your customers.

ONLINE WEBINARS

In the good old days of branch banking, it wasn't unusual for a bank or credit union to hold annual IRA seminars in February and March. A room was rented, a speaker hired, invitations were distributed, handouts printed, and refreshments were served. The same held true when banks and credit unions got into the investment business.

But times have changed thanks to ATMs, the Internet, and online banking. Your customers and prospects are less likely to take time out of their busy lives to attend a live event. In fact, many of them rarely — if ever — visit your branch.

If they won't come to you...now you can go directly to them.

WebEx, GatherPlace, and Adobe Acrobat Connect Pro enable you to reach out to your customers and prospects over the Internet via webinar software. From the comfort of their own homes and businesses, they can now quickly and easily connect with you online.

As an aside, a comparison between industry leader WebEx and smaller GatherPlace proved GatherPlace the winner in terms of cost and ease of use. The details are available here.

Webinars are an excellent way to hold online conversations and presentations about IRAs, first time home buying, setting up a savings plan using laddered CDs, your bank's investment center, and new product introductions.

The bigger banks are already making widespread use of the webinar format to connect with customers and prospects. My local credit union recently started using them to reach out to its members.

Webinars are an excellent way to initiate and continue dialogs with your customer base — especially your younger customers who rarely visit your branches.

CUSTOMER APPRECIATION E-MAIL NOTICES

What we are recommending here are spontaneous e-mail notices from your president or CEO, thanking customers simply for being a valued customer. Such e-mail notices could also come from branch managers. Or, in the case of Gen Y consumers like Jason Dorsey, from his banker Melissa.

These e-mails should be short and to the point. As an example:

Dear Mr. Topper,

As president of ACTON Bank, I just want you to know how much we appreciate the trust you've placed in our team of bankers. Your continued business is extremely important to us. We are always open to suggestions on how we can better serve your financial needs.

Sincerely,

J.C. Johnson
President
ACTON Bank

Just imagine how surprised and delighted you'd be to find such an e-mail in your inbox. Now imagine how surprised and delighted your customers will be.

STATE OF THE BANK UPDATES

With today's continued economic uncertainty, it's important that from time to time bank customers receive assurance of the safety and soundness of your bank or credit union. This requires opening and maintaining a dialogue on the state of your financial institution.

The quickest way to accomplish this is via an e-mail. Other ways include a periodic statement insert, a brief newsletter article, a webinar, or a personal blog from your president.

As of October 26, 106 small to medium-sized banks have failed in our country with many more on the government's watch list. Consumers are fed a constant stream of information about banking issues like credit card debt, banks receiving TARP money, excessive overdraft fees, and threatened banking legislation.

All this information creates uncertainty and fear in the hearts and minds of your customers. Trust is eroded. What you don't know is what they are thinking or feeling about your bank or credit union.

But you can be pro-active by reaching out to your customers and bringing them up to date on the financial status of their bank or credit union. Let them know their funds are safe. Remind them of the expanded FDIC insurance coverage. Inform them of community activities your financial institution supports. In short — make them feel good about banking with you.

THE CEO/PRESIDENT AS SPOKESPERSON

Here's some startling statistics you are probably not aware of. They have to do with trust.

At the end of the second quarter of 2009, only 34% of Americans trusted their bank. And that's up from a low of 29% in the first quarter.

This means 66% of Americans are telling researchers that they don't trust their bank.

This startling information comes from The Chicago Booth/Kellogg School Financial Trust Index, a new, quarterly survey measuring Americans' trust in the nation's financial system. Started in late 2008, the first survey results for the fourth quarter of 2008 came in at 33%.

These shocking numbers were confirmed by similar numbers from a recent BBB/Gallup Trust in Business Survey which originated in September, 2007.

A quick Google search on both survey titles will get you to the relevant websites for more information.

These numbers are telling us that banks, and to a lesser degree, credit unions, have an immediate need to rebuild trust among consumers, in general, and with customers specifically.

The fastest and best approach to accomplish this is to put your president or CEO out in front with an ongoing stream of positive messages. As mentioned above, they should pen a column in your monthly or quarterly newsletter. They should send reassuring e-mail messages and participate in webinars. You might consider featuring them in a series of newspaper ads on the state of your financial institution.

If you are a user of direct mail, you should consider featuring them in these mailings. A head shot accompanying a brief presidential message on one inside panel of a self-mailer is an ideal location.

Your customers need to know they can trust your bank or credit union and the employees who run it. And the only person to deliver this critical message is the only person with complete access to the bank's critical financial information.

A MONTHLY NEWSLETTER

Over the past several years, we've noticed more and more credit unions are using a monthly or quarterly newsletter to keep in closer touch with their customers. We seldom see banks doing so.

Credit union newsletters arrive either monthly or quarterly in the monthly checking statements. For those customers using online statements, you could send your newsletter as an e-mail. An example of a credit union newsletter can be seen in the sidebar to the right.

Your newsletter is an excellent way to get the faces of your bank executives and branch staff in front of as many customers as possible. This is especially valuable for all those online banking customers who seldom — if ever — come into your branches.

And it's the perfect vehicle and format for communicating your bank's "corporate halo" to customers.

These newsletters are generally a standard 8 ½" x 11" format consisting of four pages. A president's letter generally appears on the first inside page. They are also an excellent format for providing your customers with valuable coupons.

One of the primary reasons we hear for not doing a newsletter is the lack of content on an ongoing basis. Bank marketers and senior bank management believe that each issue of the newsletter should be chocked-full of stimulating articles on financial topics. Nothing could be further from the truth.

The absolute best newsletters are those with a brief "update" letter from the president, lots of photos of bank employees, a corporate halo update, and a coupon or two. The newsletter should be easy and fun to read. It's an excellent vehicle for getting your customers to like your bank and its employees.

Most banks and credit unions outsource their newsletter creation and production to a third-party vendor such as ACTON Marketing.

GET STARTED TODAY

Again, the nine ideas covered above are only a sampling of strategies and tactics available to help your bank or credit union reach out to its customers and rebuild the trust that is so important for an ongoing relationship.

These nine ideas were selected as they are quick and easy to implement. Most are low-cost and require little or no major systems changes.

It's important that you get started on your customer outreach program right away – the sooner, the better. When it comes to rebuilding trust and ensuring that your customers like you, you want to be ahead of the curve and not following in the wake of your competitors.

This is one marketing opportunity where you want to be a leader and not an imitator.

YOU CAN LEARN FROM HARRAH'S

Many marketing experts have stated that Harrah's customer-relationship loyalty program is the gold standard by which all others should be rated. It was started in 1997 as the Total Gold program and renamed a year later as Total Rewards.

The program was featured in the article "Why Harrah's loyalty effort is industry's gold standard," appearing in the October 5, 2009 issue of Advertising Age.

As it relates to keeping in contact with its customers, according to the article, Harrah's "communicates with its members regularly via 250 million non-acquisition pieces of mail a year; good customers can receive as many as 150 pieces a year from one or all of its hotels. Harrah's sends nearly 8 million e-mails collectively to its loyalty members in an average month."

Now here's the startling part — to fund its direct mail and e-mail communications programs, Harrah's cut its traditional advertising spending by over 50% from 2008 to 2009.

As financial services marketers, you must be prepared to do the same marketing budget reallocations. You have to spend money to make money. You might not be able to get more marketing dollars, but you can divert marketing dollars from your sacred cow programs and use them to build stronger relationships with existing customers.

Remember, it's a marketing truism that it costs much more to generate a new customer than to keep an existing one.

And, you have to spend money to make money. But as we've learned from the folks at Harrah's, this doesn't require a larger marketing budget. It simply requires allocating your existing marketing dollars where they'll deliver the greatest return in today's economy.