Ditch Digital? One Banker Bets His Bottom Dollar on Old-Fashioned Idea

Ditch Digital One Banker Bets His Bottom Dollar on Old-Fashioned IdeaThere’s an interesting commentary by Kevin Tynan recently published on the American Banker website. In his essay, “Banks Have a Case of Digital Marketing Myopia,” Tynan, who is senior vice president of marketing at Liberty Bank for Savings in Chicago, argues that the rush to digital marketing might not be good for banks.

“The rush to digital marketing has taken on a life of its own,” Tynan says. “Search engine optimization, content marketing, and social media are hot topics driving bank marketing conversations, financial blogs, and campaigns.”

While Tynan admits that the cost efficiencies of digital approaches can be enticing — banks for years have spent beaucoup bucks on print and electronic media to lackluster result — he believes “bank marketers have bypassed critical thinking and strategic planning.”

So, what’s Tynan thinking? This truth teller insists there are (at least) three important customer groups that digital marketing tactics may fail to reach.

“High-balance, high-profit customers in community banks tend to be 65 or older. They are also less likely to have mobile accounts, use bill-pay services or even have email addresses,” notes Tynan. “Forty-four percent of people over age 65 do not use the Internet, according to a 2013 study from Pew Research Center. The percentage is even higher among those over age 75. In my experience, this critically important age group often controls a substantial portion of deposits. No amount of pay-per-click advertising or social media postings will reach them. They remain a segment that must be reached by mail, telephone or in-person visits.”

Dark ages marketing over digital? Yes, Tynan says, even for the young.

“Digital marketing efforts may also fail to land with the financially struggling customers who frequent community banks,” Tynan says. “These customers straddle the line between banks and non-banks. They may have a bank savings account as well as a pre-paid card from Walmart; they might visit banks to cash checks but turn to payday lenders for a loan when their car breaks down. Because people in this group may feel intimidated or uncomfortable using banks, they place a high premium on personal service.”

OK, but there are millennials, right? Don’t they constitute a market for digital approaches?

True, they’re hooked up to smartphones and iPads and tuned in to the latest in digital technology. But they’re also something else, according to Tynan: wary and jaded.

“People in this age group tend to be wary of banks, especially national institutions,” Tynan explains. They value authenticity in relationships, are financially cautious, and want money management help.”

Tynan laments the current bank strategies when it comes to millennials.

“And what do we do? Send them more emails. They want hand-holding; we send emails. They want advice; we send emails. This strategy is unlikely to spark enthusiasm among an already guarded group.”

What to do? Amazing, but true: Tynan makes the case for snail mail.

“A better alternative may be to go with old-fashioned snail mail, according to a December 2011 Nielsen report,” Tynan advises. “Ninety-two percent of millennials said that direct mail was likely to influence their choice of stores, while 78 percent said the same of retailer emails. Millennials regard a personalized letter (not a mass mailer) as a novelty. It grabs their attention and makes them feel special. But it’s more expensive for banks to send printed material, so emails are what they get.”