Research, Refine and Reposition: Three Steps to a More Effective Marketing Strategy in Today’s Marketplace

Research

Refine &

Reposition

three steps to a more effective marketing strategy in today’s marketplace

JOE SULLIVAN| MARKET INSIGHTS 1© 2011 Market Insights

rethink

2© 2011 Market Insights

Restating the Obvious:

THE WORLD HAS CHANGED so have your customers, your

markets, your competition, your challenges, and your

opportunities


“Americans’ Confidence in Banks Not Improving” July 23, 2010


Source: Associated Press, Economic Stress Index , December 2010


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Source: Mint.com“How do Americans feel about the Recession?”

October 27, 2010

© 2011 Market Insights

Source: 2010.Census.gov2010 Census Data

© 2011 Market Insights 7

“ The current financial crisis has saddled banks withmany burdens, not the least of which is a wave of

government regulation not seen since the 1930s.”

Source: ‘Riding the Regulatory Wave’ BAI Banking Strategies - September 1, 2009


Meanwhile,Consumer Expectations are Growing

Brands are barely keeping up with consumer expectations now. Every day consumers adopt and devour the latest technologies and innovations, and hunger for more. Smarter marketers will identify and capitalize on unmet expectations. Those brands that understand where the strongest expectations exist will be the brands that survive - and prosper.

From: ‘10 Branding and Marketing Trends for 2010’ By: Robert Passikoff, President of Brand Keys


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What is the single biggest change you’ve seen in your

markets?

Write it down:


How will you respond?


“Community and regional banks face a series of daunting challenges, but there is ample opportunity for those that pursue strategically aggressive approaches in marketing and branding and that differentiate meaningfully. These banks will break out of the sea of sameness and become leaders in the community banking landscape.”

David Ascher, Transom Consulting Group


taking advantage of opportunities requires strategic choices and

strategic action


1. Research 2.

Refine 3. Reposition

three steps to taking advantage of opportunities in today’s marketplace

JOE SULLIVAN| MARKET INSIGHTS 14© 2011 Market Insights

Research

know your market & know your customers


How much do you really know?


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psychographics

demographics

competitionproduct usage &

demand


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• who are my best customers?

• what are they like?• where can I find them?• How can I reach them?

answer these questions:


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• East Nashville• Germantown

• Cleveland

sample markets:


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Shelby at 10th - East Nashville


6150 Poplar Avenue - Germantown

© 2011 Market Insights 21

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US 11 at Paul Huff Pkwy - Cleveland


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6150 Poplar Ave Shelby at 10th US 11 at Paul Huff PkwyGermantown East Nashville Cleveland 3 Mile Radius Polygon 3 Mile Radius

Market OverviewMarket Size2010 Pop 66,074 13,211 30,978Percent Pop Growth 2010 to 2015 0.18% -0.66% 5.88%2000 Percent Pop Growth 2000 to 2010 5.10% -2.06% 16.21%2010 HHs 29,564 5,236 12,418Percent HH Growth 2010 to 2015 0.91% -0.92% 6.81%2000 Percent HH Growth 2000 to 2010 6.85% 0.17% 21.07%

Demographics

Market Characteristics2010 Avg HH Inc $81,134 $45,833 $57,290Dominant Income Group $50,000-$74,999 (19.71%) <$15,000 (29.13%) $50,000-$74,999 (19.85%)Dominant Age Group (excl. <21) 35-54 (27.87%) 35-54 (30.53%) 35-54 (26.24%)Dominant Education Group Some College (25.98%) Some High School (24.71%) Some College (25.75%)2010 Housing Units, Owner Occ Pct 58.34% 35.76% 59.70%2010 Housing Units, Renter Occ Pct 32.69% 55.97% 33.72%2010 Median Value of all Owner-Occ HUs $174,055 $132,399 $147,896Total Number of Businesses 5,402 484 1,460

Deposit StatisticsDeposit Propensity $5,012 $374 $1,717Deposits Held Elsewhere -$399 $243 $653Deposits Held in FI $5,412 $130 $1,064Total Commercial Branches 61 4 18Savings Bank and Savings and Loan Branches 3 0 2Total Credit Union Branches 4 1 3Current Year Change in Deposits 10.47% 8.29% 1.53%Previous Year Change in Deposits 3.02% -1.63% -1.06%

Loan Propensity $2,347 $238 $803


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Psychographics

Code Group Name Count %Comp Count %Comp Count %Comp Count %Comp

Y1 Upwardly Mobile 133,522 5.34 2,464 8.34 474 9.04 434 3.47

Y2 Metro Mainstream 200,816 8.03 4,558 15.43 740 14.12 1,867 14.90

Y3 Fiscal Fledglings 197,154 7.89 2,211 7.49 1,768 33.77 783 6.25

F1 Flourishing Families 78,996 3.16 1,127 3.81 23 0.44 103 0.82

F2 Upscale Earners 194,360 7.78 2,240 7.58 201 3.85 1,226 9.79

F3 Mass Middle Class 478,336 19.14 1,628 5.51 542 10.34 2,987 23.84

F4 Working-Class USA 578,850 23.16 3,227 10.92 1,087 20.75 1,482 11.82

M1 Financial Elite 47,042 1.88 2,306 7.81 0 0.00 56 0.45

M2 Wealthy Achievers 90,482 3.62 3,134 10.61 58 1.11 543 4.33

M3 Upscale Empty Nests 87,897 3.52 3,351 11.35 21 0.39 785 6.27

M4 Midscale Matures 231,646 9.27 2,357 7.98 128 2.45 1,510 12.05

M5 Retirement Blues 180,352 7.22 935 3.16 195 3.73 753 6.01

Tennessee 6150 POPLAR AVE -

GERMANTOWNSHELBY AT 10TH -

NASHVILLE US 11 AT PAUL HUFF PKWY - CLEVELAND


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Psychographics


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Competitiontalk about your


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$0.0

$10.0

$20.0

$30.0

$40.0

$50.0

$60.0

$70.0

$80.0

$90.0

$33.3

$83.4

$21.7

$54.2

$14.8

$37.1

$9.3

$23.2

$24.0

$60.0

$12.7

$31.6 6150 Poplar Avenue -Germantown


US 11 at Paul Huff Pkwy -Cleveland $0.0

$10.0

$20.0

$30.0

$40.0

$50.0

$60.0

$70.0

$80.0

$90.0

$33.3

$83.4

$21.7

$54.2

$14.8

$37.1

$9.3

$23.2

$24.0

$60.0

$12.7

$31.6 6150 Poplar Avenue -Germantown


US 11 at Paul Huff Pkwy -Cleveland

1-Year & 5-Year Projections


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Deposits/Investments 5 yr. Totals Product Mix (%) 5 yr. Totals Product Mix (%) 5 yr. Totals Product Mix (%)

Retail - Non-interest DDA $2,048,326 2% $1,677,106 5% $1,460,433 2%Retail - Interest DDA $2,480,070 3% $1,494,105 4% $1,982,239 3%Retail - Regular Savings $10,107,319 12% $6,117,983 16% $7,560,574 13%Retail - Money Market Savings $4,631,533 6% $2,582,413 7% $3,524,116 6%Retail - IRAs $18,990,465 23% $9,481,809 26% $15,516,640 26%Retail - CD/Time $7,840,922 9% $4,219,197 11% $6,745,722 11%Investment - Mutual Funds $5,620,881 7% $2,752,404 7% $4,161,218 7%Comm. - Basic Business DDA $5,064,375 6% $635,250 2% $1,642,500 3%Comm. - Business Savings (3) $12,154,500 15% $1,524,600 4% $3,942,000 7%Investment - Stock $8,446,714 10% $3,805,233 10% $9,091,580 15%Investment - Bonds $1,316,008 2% $540,683 1% $930,440 2%Investment - Annuity $4,657,850 6% $2,265,102 6% $3,371,750 6%Total Deposits/Investments $83,358,964 $37,095,885 $59,929,210

Loans 5 yr. Totals Product Mix (%) 5 yr. Totals Product Mix (%) 5 yr. Totals Product Mix (%)

Retail - First Mortgage $18,891,973 35% $12,938,245 56% $14,982,935 47%Installment Loan (4) $587,338 1% $729,538 3% $596,865 2%Retail - Auto Loan $2,735,233 5% $2,464,579 11% $2,685,585 8%Retail - 'Credit Card $2,102,621 4% $1,798,304 8% $2,097,670 7%Retail - Checking Overdraft $515,518 1% $364,496 2% $559,333 2%Retail - Home Equity $2,561,319 5% $1,512,831 7% $2,009,053 6%Comm. - Bus. Term Loan (3) $2,836,050 5% $355,740 2% $919,800 3%Comm. - LOC Loan (3) $14,585,400 27% $1,829,520 8% $4,730,400 15%Comm. RE (3) $9,419,738 17% $1,181,565 5% $3,055,050 10%Total Loans $54,235,190 $23,174,818 $31,636,691

6150 Poplar Avenue - Germantown

Shelby at 10th - East Nashville US 11 at Paul Huff Pkwy -

Cleveland

Projections: Product Breakdown


“The true power of research is in the insights and action.”

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Jeff Rosenblum, “Why data is ruining this industry” Ad Age, March 2011


Refine

make choices


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Name one company that serves a specific

segment of the market

Share with your neighbor:


Targeted Marketing

JOE SULLIVAN| MARKET INSIGHTS 32

to reach consumers based on various traits such as demographics, purchase history, or observed

behavior


Targeted Marketing


the act of making the right offers to the right customers at the right time


Targeted Marketing


the alignment of marketing efforts with the benefits sought by individual

market segments


We are the bank for ___________.


We are not the bank for ___________.


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New Account Openings by Segment


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Channel Usage by Segment


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Reasons for Switching by Segment


“ING Direct has built the fastest-growing bank in America by saying no. When customers ask for a credit card, the answer is no. When they ask for an online brokerage, the answer is no. When they ask if they can open an account with a million dollars in it, the answer is no. ING wants to keep things simple. That’s why the bank offers just a few savings accounts, certificates of deposit, and mutual funds – and that’s it. “

Jason Fried & David Heinemeier Hansson, Rework


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What are your bank’s strengths?

Write it down:


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Which of those strengths are currently

unique?

Write it down:


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Are any of those

irreplicable?

Write it down:


It’s all about focus and choices:targeting specific market segments who live in a

defined geographic market area, that have certain

delivery channel preferences & product needs, and can easily see and value how we’re different from our competition.


(Re)position

take action


alignment

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customersneeds

valuespreferences

products

delivery channelsmessages people

services

experience


“One of the most powerful principles in building a brand is focused alignment. The result of alignment is coherence; the result of non-alignment is wasted resources.”

Marty Neumeier, Zag


characteristics of strong positions: strong positions are differentiated & relevant; they communicate value in a meaningful way; and they inform the entire customer experience.


strong positions are:

• ownable• leveragable • sustainable • extendable


3 kinds of differentiation:

• transient • circumstantial • strategic


strong positions are not generic, broad, hollow, easily replicable, easy to develop, or easy to deliver.


52

If your bank’s brand were a famous person, who

would it be?

Write it down:


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If your bank’s brand could be any famous person,

who would it be?

Write it down:


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What action steps will need to be taken to move from your current position to your refined position?

Share:


The 4 P’s of Marketing

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• product • price • place

• promotion


And now…

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• people • partners • processes


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Alignment

• product • price • place• promotion

target market

market opportunities• people

• partners• processes

your brand position

marketing


“I don’t think you can be very successful in leading your company on a path to growth if you don’t pay a lot of attention to the market you serve and how your company markets itself…a leader’s vision for the future of the company must be based on a clear understanding of what is happening in the marketplace.”

Ray Davis, CEO of Umpqua Bank


thank you.


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contact:[email protected]

twitter: @mi_sullivan

800-348-0220 | 312-961-0188

www.formarketinsights.com


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