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Six Changes Bank and Credit Union CMOs Must Make in 2018

If CMOs in the retail banking industry don’t step up and change how they approach marketing, they are putting their careers in jeopardy. The good news is that senior-level financial marketers have an unprecedented opportunity to make themselves more relevant than ever. It all starts with a simple two-letter idea: CX.

Subscribe TodayEveryone remembers the movie The Matrix. Early in the film Neo, the central character, faced a stark decision: would he choose the blue pill or the red pill? Pick the blue pill and you’re stuck in the same reality that you’ve always known — doing the same thing over and over again. Choose the red pill and discover a new reality — a future built on grounded truths about the digital world that defines every aspect of the human experience.

CMOs in the financial industry face a similar choice: the blue pill or the red pill? Pick the blue pill and you face a very real existential threat as you “go with what you know.” Pick the red pill and you’ll lead your organization on an exciting journey into the digital frontier, with an obsession on the customer experience and a renewed focus on growth.

In The Matrix, as Morpheus explains to Neo, take the blue pill, and the story ends. The red pill allows the taker to learn the truth and to evolve.

Watch Out CMOs, There’s a New C-Level Exec in Town

According to a Forrester report, “Predictions 2018: The CMO Bar Rises With More Pressure For Growth,” senior marketers can either elect to step up as digital leaders and champions of growth or quickly cede their power and influence to others in the C-suite.

Consider what happened at Coca Cola. When Coke’s last CMO, Marcos de Quinto, announced his retirement in March 2017, who was named as his successor? No one. Instead, the CMO role went “poof,” and all marketing functions were folded under the newly created Chief Growth Officer. Coca Cola’s CGO is in now in charge of global marketing, customer and commercial leadership and Strategy.

Reality Check: Four out of five CEOs either don’t trust or are unimpressed with their CMO, according to statistics by the Harvard Business Review. Only 10% of CEOs feel that same way about their CFOs and CIOs.

Ouch.

The position of CMO has always been somewhat tenuous. CMOs never seem to last all that long. Now Forrester says more CMOs will disappear altogether, predicting that at least eight more Fortune 100 brands will dump their CMO for good, with no replacement coming in 2018 (or anytime soon thereafter).

So What Do CEOs Want?

For CEOs, it’s all about the customer experience. In 2018, Forrester says 30% of organizations will see declines in CX performance, and those declines will translate directly in net losses. CEOs will be laser focused on CX as the centerpiece of their business strategy and will expect anyone in the CMO role to get on board with CX strategies to drive growth.

If the CMO is unwilling — or unable — to make the shift from traditional marketing focused on advertising to the customer journey with an emphasis on the experience, CEOs will find someone who will step into the vacuum… like a CGO.

According to Forrester, the role of CMO is evolving and adapting to the new realities of the Digital Age. The new breed of CMO has a broader set of responsibilities and skills than their ancestors of the past, encompassing areas that span from CX to data analytics.

To remain relevant (and maintain their job security), Forrester says CMOs must redirect their marketing budget from traditional advertising spending into the following:

  • Revitalizing CX to drive affinity and stem consumer churn
  • Aligning the institution’s loyalty programs with consumer expectations
  • Understanding how to decode digital platform algorithms, figuring out how to use artificial intelligence and machine learning to analyze consumer data and turn it into a scalable brand experience
  • Updating their marketing technology to enable the financial institution to deliver personalized consumer experiences

Six Steps CMOs Must Take in 2018

Here’s what Forrester says CMOs who choose the red pill must do to do.

1. Lead your financial institution’s CX effort. Don’t let anyone else take this on. Start by cutting down any silos between the CX and brand teams. Get CX under the marketing umbrella. Pronto.

2. Embrace emotion. Consumers act due to emotion. You’ve got to understand consumers intimately — what makes them tick? Why do they make the decisions they do? ( Read more: Consumer Marketing Psychology: The Good Reason vs. The Real Reason. )

There are firms that have built their entire business model out of revealing consumers’ motivations. Isobar’s platform, for instance, allows you to conduct your own research into why consumers interact the way they do with your brand, using a combination of explicit theory and validated empirical methodology. Seek to rationalize these emotions using technology. If your institution isn’t somehow diving into your consumer’s emotions, you’re at a disadvantage to those organizations that can.

3. Act on emotional intelligence. Once you know how consumers respond emotionally to your experience (your products, your mobile app, etc.), you can then craft marketing messages that feel right to consumers. It’s CX taken to the next level — coupled with marketing.

Affectiva offers “Multimodal Emotion AI” which uses facial expressions and/or speech to determine emotions. Imagine the power of being able to determine how a consumer actually feels interacting with your mobile banking app. Are they happy or frustrated? The insights would show you where your institution’s app falls short.

“Machines will make the emotional real,” Forrester says in their analysis. “New methods and tech can reveal customers’ emotions, but the important part is that digital technology — increasingly powered by artificial intelligence — lets you rapidly identify and scale up your response to customer emotions.”

4. Use CX to build trust. Many consumers still don’t trust financial institutions. Banks and credit unions can spend marketing dollars on advertising that admonishes consumers to trust their brand, but the efficacy of that approach is disputable. Instead, what fosters trust are positive experiences.
“Trust is something that consumers feel after they have successfully tried your experience,” notes Forrester. “Low-commitment initial offerings like those from Netflix or T-Mobile will become industry standards,” Forrester says. “Truly innovative firms will engage in risk-reducing, trust-enabling design, just like Uber.”

In other words, getting consumers to try your brand in a low-risk situation is much more powerful than any “trust us” marketing campaign could ever hope to be. Netflix gives consumers a one-month free trial. Uber’s CX design uses driver/riding rating systems to increase trust. The thought is, ‘If they can rate me, and I can rate them, I feel more confident.’ This helps Uber overcome trust aversion before consumers hop into the car, says Forrester.

5. Outsource execution, but keep strategy in-house. Good marketing talent is in short supply. If your marketing organization burns up most of its time, energy and resources executing marketing campaigns, that’s a red flag — e.g., others in the C-suite will not see the CMO’s role as strategically important. You can (and should, Forrester says) outsource most — if not all — of the more execution-oriented specialist work, and instead focus on building a team that thinks strategically about little else but how to improve the organization’s CX. You’re looking for folks who can see the big picture and develop strategies about designing a distinctive, integrated cross-channel brand experience, notes Forrester.

6. The CIO is the CMO’s new best friend. There’s a slough of data and technology that the CMO should take advantage of. There’s a mountain of transactional, behavioral and personal data… but mining insights from it can be a real challenge. As CMO, expand your thinking and embrace another role: Chief Data Officer. But you can’t go it alone, and that’s where a good working relationship with your CIO comes in handy.

There’s AI-based technologies that can provide an amazing amount of insights. Introducing AI tools will also help to predict customer behavior and future product interest. You can integrate AI-driven chatbots and digital assistants into your online offerings. Your goal is a granular, data driven view of consumer emotions, behavior, and engagement. Ask your CIO for help.

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Comments

  1. This journey of transformation typically begins with confusion (I know I need to change but what do I need to do to change) and conflict (I know I need to change but change is painful therefore I will fight change). The only way marketers can break free of the confusion and conflict that limits their growth is to first gain clarity and insights through training and education. This path will naturally build courage and confidence as marketers gain new capabilities and competencies.

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