Radical Realignment: Low Growth? Declining Market Share? Underperforming Branches? A Community Bank in Texas Responded to These Problems by Dramatically Shifting Both Brand and Market Strategies-Simultaneously

By Stephens, Jeff; Sullivan, Joe | ABA Bank Marketing, March 2009 | Go to article overview

Radical Realignment: Low Growth? Declining Market Share? Underperforming Branches? A Community Bank in Texas Responded to These Problems by Dramatically Shifting Both Brand and Market Strategies-Simultaneously


Stephens, Jeff, Sullivan, Joe, ABA Bank Marketing


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The problem was far from uncommon: The First National Bank of Mexia (assets: $75 million) Mexia Texas, recently found that business wasn't what it used to be. The Central Texas market had changed, the economic environment had shifted, and area residents had more financial options. The local economy was weak and the town had few prospects for visible economic recovery.

As a result, the bank was worse than stagnant it was losing market share. In addition, the bank's three branches in nearby communities were in the same situation: All were underperforming.

From a brand and marketing standpoint, the bank had little traction in the hearts or minds of the area consumer, it had a different bank name for each of its four branches and had struggled with outdated and unmatched branch environments. There was no sense within the bank--let alone the community at large--of what differentiated the bank from its competition. Marketing materials were nonexistent: sales efforts were passive at best. Not surprisingly, employee morale and customer loyalty were in short supply.

The solution: transformation

The bank's new generation of management realized that the strategies that had grown the bank in previous were no longer sufficient--simply because the business environment was different. In a show of courage vision, the 125-year old bank's management, board and staff committed in a transformation of the bank,

Recognizing that such change was beyond the bank's internal capabilities, First National with two outside companies: first a consulting firm and later, with a branding and marketing agency.

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The transformation program focused on combining the art and science of market research, data analysis, strategy development, multisensory marketing, experiential brand development and public relations. The comprehensive effort included both strategy and execution.

Developing fresh brand and market strategies

The program began with an extensive analysis of the bank's markets. Many banks consider branch data, basic demographic information and general market trends in making important decisions. And while this information is useful, it is no longer sufficient to reveal actual market opportunities. Additional information (demographic, psychographic, behavioral and so forth) must be collected and analyzed in relation to the conditions present and projected in a bank's competitive market.

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For First National Bank of Mexia, the results of the existing and target market assessment studies quickly showed that little growth would be available in the bank's existing markets. Retaining deposits would require a deeper relationship with existing customers. Moreover, the bank's research and analysis led to recommendations that included closing one unprofitable branch, shoring up its remaining branch network, and expanding into growth markets to capture new customers. The nearby community of Waco, Texas was the first chosen for an expansion location.

"It can be really hard to see your own market clearly after decades of being right in the middle of it," says Brad Butler, the bank's executive vice president and chief financial officer. "The initial findings of the program offered a fresh, evidence-based perspective that we could never have achieved on our own." Following the presentation of market assessment data and subsequent recommendations, the consultant conducted a differentiation and strategic messaging process, which refocused the management team on the role that branding and marketing play in growth strategy. The process's result was recommended points of differentiation and a set of strategic messages to drive internal decisions and help position the bank successfully in both its legacy and future markets.

Strategic messages give points of differentiation traction in the marketplace and allow an organization to clearly and consistently talk about itself. …

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