Marketing to the Banking Industry
Presented by:
Richard Blabolil
President of Marketing Innovators
July 17, 2006
3:00 – 3:30 pm CDT
IMA – Outreach Committee
1.
Establish a template for approaching market segments
2.
Identifying the appropriate tradeshows, periodicals and
associations/organizations which serve the vertical
3.
Establishing strategic alliances with critical vertical members/experts
4.
Identifying the key issues confronting the vertical
5.
Identifying the key terms and language of the vertical
6.
Establishing a “beachhead” by which our members can follow-up with their own
marketing and sales resources
7.
Establishing opportunities for IMA to deliver education
8.
Establishing the appropriate technology link and/or portal (eg. IMA web site) to
host and communicate this information. Establish links to articles, etc.
2
Fortune 1000 Strategy
Identify Critical Success Factors (CSFs)
Critical
Success
Factors
1. Current Clients. Examine current clients in the niche; contact them and
ask what industry and organizational factors are important and
why. Ask how the industry measures each factor.
2. Annual Reports. Read annual reports for companies in the industry,
and other information that profiles the industry.
SIC
Code
3. Red Herrings. The prospectuses issued by organizations in the
industry, which illuminate risk factors in the analysis section.
Determine
Cost
Structures
4. U.S. Industrial Outlook Published annually by the Bureau of Economic
Analysis of the Department of Commerce, this book predicts the
growth profile of development for the next five years.
5. Stockbrokers. Stock analyst who specialize in the niche, know all the
CSFs within the industry and the companies leading the pack.
Track
Niche
Dynamics
Niche
selected
Identify
Key
Publications
6. Business Magazines. Any periodicals that provide insight relative to
opportunities and challengers within an industry.
7. Others Consulting to the Industry. Consultants can themselves be
resellers, influentials and/or resources of information for particular
niche penetration initiatives.
8. Industry Trade Associations. Research association published studies
regarding industry growth factors and opportunities and
challengers.
9. Commercial Bankers. Banking analyst that serve the industry can
share the criteria they use in evaluating business models relative
3
to specific industries.
Identify
Key
Ratios
Determine
Infrastructure
Analyze
Market
Track
Market
Factors
FIGURE 1.6 Understanding Selected Niches
Fortune 1000 Strategy
Identify Key performance ratios
Critical
Success
Factors
Key business and financial publications. Dun &
Bradstreet. Annually publishes Key Business
Ratios, which presents 14 ratios for 125 lines of
business.
SIC
Code
Determine
Cost
Structures
Accounting Corporation of America. Publishes
Parameter of Small Businesses, which classifies
its operating ratios for various industry groups.
Trade associations publish industry specific ratio
studies.
Identify
Key
Ratios
Track
Niche
Dynamics
Niche
selected
Identify
Key
Publications
Industry Analyst provide detailed performance ratio
studies.
Determine
Infrastructure
Analyze
Market
Track
Market
Factors
FIGURE 1.6 Understanding Selected Niches
4
Fortune 1000 Strategy
Determine Cost Structures
Critical
Success
Factors
The financial resources that are used in the
development and/or acquisition of other resources
used in the performance of a business function or
operating process. Identify the cost centers within
each business that IMA can affect positively.
SIC
Code
Determine
Cost
Structures
Research cost structure information in major
publications read by Clients and prospects.
Review the following directories:
Track
Niche
Dynamics
Niche
selected
Writer’s market
Working Press of the Nation
Bacon’s publicity Checker
Oxbridge Directory of Newsletters
Hudson’s Newsletter Directory
Gebbie’s All-in-One Directory
Magazine Industry Marketplace
Identify
Key
Ratios
Identify
Key
Publications
Determine
Infrastructure
Analyze
Market
Track
Market
Factors
FIGURE 1.6 Understanding Selected Niches
5
Fortune 1000 Strategy
Critical
Success
Factors
Tracking the Dynamics of the Niche
Tracking the changes, tends, legislation, and other
factors affecting the industry is an on-going
process. The easiest way to do this is to identify
the major publications serving the industry. Again
refer to the following directories:
Writer’s market
Working Press of the Nation
Bacon’s publicity Checker
Oxbridge Directory of Newsletters
Hudson’s Newsletter Directory
Gebbie’s All-in-One Directory
Magazine Industry Marketplace
SIC
Code
Identify
Key
Ratios
Determine
Cost
Structures
Track
Niche
Dynamics
Niche
selected
Identify
Key
Publications
Determine
Infrastructure
Analyze
Market
Track
Market
Factors
FIGURE 1.6 Understanding Selected Niches
6
Fortune 1000 Strategy
Identify the Publications
Critical
Success
Factors
The easiest way to do this is to identify the major
publications serving the industry. Again refer to
the following directories:
Writer’s market
Working Press of the Nation
Bacon’s publicity Checker
Oxbridge Directory of Newsletters
Hudson’s Newsletter Directory
Gebbie’s All-in-One Directory
Magazine Industry Marketplace
SIC
Code
Determine
Cost
Structures
Track
Niche
Dynamics
Niche
selected
Identify
Key
Publications
When specific publications are identified review the
following:
Readership Demographics
Editorial Guidelines – define nature & scope of
information
Special Issues – highlights of Industry developments &
trends
Obtain subscriber mailing list
7
Identify
Key
Ratios
Determine
Infrastructure
Analyze
Market
Track
Market
Factors
FIGURE 1.6 Understanding Selected Niches
Fortune 1000 Strategy
Define infrastructure/Track Market Factors
Critical
Success
Factors
1. Annual Reports. Read annual reports for companies in the
industry, and other information that profiles the industry.
SIC
Code
2. U.S. Industrial Outlook Published annually by the Bureau of
Economic Analysis of the Department of Commerce, this
book predicts the growth profile of development for the
next five years.
3. Stockbrokers. Stock analyst who specialize in the niche,
know all the CSFs within the industry and the companies
leading the pack.
Identify
Key
Ratios
Determine
Cost
Structures
Track
Niche
Dynamics
Niche
selected
4. Business Magazines. Any periodicals that provide insight
relative to opportunities and challengers within an
industry.
Identify
Key
Publications
5. Others Consulting to the Industry. Consultants can
themselves be resellers, influentials and/or resources of
information for particular niche penetration initiatives.
Determine
Infrastructure
Analyze
Market
6. Industry Trade Associations. Research association published
studies regarding industry growth factors and
opportunities and challengers.
Track
Market
Factors
FIGURE 1.6 Understanding Selected Niches
8
Financial Services
•
Insurance
•
Mortgage
•
Brokerage
•
Automobile lending
•
Banking
– 33 of the largest banks, collectively represent almost half of all FDIC – insured
deposits.
– Tremendous consolidation
– Customer satisfaction = customer commitment
Banking & The Financial System
•
Banks serve as intermediaries between the primary lenders, or
depositors, and the ultimate borrowers.
•
Since the deregulation of the 1980s and 1990s, the differences
between the types of financial institutions have become indistinct.
•
Commercial banks, savings and loan associations, savings banks,
credit unions, and money market funds compete with nearly identical
products and services.
•
Business finance uses analytical skills in the planning, management,
and control of financial resources. The risk and return consequences
of financial decisions are evaluated, including the accumulation of
company assets (equipment, buildings, inventory, and securities)
and choice of financing alternatives (selling stock, borrowing, issuing
bonds).
There are many kinds of banks
1.
Savings Banks – these banks can also be called “Thrifts”, and are
businesses that are for-profit. Savings Banks take deposits of
money, invest that money, and pay the depositor interest out of
the money made from those investments. Some Savings Banks
give credit to depositors.
2.
Credit Unions – these banks are non-profit financial institutions. A
Credit Union is owned and controlled by those doing business
there. Membership is needed to get into a Credit Union, normally
determined by where the person works, their location, or possibly
where the go to church.
3.
Commercial Banks – these banks used to only deal with
businesses, but have extended their services to individuals.
Commercial banks offer individuals most of the same services as
other types of banks.
There are many kinds of banks
4.
Savings & Loans – these banks usually provide savings accounts.
Money deposited into these banks is then loaned out to local
residents in the community, normally for home loans.
5.
Investment Banks – these banks do just what the name
says…they invest. Investment Banks buy and sell stocks and
bonds and give investment advice to its clients. These banks do
not accept deposits, make loans, and are not insured by the FDIC
(Federal Deposit Insurance Company).
Highly Regulated Industry
•
Financial Services has always been regulated, it has intensified
since 9/11
•
Insurance industry has infiltrated segment
•
USA Patriot Act
– Tools Required to Intercept and Obstruct Terrorism
– http://www.epic.org/privacy/terrorism/hr3162.html
•
Basel II
– Capital adequacy, international banks
– http://www.federalreserve.gov/generalinfo/basel2/
•
Gramm-Leach-Bliley Act of 1999
– Financial Services Modernization Act
– http://banking.senate.gov/conf/grmleach.htm
•
International Financial Reporting Standards (IFRS)
Key Industry Issues
1.
Consolidation – Achieving strategic balance
2.
Bonding with Customers
3.
Grooming the next generation of talent
4.
Offshoring: call centers, internet banking, technology
5.
Changing payment standards and card innovations
6.
Monitoring credit quality
7.
Achieving comprehensive governance of risk management
8.
Regulation compliance
9.
Greater efficiency and agility
10.
Multi-channel initiatives
Customer Satisfaction = Customer Commitment
•
Customer Commitment (emotional attachment)
– Customer experience
• Convenience of branch locations
• Product offerings
• Transaction channels
• Accuracy
• Fees
• Problem resolution
– Image of the institution
– Propensity of the customer to be loyal
Other Information
• Top US Banks
• Banking Links
• Associations, Industry related organizations
• Tradeshow and Events
• Periodicals
• Articles, Research
Glossary
•
Annual percentage rate (APR): The interest rate paid if funds are left on deposit for one
year.
•
Annual percentage yield (APY): The amount of interest earned on interest-bearing accounts
(checking, savings, CDs), including the added effect of compounding if the money remains on
deposit for one year.
•
ATM card: A bank card that allows a person to withdraw money electronically from a
checking account.
•
Automated teller machine (ATM): Machines that allow customers to deposit or withdraw
money from their bank accounts. You must have an ATM card to use an ATM machine.
•
Balance: The amount of money in a bank account.
•
Bank statement: A monthly or periodic summary of a customer's bank transactions.
•
Basic banking accounts/Lifeline accounts: Some states require financial institutions to
offer special accounts for low-income customers. The number of transactions each month
may be limited.
•
Bounced check: When you write a check for more than you have in your checking account,
your check bounces. Also called an "overdraft."
•
Cash back: Many merchants who accept ATM or debit cards for purchases allow customers
to withdraw a limited amount of cash at the same time.
Glossary
•
Compound interest: Interest that is paid not only on your initial deposit, but also on the
interest you've earned.
•
Debit card: An automated teller machine (ATM) card with a MasterCard or Visa logo on it
that is connected directly to your checking account. When you use a debit card, money
goes immediately from your account to the company you are paying.
•
Direct deposit: Electronic deposit of wages or benefits into a person's bank account.
•
Finance charges: The price lenders charge for the use of their money, including interest
and required fees.
•
Interest: A percentage amount paid by banks to depositors for the use of their money, or
by consumers on a loan.
•
Principal: The original amount of money deposited into a bank account before any interest
payments are made, or the basis of a loan.
•
Modified adjusted gross income: Yearly income including wages, interest, dividends and
capital gains minus (if applicable) business expenses, investment losses, education
credits, individual retirement account (IRA) contributions, moving expenses and alimony.
The adjusted gross income is used to calculate federal income tax as well as to determine
eligibility for programs such as the low-income Earned Income Tax Credit or your ability to
claim certain tax deductions, such as IRA contributions.
•
Savings: Money put aside to accumulate and earn interest.