T The Keys to SUSTAINABLE GROWTH HYPER-PERSONALIZATION, RELEVANCE & ROI BY BRUCE CLAPP & BRENT WALKER, MARKETMATCH The banking industry has always been highly competitive and is more so now with the proliferation of consumer options that include non-bank financial services companies, fintech innovators and niche lenders. On average, consumers own 5.3 accounts across all types of financial institutions. Increased marketing noise is also adding to the challenge of standing out from this crowd. The amount that U.S. banks spent on marketing across the U.S. grew 8% to $22.5 billion in 2024, and money spent on advertising is projected to increase by 20% in the banking and lending sector in 2025, led by larger bank spending. The competitive impact on community banks is even more dramatic. That said, many community banks dealing with tighter margins and an unpredictable economy face the pressure of holding marketing budgets flat or decreasing overall spending. How does a community bank stay competitive while navigating these challenges? The key is marketing efficiency and ROI. There are several trends accelerating in the banking and financial services industries that hold great promise for driving marketing efficiency and productivity, including automation, artificial intelligence, advanced data analytics and – probably most tactically important – hyper-personalization. Let’s start by defining hyper-personalization: Hyper-personalization is a marketing strategy that goes beyond traditional “using their name” personalization by using real-time data, AI and machine learning to tailor content, product recommendations and other information that’s highly specific to the individual. It’s about creating unique, personally relevant experiences that resonate with each customer based on their individual preferences, behaviors and life circumstances. Traditional personalization approaches have been limited to including a customer’s (or prospect’s) name in an email or relying on surface-level segmentation such as age, income or assets in targeting a marketing message. Two people who look demographically the same on paper may be motivated by very different priorities. Thus, messaging that is effective for one customer may fall flat for the other, and overall results of a campaign are dampened, efficiency is lowered and ROI is diminished. Hyper-personalization may seem counterintuitive in terms of generating efficiency, requiring the evolution from a singular one-size-fits-all approach to marketing and customer engagement to more versions of a message and a variable channel mix. However, AI and automation can facilitate hyper-personalization without draining the capacity of a marketing team and reduce mass marketing to very targeted delivery (think 500 targeted versus 5,000 mass-marketed). SALES & MARKETING BY THE NUMBERS More sophisticated personalization in bank marketing led to: ▶ 30% more product sales1 ▶ 40% higher revenue2 ▶ 76% more likely to purchase from your brand3 Personalization is tied to high customer satisfaction, which leads to: ▶ 37% higher average balances4 ▶ 87% more likely to purchase additional products5 ▶ 5.8x more referrals6 1 Boston Consulting Group, 2023 2 McKinsey & Company, 2021 3 McKinsey & Company, 2021 4 Avios, 2024 5 Avios, 2024 6 Harvard Business Review, 2022 50 HOOSIERBANKER
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