Unique Window of Opportunity Today For Smart Community Banks

The catastrophe brutalizing the banking industry is at the forefront of both the news and main street conversations around the world. A Gallup survey measuring consumer confidence in banks taken in late September showed an unprecedented drop from 40% in mid-July and is the lowest level in thirty years. Only 21% of consumers polled are confident in U.S. banks today. This erosion of confidence credit unions extends to the wealthy class as well. Among affluent investors, confidence fell in September to its lowest mark ever, since the Chicago research company Spectrem Group’s monthly survey began. Its Affluent Investor Index fell 9 points to minus 22. The decline in the index, which measures the investment outlook of households with $500,000 or more of investable assets, put it below its previous record low of minus 20, reached six months ago last March [2008].

The Need for Communication.

WealthBriefing’s Weekly Poll for the week of October 13 indicates 83% of respondents believe that during difficult market conditions wealth managers should report more frequently to clients.

Unique Opportunity for Community Banks.

In circumstances like this, we see banks becoming too cautious and complacent. This situation has created a window of opportunity for community banks that have escaped the sub-prime mess. Rarely do they get a situation where they can have a clear advantage competing against the Big Guys. Now is the time to become visible when competing banks are invisible or crippled. This is a unique moment in which they can more easily convince small and mid-sized businesses to switch from troubled banks. But they must be visible and they must inspire confidence. And it will not happen by default.

The good news is that many competing banks have reduced their marketing and advertising investment. Therefore, aggressive advertising in such a market means one thing: Unique Opportunity. Marketing dollars will go further and results will come at a quicker rate during this time. Doing nothing means missing this one-time opportunity.

Now is the time to go the extra mile to make sure consumers know you’re financially sound.

Again, while Gallup’s findings for national bank confidence are down from mid-July, dropping from 40% to 21%, they show that local bank confidence dropped from 80% to a much healthier 66% during that same period.

A local community bank can position itself as the caregiver, “taking care of you and your money.” In times like this, it works to their benefit.

The key is to maintain trust. The whole concept of that moment of ‘wow’ between employees and customers at the local bank level means they have to manage it, believe in it, instill it and train with it in mind. The bank must make sure they’re living at that local level.

The general public has all banks in the same basket.

The general population doesn’t make the distinction between Wall Street investment banks and neighborhood banks or deposit banks. Therefore a local bank with open and direct communication with customers is the right strategy. To be silent is a mistake.

A community bank that’s in good shape should proactively communicate a reassuring message to customers and take advantage of this window of opportunity. The objective should be to establish the bank as a leader in the market, tell our customers the facts and give them solid reassurance. Be the trusted information resource for customers. Time is of the essence. They must act now and what they will see is a significant increase in deposits and loan requests.

Steven Sessions has evaluated and developed successful business strategies based on over 25 years of experience working directly with CEOs and Boards of Directors. He has created and managed distinctive branding and effective marketing materials for industry leading companies as well as start-ups and mid-size companies. And we’ve created effective advertising and marketing materials for those companies as well.

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