The Multi-Channel Marketing Conundrum

By. Brian Nutt, Codigo

For the better part of our industry’s lifespan, the focus of customer engagement has been in the branch.  In general, budgets, people, products, and marketing efforts were centered on generating business at the branch location— and that meant getting customers in the door.  It worked for a long time, and beautiful buildings continued to open up with trends showing that market share would certainly follow.   But times have changed—and at a rate that is difficult for many institutions to react to quickly enough to head off branch inefficiencies.

In the last 5 years, the metrics within the branch have reversed course from the expected trajectories that would’ve been reasonable based on previous experience.  There was a time in which a branch would be built with an ROI based on the accounts that could be expected to be won over a period of less than 2 years through traditional marketing channels such as print, radio, and television.  The problem banks and credit unions face today is that branches are now just one of several options customers have available to them when they need to access information.  We live in a multi-channel environment and marketing efforts need to reflect these shifts.

Since the introduction of mobile banking, transactional costs within the branch have had a mercurial rise.  In fact, a recent study done by the Tower Group reports that an in-branch transaction exceeds the cost of a mobile transaction by 20 times, and is a rattling 40 times more expensive than an online transaction.  It is no consequence that the cost increase directly correlates to customer branch visits.  The ABA reports that online banking became the most preferred banking method in 2009 and that included adults ages 55 and up.  You have to wonder what effect mobile banking will continue to have on branch profitability.

From a marketing perspective, this puts the industry in an odd position.  For years, institutions have spent the majority of their resources on branch networks and then tied their profitability to individual branches.  And while few will deny that branch profitability is under siege from the new options consumers have, most Banks and Credit Unions are paralyzed into inactivity by a structure that treats the branch as the primary source of business, no matter how infrequently a customer visits.

Even harder to swallow is the fact that customers demand convenience at every touch point.  So while you may not see your customers as often in your branches, you had better be ready for them.  When they do walk in the door, they want everything at their fingertips and in a format just as convenient and transparent as the other channels they are accustomed to.  This expectation will force change in branch structure going forward.

The format for branching and how marketing will need to adjust is not yet entirely clear.  Each institution will need to address how their customer base responds to channel utilization and become experts at digesting statistics about each customer touch point.  Consider this as you lay out your next marketing campaign and you will surely face some interesting decision points that might have gone untouched until now.

Brian Nutt

Brian Nutt

After graduating from Marquette University with degrees in Advertising and Spanish, Brian began his formal career managing the international sales strategy for Fire King International. In 1999, Brian was recruited ... Web: www.gocodigo.com Details