Special Report/Bank Marketing How to make a marketing plan “The banker who develops no marketing plan is doomed to the life of a fire fighter.” By WARNER N. DALHOUSE, Senior Vice President, First National Exchange Bank, Roonoke, Va. ‘There are thousands of banks, per haps a majority, that still make no effort toward developing a plan for marketing their services. These banks generally. are small or medium in size: but there ate some lage banks included as well ‘The reasons given for not developing a marketing plan are classic: “We've got too much else to do, just to run the bank” or, “We're not really big enough to get very scientific about what we do around here;" or, even more sadly, “We've gotten along prety well without all that up to nov.” ‘The ironic part of these attitudes is that putting together a plan for markel- ing negates all of them. It is the easy tuay out. Not to plan is more difeult Notplanning i Tike slipping on the Top Step to see how you'l fll ‘The banker who sill thinks he “hes too much ese to do, just to run the bank” has not yet grasped the job of running the bank. However he goes about it, his job is ono of maximizing srowth and profit. However simply that Seems stated, i isa frighteningly com. plex and demanding job in. today’s World, regardless of the size ofthe bank Theodore Levitt of the Harvard Graduate School of Business has ssid that marketing is “uncommonly replete with uncontrolled, uncontrollable, tnstandardizablo and unpredictable hazards. Like polities and sex, matket ing isa squishy subject.” So. is banking « “squishy” subject 40 OUTLINE ‘The Stonier Graduate Schoo! of Banking has developed this outline for a ‘marketing plan that can be used as a beginning point for any size bank A. Historical position of the bank B. Current markot analysis 1, Analysis of customer needs 2. Share of market 3. Competition analysis C. Problems and opportunities D. Past strategy E, Long-range goals F. Short-term goals (one year) 1. Individual officer goals 2. Division/department goals 3. Total bank goals G. Strategy-the various “plans” for goal attainment (one yeat) 1. Marketing research plan 2. Product development plan 3. Sales plan 1. Officer sales b. Staff sales «. Sales training 4, Advertising/promotion plan '5, Public relations/communica- tions plan 1H. Budget/Cost-benefit analysis 1. Evaluation and control. system ‘To get started in the development of an outline, consider these points HISTORICAL POSITION This calls for direeting attention to trends that affect the bank's mar ket, key elements in past growth, the way the bank is organized, its com- petition, the primary users of the bank's services. Here is properly do- fined the bank’s historical position in the market in ‘lation to its past goals. The marketing plan will place the current position in perspective with past situations to convey an insight into what the particular prob- Jems might be in achieving future ‘goals: What has been the trend in do: posits, loans, gross income, net profit, number of accounts, or other key measurable objectives in recent years? Also, for major competitors? Who have traditionally been the primo users of the bank's services? How have key markets boon tradi tionally identified? How is the bank organized to generate new business? Have the quality and breadth of products kept pace with those of competitors? (CURRENT AND FUTURE The plan should concern itself With the needs of present and poten: tial customers, the desired share of the market, the forces of existing competition for new services that may come into this market and any anticipated future business develgp- ‘ment situation. Also, the plan should include an evaluation of current and future market position in relation to profit objectives: Who are the bank's customers and the customers of major competition? How much business comes from the top 20% of the bank's accounts? Which markets or segments of specific markets appear most likely to yield a good return on invest ment? What advertising, sales promotion, and sales techniques are competitors using? What fs the price environment of the marker? What are the current social, eco- nomic, technological and legal trends that will afoct the bank’s business? PROBLEMS AND OPPORTUNITIES Which of the following possible problems and opportunities are part Of the bank's current business de- velopment position: Modification, combination or de- letion of current services? Operations and quality of service? Internal roadblocks? Equipment and physical surround: ings? Training? Computer time? ‘Availability of funds? Corporate policies? BANKINGAnd more and more banks are realizing where “banking” and “marketing” meet, Operating with a marketing con: cept of management, the corporate goals become much clearer and more easily Marketing becomes easicr with a basic plan as a starting point. Developing the marketing plan becomes less forbidding if it appears as a practical, simple, rather than something or time. consuming, It is true that banks have gotten along fairly well even without planning, ‘Things have been rather cushy since World War Il, however. An orangutan could have run most banks and shown progress. And that has happened in Now things have changed. Nothing is Our competitors have come alive, both within the Industry and without. Devices being developed by other banks, S&L, credit unions, mutual funds and a whole other competitors to capture the cash reserves and credit business of bank customers are almost revolutionary. The ground rules under which we operate aro changing rapidly, and the role of commercial banking as we have known itis being questioned. People no longer bank at this place for that place because the bank is bigger, or the building is prettier, or a previous generation banked there, People are more skeptical. Budding Ralph Naders pop up at every turn. People want to know that what we offer is quality stuff. They want practical, useful, mean Ingful services, not window dressing ‘They want services custom-designed for their own particular needs, their own age, their own life styles. And they want these serviees at fair prices; they will shop around to be sure the prices are right. In_today’s “future shock” at mosphere, itis no longer possible todo things the hard way and make progress. We simply don’t have lime not to plan We can no longer afford the luxury of trial-and-error with ideas that occur on the way to work in the morning. In addition to the obvious need to meet competition, and stay whole visa vis, the failure to plan overlooks the opportunity to develop new ideas which such planning ean uncover. Dr. Leonard Berry, Department of Marketing at Virginia Commonwealth University, Richmond, puts it this way: “Under the marketing coneept, it is not only important to do things right, i is also important to find the right things to do. ..It is important to maximize opportunity which leads to attainable asy-way-out, “selentific”™ army of chairman of the Aveusr 1972 increased profits, to allocate your precious resources in exploiting oppor tunities rather than solely solving prob: lems.” The banker who develops no market: ing plans is doomed to the life of a fire fighter. He will seldom, if ever, be able to innovate. He will develop a procedure of management by criss and become a reactionary by definition, |A marketing plan is really a logical extension of the corporate plan. ‘The distinction between the two is that marketing is a business philosophy that sees the needs and wants of customers as the path to maximize profits; the corporate plan is the sum of the func tional areas" plans, all of whose aims, ultimately, are customer service. ‘The marketing plan will identify specific objectives of the marketing ef. [ort for a specified period of time Tt ‘will show the programs that are recom mended to accomplish each objective. ‘As a result, management can evaluate in advance the overall allocation of mar. keting resources in terms of intended accomplishments; and they can see how individual programs tie together and work toward these objectives. ‘A clearly stated plan is also the best method of maintaining a check on the efficiency and success of the marketing effort. Finally, a plan adopted by management will ensure that all groups within the bank are working together and using the same priorities, thus re dueing the need for quick adjustments in services and procedures. ‘The subject matter included in a bank's marketing plan should outline all recommended customer relations pro- grams, new advertising and promotional campalgns, customer. oriented training efforts, "goal-setting, ete ai Dallas is home to the State Fair of Texas, larg est annual exposition in the nation and host to 3 million visitors annually. See you in Dallas (ama Coe ee RTL eS increases attractiveness of ele eM Oem So ee ua CR eT ee DCS a Ray crs eee eet eras eee cis MS ace UCN Cele Lt Pie melatats Erte terre) ee hea eae TeN Clee ees eee Cen pore re res PT Rene LIBRARY BLACK HILLS STATE SPEARFISHPi Au) BUYERS AUTOMATE Tha AUTOMATIC COIN WRAPPERS AUTOMATIC COIN WRAPPERS The €. L, DOWNEY COMPANY / HaNnieat, wissouni, o=FT.0 INET Precision made on special machines from finest quality materials. “Patented Red Bordered Windows automatically indicate the total amount and denomination of contents. Diameter of cain automatically positions value of contents in red window openings. Save time for tellers, buyers, stockkeepers and depositors. Eliminate errors. For years a favorite with leading banks and financial institutions. Wrap all coins from 10 to 61.00 in following amounts: 500 in pennies $10 in quarters $2 in nickels $10. in halves 85 in dimes $20 in dollars Packed1,000toa box. Tapered edges. Available imprinted. For details on other high qualiy “Stee!-Stong” Coin Handing Products, call your dealer or send coupon, PLEASE SEND FREE DETAILS ON “STEEL-STRONG” COIN HANOUNG PRODUCTS TO: << $_—______ 9] Fim. Address City State. Ser 20.0n Reader Service Card measurement programs, et Simply_siated, marketing planning wil do the Following: (1) Allocate people end financial re sources efficiently. The targets become well defined s0 that the tools, both mechanical and human, needed to do the job can be utilized in rifleshot fashion rather than shotgun style (2) Provide a basis for agreement within the bank, Various functional areas within the bank will always have different views on the appropriate prior ities for the current year. The process of hammering out targets establishes prior ities. Once this is accomplished, indi dual preferences must be subordinated for the sake of the corporate marketing objectives. (3) Organize and discipline thinking. As the military people say, “The plan it: self may be no damn good, but the plan- ning process is indispensable.” A much clearer view of alternatives will develop as a marketing plan evolves and i- relevant considerations are put aside. (4) Enhance the opportunity for in novation. Thinking will become offer sive rather than defensive. Information and points of view will be developed in the process of planning so that unfilled needs in an individual market ean be de termined more easily and more fre quently. Further, the awareness that the bank is in possession of offensive cap- abilities will ignite aggressiveness and originality in unexpected quarters. It is important that the marketing plan bein writing just_asToan--and investment-policy statements are in writing. The disciplined thinking re quired to commit a plan to paper assures that marketing conditions will be analyzed more thoroughly, objectives more clearly established, programs more carefully thought out, and responsibil ties for the accomplishment of goals more explicilly assigned because the various people involved will be in agree ment. A_uyitten plan rovides the facility for periodic review and modifieation where necessary. In addition, individual plans that might be developed by various functional areas in the bank (such as individual branches) can be reviewed by management to assure that all groups are headed in the same direction. However, most smaller banks with one or more branches probably should write an overall marketing plan rather than a plan for each branch. In any case, written plans permit overall priorities to be set more clearly, infor mation more certainly disseminated, and the execution and timing of deci. BANKINGsions coordinated in keeping with the bank's long-term goals Additional aid in gaining a start on marketing planning ean be obtained at ‘The American Bankers Association's Na tional Marketing Conference, which is, held annually. (The 1973 Conference will be held January 14-17 at the Fair mont Roosevelt. Hotel in New Orleans, La. The theme of the 1973 conference is “Marketing in the Age of Consumer: ism.” Conference chairman will be Clarence C. Barksdale, president of the First National Bank, St, Lows, Mo.— Editor.) There are also other sources of in formation for the marketing planner. ‘The Bank Marketing Association spon- sors various schools and workshops. Several independent. management serni nar groups may also be consulted for assistance, The important part of marketing planning, in ease your bank does not have a plan, is to get started. Marketing planning can make it possible to pro- duce more profit. and more growth for less effort. In addition, and not to be overlooked if you are the marketing director, it will make you look awfully good—even if it is the easy way out. i es Wit Dallas is a center of high fashion, finance, brain power, sports, arts, conventions, good food, tall buildings, colleges, churches, theater. See you in Dallas (cml ee AUGUST 1972 A marketing-plan checklist For a commercial bank to maintain or inerease its share of the financial mar- ket it must broaden its perspective, and View Its mission as serving the total financial needs of customers and pro spective customers, Merely taking on the trappings of marketing by expenditures in. various promotional gimmicks will not, in the long min, make the commercial bank competitive. ‘The following checklist may help you appraise how far your bank has moved toward adopting the marketing concept: (1) Does your bank devote as much effort to instructing, supervising and rewarding your tellers for customer courtesy, empathy and information as for operational efficiency and accuracy? ‘Yes No (2) Within the past five years, has your bank made a major change in making platform officers more acces sible, or tellers less remote? Yes No (3) Has your bank initiated a major new service during the past three years? Yes___ No— (4) Does your bank have a full-time officer responsible for commercial or retail market development? Yes__ No— (5) Does your bank earnestly recruit, train and reward personnel for their orientation to your customers rather than an orientation to financial matters? Yes__No__ (6) Within the past three years, has your bank conducted an executive-level review of its mission, organization, per. sonnel and customer policies? Yes No A majority of “yes” answers to the above questions indicates your bank is fon the way to adopting a marketing concept—a concept that is based on satisfying consumer needs at a profit. Less than a majority marked “yes” should be taken as a warning that the very continuance of your bank as a thriving institution may be threatened. (The checklist above was developed by three men of the Marketing Admi stration Dept., University of Texas— Edward W. Cundiff, chairman and pro: fessor;,and William H. Cunningham and Henry 0. Pruden, asst. professors.) VEL CMV (ol eR tn Mars ltar=) he remembers! Kustom King goed grooming accessories act as thoughtful, tastelul reminders ot your branch bank openi sion is past! Hig 9, anniversary obs quality fully guaranteed vance o bank Service promotor attractively they'eideal gis for prospactive customers, depositors and employees, Your advertising copy or trademark impr led in 24Kt. gold leat or individually personalized Write cn company letterhead ‘or complete information about Kustom King gis Royal Traveler. Five convaniont grea ‘Bg 203 finely ished ngol orehrome, he regal-cokng casecan be us cine, bars or nsigniaat home or tavalng. ‘TheLitle Genera. Deine nal clipper and cambinaton pace! info ne ‘Genuine cout case he tached key han insures constant use pocket or urea Your hoes of Natural an. Ginge ‘Srincnignt lack WE. Bassett Co. pept +4, Derby, Conn 06418 Mahulacturers of TRIM® Manicure impiemerts, 43