Florida Banking October 2023

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Spend Resourcing Growing Your Reputation, Not Chasing Deposits Keys to Capitalizing on Your Bank’s Perception in Florida

Written by Corey Wrinn, Rivel Banking Research for Florida Banking

As interest rates rise, mergers increase, and competition heats up, so does bank switching. According to the latest Rivel Banking Benchmarks collected across the country, Florida has an exceptionally high opportunity with 31% of retail customers and 30% of commercial businesses vulnerable to changing their primary bank in the next six months. So how do you capture more than your fair share of new customers? The first step in attracting new customers is to make sure they know you exist. This is not as easy as it seems. For instance, across the Florida, the average banking institution has about 33% awareness among households in its own trade area. This means that, again on average, 67% of the homes in a bank’s trade area do not know the bank even exists. A bank must drive up awareness through marketing, advertising, branch placement, word-of-mouth, and social media to make a dent. All that takes effort and money, so you need to assess if you are putting enough emphasis here to attract new customers. The second step is to spend the marketing dollars wisely to develop a strong brand image. This includes making sure you are building key brand elements like Trustworthiness, Community Contribution, and Customer Service. How does your bank look to potential new customers on these elements? Be specific – not nationwide but focus on your bank’s specific footprint. In Miami-Dade, for example, the institutions with the best reputation for Technology are not just the national banks, but a mix of credit unions and community banks. The third step is to focus your marketing on the most effective message. A generalized message of “we are a great bank with friendly people” hasn’t worked in most markets for a long time. This is not because people don’t want friendly bankers, but because they already have friendly bankers. For example, in the latest Benchmarks (Q3 2023) for Orlando, only 4% of potential switchers said the staff at their current bank was not friendly. It would be far more effective to focus on real pain points cited by a much higher percent of Greater Orlando households (like ATM

access, value for fees, or prioritizing their financial needs). The #1 thing people and companies are looking for in a new bank is to solve the #1 pain point they had with their old bank. Additionally, you may think of focusing on needs of the consumers you are actively courting. According to Rivel’s research in the Florida over the past year, 77% of retail consumers are seeking a new product this year. Credit cards at 40% and savings accounts at 29% sought are even more in demand by Millennials (48% and 36%, respectively) looking to establish their banking relationships and secure their future. The above three steps are clear, but how does a bank figure out its awareness, its brand position, and the key messages it should use to attract new customers? You ask them. You can do this by conducting your own rigorous market research survey program across your footprint. Building an internal professional market research team can have a terrific impact but is expensive and time-consuming. Alternatively, you can start by subscribing to one of the research services that already collect this data in your local trade area (like Rivel). No matter which way you do it, it is important to do it at a large enough scale for it to be statistically reliable. Relying on “gut feel” or just a couple of anecdotes might work once or twice, but it always fails in the long run. Remember, you cannot improve what you do not measure .

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. To learn more about Rivel Banking Research, visit www.rivel.com/CXLign or contact Corey Wrinn, cwrinn@rivel.com.