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Challenge Your Bank's Current Marketing Approach - Almost Everything You Thought You Knew about Marketing Is Wrong

by James Gilmartin, BOL Guru

Marketing is in Crises
That's not news. The news is what is causing that crisis. Most know that these are harsh and unforgiving times in marketing. The ad business side of marketing had its worse year in history in 2001, and according to projections being made further business decline in 2002 will give advertising its first back-to-back negative growth years since the Great Depression. Everyone seems down on marketing. People are tuning out marketers' messages as never before. Consider some other random symptoms of bank marketing's problems:

  • The rate of new product failures has risen to 80 percent or more, according to Bill Gorman's New Product News.
  • Customer loyalty is withering by many accounts, making one bank's customers easy pickings for another bank.
  • Consumer trust has gone south, according to Roper Starch.
  • Customer satisfaction has never been lower, according to the University of Michigan's American Consumer Satisfaction Index.

What is the source of the grim picture in bank marketing? Why does the rash of symptoms plaguing their art baffle so many people whose livelihoods depend on marketing? Why can't banks with mega budgets and talent solve their marketing problems? Why is it that with more information on customers than ever before in marketing history, banks are finding them tougher challenges to sell to?

A recent Saturn commercial illustrates some of what is wrong in marketing. It showed a Saturn weaving uphill and down in a desert-like landscape filled with German Shepard sized-ants fanning out across the barren stretch. Technically brilliant, the commercial was substantively empty. Silly. Asinine. The embarrassingly juvenile commercial reflected a total disconnect with Saturn's brand image. It may have tested well in focus groups, but focus groups can be as far removed from reality as computer-drawn ants.

There is a cornucopia of reasons given for bank marketing's problems, and certainly no shortage of ideas offered for their cure. Interestingly, explanations offered for bank marketing's travails generally exculpate marketers from any responsibility. Instead, bank marketing's problems are said to be the result of external conditions, like a well informed, more educated consumer population (presumably marketers are among the better educated, so why should there be a gap?). Other popular whipping boys include the astonishing range of choices that consumers have, ad clutter which disorients the mind, and of course the Internet.

However, one condition that arguably is playing the greatest role in bank marketing's horrendous derailment is rarely mentioned: the aging of society that is driving historic changes in the leading views, values and behaviors in the marketplace. In the process, this is radically changing the rules of marketplace engagement.

Until bank marketers come to grips with this historic event, customers will continue tuning out their messages on a massive scale. Madison Avenue is suffering from a generation gap between itself and the older, more seasoned and autonomous consumer universe that has emerged. Perhaps nothing else has done as much throw marketing off course.

The Internet Changed the Rules Of Engagement between Bank and Customer
The most revolutionary change the Internet brought to marketing is giving shoppers the means to learn from each other about a product or bank. Customer reviews of books, CDs, cameras, computers and other products pose serious challenges to advertising because customer-to-customer testimonies ultimately have greater power to influence shoppers and buyers than traditional advertising.

Some people simplistically preach that the most basic rule of all in marketing is "Know your customer." However, how do you get to know your customer? Customers often are not the best experts about themselves. Ford fell into such a trap by following the guidance of customers who thought the minivan idea not a good idea.

Almost Everything You Thought You Knew about Marketing Is Wrong
Almost everything you thought you knew about marketing is wrong! Customers now control most markets. Companies held more sway over markets and customers when they controlled information about themselves and their products. Boastful advertising cannot compete with tales of real life experiences told online by customers. Customers once had limited recourse when a bank displeased them. Knowledge is power.

Regrettably, markets past don't offer much help for succeeding in today's markets. Lessons on marketing meted out in business schools and learned on the job in the marketplace reflect decades of experience in markets dominated by the views, values and behavior of people under the age of 40. That makes almost everything you thought you knew about marketing wrong. In 1989, the year that adults 40 and older became the New Customer Majority, the validity of many ideas about marketing, that were shaped by experiences in youth dominated markets, began to fade. But not necessarily their influence on marketing.

Ultimately, the biggest challenge in bank marketing today is overcoming the momentum of old ideas made obsolete by the Internet and the New Customer Majority. Consider the old idea that youth is the ideal human state. In service of this bad penny, marketing experts repeatedly remind us that aging boomers hate the idea of aging, so base your marketing to them on the values of youth. Many studies indicate that people generally adjust well to aging Marketing suffers from a pandemic of chronic youth syndrome (CYS). The truth is, many people in marketing seem more afraid of aging than most aging boomers are - or at least older boomers who have had enough time to work through their earlier midlife qualms about it.

In yesteryear's markets, marketers learned through trial and error that selling the rational marketing triad of product features, functional benefits and monetary value worked. In yesteryear's markets, marketers learned through trial and error that marketing was also a game of persuasion. However, product centered marketing is dead; say Joe Pine and Jim Gilmore in The Experience Economy. Like many others, Pine and Gilmore say marketing is now more about the customer experience than the product.

Youth Dominated Markets of the Past Have Passed Into History
Marketing's crisis owes much to the fact that too few people in bank marketing realize that New Customer Majority minds don't work the same as minds in the Old Youth Majority. Often marketing communications are tuned into the younger mind.

"Know your customer" is the first commandment of customer relationship management. CRM depends on databases and data mining to help banks "know their customers." To "know your customer" includes understanding her in terms of her season of life. A 45-year-old is not just a 20-year older version of her 25-year-old self. The 45-year-old is typically less concerned about playing to the external world in her buying behavior.

Midlife developmental changes in behavior that members of the Customer Majority are experiencing challenges the view of marketing as a game of persuasion. The object of marketing has been to "capture" customers and overwhelm their wills. Power marketing is OUT. That's why so much marketing is not working. Adaptive marketing is IN. This oneness turns customers into co-creators of marketing success.

Look for part 2 coming next week.

First published on BankersOnline.com 9/23/02

First published on 09/23/2002

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