Driven to Differentiate

By Cook, Gretchen; Swann, Nicole | Independent Banker, January 2011 | Go to article overview
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Driven to Differentiate

Cook, Gretchen, Swann, Nicole, Independent Banker

By developing marketing that taps into positive public awareness of community banks, ICBA members appeal to customers by setting themselves apart from the Wall Street crowd

The State Bank of Speer in Illinois developed advertisements promoting its financial strength and stability. Bank Independent in Alabama ran ads featuring the names and faces of its happy and loyal customers. In Massachusetts, Lowell Five Cent Savings Bank profiled its civically active staff members. To make its point, Bank of Ann Arbor in Michigan used playful ads featuring the unusual names of local businesses.

"It's a little hard for outsiders to get the humor of the things we make fun of, but we're not trying to exclude anybody," says marketing officer Rhonda Foxworth of Ann Arbor Bank's offbeat advertisements.

Beyond their humor and homegrown branding, these marketing campaigns promote the timeless truths and values our industry has upheld for decades-integrity, stability, good service and expertise, and long-term civic commitment. What stands out about these campaigns is their timing and context. Launched during the early days of the financial crisis or the subsequent recession, they also conveyed, sometimes directly and other times indirectly, that their Main Street institutions aren't anything like those towering along Wall Street.

"The light bulb went on," Greg Raymo says about the public reaction to a differentiating marketing campaign released last spring by First State Bank Southwest in Worthington, Minn., "and now they totally understand there are benefits to banking locally."

Recessions usually mean businesses considering cutting everything from paper clips to possibly even personnel, but marketing activities often become the first expense items to get squeezed. But some community banks have gone against that grain. Looking beyond the recession, they have made a priority of solidifying their positions as financial institutions that plan to remain independent and in business well into the future.

Operating six locations in mostly agricultural communities, First State Bank has benefited from bumper crops that have supported the local economy and allowed the bank to inject fresh funds into its marketing budget, says Raymo, the bank's executive vice president. "We added about 10 percent to our marketing budget simply to attack the public's perception that all of us banks are alike," he says.

The $182 million-asset community bank's extra marketing spending produced hard-hitting advertisements with the taglines "Local banking, local people, local decisions" and "We're an Oxford Street bank, not a Wall Street bank," referring to the main drag in Worthington, where First State opened in 1903. Those messages appeared in a series of coordinated radio, newspaper and billboard ads. The bank plans to continue its awareness campaign through this year.

The First State Bank campaign was followed by a 28 percent increase in new accounts, a record-breaker for the bank, Raymo says. The campaign also touts the bank's investment in the community in the form of support for nonprofits, partnerships with schools and leveraging of local deposits into loans for agriculture and other businesses. "That is the major difference," says Raymo. "The big bank profits go back to corporate headquarters." That message prompted the Minnesota West Community and Technical College to transfer $2.5 million in capital reserves to First State Bank from Minneapolis megabanks.

But successfully differentiating Main Street community banks from Wall Street financial institutions doesn't necessarily require piles of cash and slick messages, some marketing advisers say. To ride today's favorable currents of public awareness for community banks sparked by the financial crisis, some have temporarily redirected funds from other areas or simply retooled their existing marketing messages.

"You just have to have a solid strategy," says Jane Rea, director of marketing and communications for Bank Independent, which has 28 locations in northern Alabama and close to $1 billion in assets.

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