Online Strategies for Community Banks to Beat the Competition
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It’s no easy feat for community banks and credit unions to thrive online since they must contend with big banks and smaller financial institutions in their area. This factor presents a significant challenge that banks cannot ignore.
According to Rivel Banking Research, the average marketing budget of banking institutions is 0.06% of their total assets. In simpler terms, this translates to $60,000 for every $100 million in assets. Keeping up with rivals can be expensive, but not doing so would be even worse.
Considering this - it's challenging to differentiate your brand when your competitors have similar qualities like community support and personalized service. Standing out becomes a formidable endeavor.
A survey revealed national commercial banks allocated a staggering $13.76 billion towards advertising in 2022, while state commercial banks invested only $1.74 billion.
To emerge victorious with such competition, it’s necessary to truly understand what sets you apart from both national banks and local institutions, whether online or offline.
What Makes Community Banks Unique Compared to Other Local Institutions?
Community banks may struggle to keep up with the technology offerings of the big institutions, which can be a disadvantage; however, community banks commit to providing exceptional personalized service. They often offer lower fees and more competitive rates than their mega counterparts.
Community banks should identify what makes them stand out from other local institutions and stay relevant. Performing an analysis can help them discover their unique selling points and use them in their marketing strategy. Some points to consider include:
- Analyze the factors that make your institution stand out, like price, product offerings, online presence, and personalized service.
- The kind of rates you offer: either higher rates or lower fees on vital products.
- How does your institution’s digital capacity compare with other local or national institutions?
- Decide whether to offer online account opening or better features within your mobile banking app.
- Find out how you can retain your customers or members.
- Plan a rewards or referral program or whether you should provide personalized service.
- Know the reasons customers may choose your institution over your competitors.
- Conduct surveys and interviews with your customers and gather information from your team.
When community banks understand their unique strengths, they can effectively compete in the financial market and continue to serve their local communities. Afterall, considerations for community banks increased by 3% in the last year from 69% in 2022 to 71% in 2023 according to our semi-annual research
Boost Your Online Business with Intelligent Digital Focus
After clearly defining the competitive benefits of your community bank, convey that point to your prospective customer base. Given the limited resources compared to megabanks, community banks should focus on these significant digital strategies.
Social Networking
Social media marketing has become a popular way to reach specific audiences. Create content that promotes your brand and engages with current and potential customers on social platforms. Emphasize what sets your institution apart and limit product-related posts to 20% of your content. Nationally, 40% of banking consumers prefer to learn about a new bank through social media advertising.
Email Promotion
Email marketing is experiencing a resurgence, but updating your approach is necessary as companies heightens security around spams and phishing emails Use email newsletters to create brand recall, maintain visibility, boost cross-sales, and achieve other objectives. You can leverage email addresses to target digital advertisements online and prioritize the growth of your email list.
Content Planning
A successful banking website requires an effective inbound marketing plan to attract and convert visitors. Content can come in various forms, such as product pages, blogs, resource centers, social media posts, and emails. Thoroughly understand your target audience and create a content marketing strategy that generates interest at different stages of the sales process. Make it inclusive to cater to various audience needs and consider localizing it whenever feasible.
The Benefits of Search Engine Optimization
Make search engine optimization (SEO) your top priority to defend against mega banks and regional competitors. Create a local SEO strategy and include schema markup on relevant pages. While big institutions struggle to compete on a hyperlocal level on SEO, you’ll have the advantage.
PPC or Pay-per-click Marketing
Pay-per-click advertising is an effective digital strategy to outperform your online competitors and secure top positions in search engine results. To maximize success, carefully choose your keyword strategy and target less competitive yet highly relevant terms that align with your business objectives. If your bank offers online services such as loans or checking accounts, prioritize promoting these products to drive PPC conversions.
Summing Up: Take Advantage of Your Unique Edge
Community banks have lower turnover rates and can establish more long-term relationships with their clients. This factor is especially critical when customers need to make significant decisions, like investing their life savings. Having trusted relationships makes customers feel valued in today's impersonal digital economy.
Community banks also understand their local community's needs and have close ties with neighborhood organizations. While megabanks may have local branches and donate large sums to national organizations' local chapters, they are not as personally involved in small communities, creating jobs, giving back, and serving on boards. In the end, it’s the community well-being the caring that matters.
Sources
- https://www.statista.com/statistics/470630/commercial-banks-industry-ad-spend-usa/
- https://www.forbes.com/sites/forbesagencycouncil/2022/02/07/get-your-banks-marketing-budget-in-shape-for-2022/?sh=2fc01fed32d8
- https://www.consumerfinance.gov/about-us/newsroom/the-cfpb-finds-financial-education-programs-are-significantly-outspent-by-financial-marketing/
- https://www.cutimes.com/2014/02/24/americans-still-angry-at-banks-but-not-likely-to-s/