Motivating Megabank Customers to Bank Locally

Megabanks, the giants of the banking world, are dominating market share and leaving community banks struggling to compete. It’s clear that big banks have a grip on consumers. According to BankNews, even though 66% of adult consumers say they’d rather bank locally, only 23% say they’re actually likely to switch banks. High fees and big-box policies are creating unhappy customers, and local banks know they can treat customers better than their large-scale competitors. The question for community banks is, what can you do to regain market share and convince customers you’re a better banking option? In this article we’ll show you how to motivate megabank customers to bank locally by getting their attention and giving them a reason to switch.

The Megabank Advantage

In order to compete, you’ll need to acknowledge what you’re up against. Let’s look at the allure of the largest banks like JP Morgan Chase, Bank of America, Wells Fargo, and Citibank.

Convenience: You simply can’t compete with the number of ATM’s offered by a megabank – many even have global locations. Combine that with the number of branch locations nationwide, and consumers know their megabank is nearby when they need it, even while traveling.
Technology: Megabanks are often the first to offer cutting-edge services such as talking and multilingual ATMs, peer-to-peer banking, and online banking and bill pay options.
Services: Megabanks often have a deeper menu of services that includes estate planning, brokerage services, and trust officers. Even small business loans, the bread and butter of community banks, are beginning to lose volume to megabank competitors.
Advertising: The largest banks have brand recognition. The FFIEC reports that megabanks collectively spend over $17 billion annually on advertising and marketing. Bank of America alone spends as much as $1.6 billion annually, according to Adweek.

Local Is Still Better

It may seem daunting to go up against the advantages of a megabank, but, like every fabled giant, megabanks have their weaknesses. These are the areas in which your local financial institution can shine.

Flexible and Customized Products

Due to their size and national presence, megabanks offer standardized products. Community banks, on the other hand, have the ability to customize their services and products to match the needs of their community. Larger banks often won’t change their menu of services to be community-specific and are slow to adapt to the economy and consumers’ desires because of corporate red-tape. Community banks also do better when it comes to fees, a common source of customer frustration with megabanks. Overall, local financial institutions offer more free accounts, charge fewer fees, and often provide better interest rates. In 2012, U.S. PIRG reported that only 24% of big banks were offering free checking compared to 63% of small banks. So while megabanks may provide the convenience of an extensive ATM network, local banks can compete by offering free out-of-network ATM usage and/or reimbursements of a certain amount of ATM fees charged by other banks.

Community Impact

Consumers who choose to bank locally create a direct impact on the growth and health of their local economy and community. Instead of simply parking their money at a large, national bank chain, consumers are partnering with their community bank to invest locally. This investment allows community banks to make loans to local businesses, as well as additional resources such as financial advice, online resources, and networking opportunities for community entrepreneurs. Your financial institution can emphasize this advantage by highlighting your investments in local businesses as well as your charitable giving and community involvement on your website and in physical branches.

How To Motivate A Switch

As a community bank, you know that the economic health of your business contributes to the overall health of your community. Public awareness is with you on this, as the movement to reinvest in community businesses has become mainstream. Yet while “shop local” decals may bring more customers into the local hardware store, making the commitment to community banking isn’t always as easy. Here are 4 key points to use in your marketing and communication materials to motivate people to make the switch.

Lower Fees: Megabanks have a fee for just about everything, and they continue to raise their rates. If you’re offering fee-free banking or free checking accounts, be sure to advertise these products. Do you offer ATM fee reimbursement? Advertise these perks and dispel any worries that you can’t compete with the convenience of a larger bank.

Service & Products: Small banks offer many of the same products as national banks, only better. Play up your excellent customer service and the customizable products that are tailored to the needs of your community.

Community: By creating jobs, giving back to local charities, and serving on local boards, small banks are true partners with their community.

Environmental Concerns: National divestment campaigns are underway, promoting the shift away from megabanks that use their assets to invest in oil, gas, and chemical industries. Organizations like Green America offer a step-by-step guide to assist consumers who want to switch to a community bank. If your bank invests in sustainable or socially-responsible companies, be sure to market it.

These are the general benefits of community banks like yours (for deeper insights see our comprehensive guide to why you should bank locally). Of course, your bank probably has additional characteristics that distinguish it from the competition, such as a longtime presence in the community. Whatever sets you apart, be sure to include it in your talking points. You can also survey your existing customers and branch staff to find out what motivates people in your community to bank locally.

Differentiate Yourself

While community banking is starting to sound better to some consumers, you’ll still need to offer concrete advantages that add weight to a potential customer’s decision to switch. In order to lure customers away from their megabank, offer something different. Here are some ideas for maximizing your appeal:

Link to a “free switch kit” on your website. One of the biggest objections people make to switching banks is the hassle of linking a new account/debit card number to direct deposit and bills they have on autopay. If you can make this easier for your potential customers, they will be more likely to make the leap.
Offer high-quality products that have noticeable advantages over megabank products. Keep these products fresh by quickly adapting to the economy and your community. For example, you may participate in special incentive programs for first-time home buyers.
Pamper your customers. It may seem trite, but many customers will choose the bank that offers free swag or coin counting over one that doesn’t.
Showcase community connections with athletic sponsorships and tables at local events, displaying your logo on neighborhood sports jerseys and ball fields, and partnering with local businesses and charities.
Be responsive to the community’s needs by offering flexible, customer-friendly policies. Empower your employees to make decisions that meet local needs and retain customers.
Save your customers money by charging fewer fees for ATM access, overdrafts, and account maintenance. Megabank fees are extensive and still increasing.
Offer rewards for referrals and incentives for choosing new accounts or services.

Digital Marketing For Megabank Customers

Once your community bank has identified what makes it unique and differentiates it from national competitors, it’s time to convey this message online. Below you’ll find the four best ways to invest your online marketing dollars and attract new customers.

Search Engine Optimization

The Internet may have a global audience, but when it comes to digital marketing there’s an advantage in being local. Megabank chains must focus their marketing nationally and avoid narrowing their focus to a particular region. This puts them at a disadvantage for two reasons–they’re competing with other megabanks for national keywords and they can’t locally optimize their content as specifically as a community bank can. Local SEO means targeting customers who are searching online with local intent at any level: region, state, county, etc.

Community banks can use local SEO to their advantage by placing relevant keywords throughout their websites in content, meta titles, and descriptions. For example, a community bank in Wilmington, North Carolina should mention nearby towns and neighborhoods like Leland, Ogden, and Hampstead. A larger bank may also serve Wilmington, but it won’t have the same hyper-local content and may miss a consumer searching for banks near Leland. Local SEO is essential to outperforming megabanks in a regional search. This is a huge strength, so be sure to utilize location-specific keywords on every product page of your website.

Your online business listings are another area where you should invest your time. Local listing on sites such as Google My Business, Bing Places, Yelp, and Facebook Places should be claimed and optimized. Megabanks aren’t doing this, so take advantage of these listings. By creating a fully-optimized listing, you are giving your bank more real estate in the search results.

Content Marketing

Local banks better meet their customers’ needs by understanding their community and the individuals within it. Unlike megabanks whose web content must speak as well to customers in New York as it does to those in Texas, community banks can address their neighborhood specifically with content marketing. To do this, you need to create web content that ties in with the needs of your community. For example, if you have an agricultural customer base you’ll want to produce content around that topic. Make your web pages and blog posts useful so that people will share them with others.

Other examples of localized content marketing include a home-buying guide for your specific county, resources for starting a small business in your region, and planning for retirement in your city. These community-focused topics provide value to your target audience. Megabanks and other websites may produce generalized articles on these topics, but smaller banks have the upper-hand in publishing articles of regional interest that will rank higher in localized search results.

Pay-Per-Click Ads

Unlike SEO which takes time to build results, local PPC for banks lets you compete with megabanks instantly by placing you at the top of search engine results. This only works for specific search queries, so you need to identify keywords people might actually search for that are related to your marketing goals. Take time to narrow your focus to specific areas and save advertising dollars by bidding on keywords that may not have much competition. For example, if you’re trying to boost your mortgage business and your largest competitor is Wells Fargo, you’ll want your PPC ads to respond to searches for “mortgage loans from Wells Fargo” and “mortgage lenders near me.”

Once you’ve decided what queries your ads will target, it’s time to decide who you want to see your ads. AdWords has exceptionally powerful local targeting options that allow you to choose very specific geographic regions, meaning only customers in certain locations can see your ads. You can even target potential customers within a certain radius of your locations by using proximity targeting. If you think it’s unlikely that someone would be a customer of your bank if they’re not within five miles of a branch, then you can choose to only run ads to individuals who are within a five-mile radius of each branch location.

Finally, what will you say in these ads? Your ad may be shown alongside megabank ads in search results and you need to stand out. Localized text can help motivate customers to choose your community bank over a megabank. Your ad text should highlight your commitment to providing exceptional banking services to your community. A well-worded ad line that mentions your product and local connection has more appeal than a generic megabank ad. Here are a couple fictional examples of localized ad text:

Fast and local loans in Stafford County since 1891 – First National Bank.
First National Bank – Serving small businesses in Stafford County VA since 1981.
Mortgage loans from First National – Find the home of your dreams in Stafford County.

Social Media

Rather than pushing your products on social media, focus on building brand recognition. Publish content that highlights your unique qualities and keep the focus local. Share photos from your community involvement and announce local events that you’re supporting or attending. You can also promote local businesses that have received financial services from your bank or announce community outreach programs like food and clothing drives. Over time, both existing and potential customers will recognize your logo and internalize the community-focused story told by your social media posts. Find more best practices in our guide to social media marketing for financial institutions.

Bring Customers Home

In order to win customers away from national megabanks, you’ll need marketing expertise that maximizes the advantages of being a community bank. Whether you need help improving your web content, implementing proper SEO, effectively targeting your PPC ads, or planning a social media campaign, BankBound has the expertise to help you in every stage of marketing. Contact us today to learn how we can help convince megabank customers to make the switch to your bank.

Motivating Megabank Customers To Bank Locally