Creating a marketing plan and research

indexWhat is a marketing plan and Creating a marketing plan, market researchGetting started creating a marketing plan
In 1987, the Memphis-based regional holding firm, National Commerce Ban-corporation, increased its account base by 50% in less than 24 months by focusing on middle America’s preference for convenience.

In the same year, the Canadian trust company, Royal Trustco Limited, netted over $230 million in 60 days with just one poster and a product concept catering to the advice needs of Canada’s most conservative savers.
How did these two firms know the right moves to make to tap into these obviously lucrative markets, and how can you fine tune your marketing efforts to do the same? How do you learn who your best customers are and what they want from you? And, once you know, how do you reach them with your message?

The answers to questions such as these form the backbone of your marketing strategy, serving as guideposts on which to pin specific   tactical   choices   such   as   product   lines,   location   of branches, or selection of promotional media.

Since it is no longer possible to provide quality service to a wide spectrum of consumers, deciding which specific groups you would like to focus on must be your first consideration. The Who of your strategy, as discussed in chapter 1, is the cornerstone of your marketing plan.

Once you’ve decided which customer group or groups you would like to pursue, you need to turn your attention to the What, the Where and the How; that is, what products or services you will provide, where you will deliver these, and how will you communicate the benefits of your products or services to your targeted customers. These next steps are outlined in chapters 2, 3 and 4 respectively. Idea generation is at the heart of sound financial marketing. The final chapter in this section provides examples of how you can formalize this all-important function.

Remember, good financial marketing begins, and ends, with the customer. And, so it is with the selection of the What, Where, and How in your strategy. You need to tie your choice of product, location, and promotion back to the needs expressed by your target audiences. For example, when it comes to product preference, not everyone has the same expectations from a financial company. You need to determine which different strokes apply to which different folks. This same truism holds for your decision on where to deliver your services and how to promote them.

All of this presumes that you know a great deal about your prospective clients. But how do you get this information? Quite simply, you put these questions directly to your target clientele through market research. If you’re unsure who those people might be, you’ll find valuable clues among your current client base and your employees.

The most profitable among your customers are a good starting point; you want to keep these people and attract more like them. But don’t stop at screening out today’s best customers; focus also on who will be profitable tomorrow. Your employees, particularly your sales and customer contact people, can offer sound suggestions in this category.

Because  much  of the  success  of any  marketing endeavor depends on the quality of your research intelligence, let’s take a quick look at the key factors inherent in effective financial consumer research.

1. Look to your current customers first.
As a first step in your market research plan, consider taking a closer look at your current customer base, isolating your most profitable clients. After all, these people do business with you because you are giving them what they want, at least for now. But don’t get too complacent; they may stay with you simply because no other financial company has made it worth their while to pick up stakes — yet.

2. Use customer and employee group interviews.
An excellent way to gain valuable insight into customer opinions and concerns is through small group interviews, called focus groups. Individuals representative of the type of customer you’d like to attract are invited to these group sessions to speak freely and at length about their financial experiences and their views on your firm and its products. You get your best results from these sessions if you hire an outside researcher to do the actual interviews.

“You have to watch that you don’t become cynical about focus
groups — it can be agony night after night listening to ordinary
people complain about your business.”

You can also do focus interviews with your own customer service people, branch managers, and sales staff. James Shanahan, now sector vice president of Marketing for MasterCard International, notes how employee input can add significantly to the design of any new financial product or service.

When his former employer, a large full-service U.S. bank, introduced a financial planning service, the company decided to keep the questionnaire simple. Too simple, as it turned out. Through debriefing sessions, employees passed on customers’ comments: money is serious business and the questionnaire should reflect that tone.

Bank of Boston division executive, Linda Kanner, offers a few suggestions on ‘thought starter’ questions for your employee interviews. “Why don’t we have all the business in this town? What do you think it would take to get the business? What does the bank across the street have that we don’t have?”

3. Don’t get too attached to your own opinion.
Avoid the temptation to rely solely on your own instincts or on what passes for gospel among your colleagues. Kiddies catering, for example, went against the conventional wisdom that children cannot be profitable. Yet, in 15 months, the junior account balance at Vancouver City Savings Credit Union doubled to $8.5 million. Not bad for bucking the system!

4. Apply multiple research techniques and don’t reinvent the wheel.
There are many approaches to market research. You can tap into the research other people have done, called secondary research, or you can create your own. The latter, or primary research, can take two forms: qualitative or quantitative. Qualitative research such as employee or customer group interviews is used as a first shot at understanding your market; however, quantitative research as in mail or telephone surveys gives you a statistical dimension to the issues raised in qualitative research.

Take advantage of all available research avenues. However, first define your research objectives —just what are you trying to learn and why? And don’t reinvent the wheel. Scour your local libraries, governments, and financial associations for what others have done before.

5. Observe actual customer behavior.
Get a feel for actual customer behavior by taking up an observation post in office lobbies of your own company and in those of your competitors. On a six-month tour of Bank of Boston Corporation branches, Kanner discovered that it was often the customer who took the sales initiative and asked for help. “It was clear that our people were selling nothing,” she recalls. “They were servicing incoming requests. Customers showed up at the door and asked for A, B and C.”

6. Research the competition.
In concentrating your efforts on key customers, don’t lose sight of your competitors. Everything consumers perceive about your firm is tied to their perceptions about who they see as your rivals. You can’t simply stand up and shout, we’re here, and wait patiently for an investor stampede to materialize at your door! Keep in mind that other financial institutions are also vying for the affections of your chosen market, so your offerings have to be better.

When the Boston firm of John Hancock Mutual Life Insurance Company set out to impress a middle-income target audience, its first move was to check out the competition. Although customers were pleading for a way out of the financial product maze, Hancock’s rivals seemed too preoccupied with building up their already expansive product lines to notice. Enter the Hancock “Real life, real answers” advertising campaign.

7.  Back up your qualitative research with hard numbers.
Don’t limit your research to qualitative techniques such as focus interviews. Follow through with surveys — by telephone, mail or in person — to quantify the results learned through other market research methods.

Cathleen Stewart, executive vice president and director of Marketing for Shearson Lehman Hutton Inc., a $4.2-billion U.S. investment firm, suggests, “Use qualitative market research to give direction; quantitative research to provide forecasts.” The New York-based Shearson relied heavily on both kinds of research in developing its successful “Minds Over Money” ad campaign.

Building questionnaires for these consumer surveys is not as tough a job as it may seem initially. First, determine precisely what information you require to make a specific marketing decision, and then write questions that will provide this data.

For example, you may want to know in what way you should promote your new product, that is, whether you should select mass media advertising such as radio or newspaper, or stick to seminars through your sales representatives. Your consumer research questionnaire should then pose a question such as, What sources of information do you use to come to a decision about selecting a new financial product?, and offer your respondents several choices, including contact with friends or associates, newspaper ads, seminars, or television commercials.

8.  Act on your research results.
No research project is complete until a series of specific implementation steps has been recommended and acted upon. Although that sounds like common sense, too often research reports are mothballed because no one is quite sure how to put them into effect or because the results are contrary to what we’d like to believe. Egos and preconceptions have no place in good financial market research.

9. Let everyone in on what you’ve learned.
Watch out for the ‘information is power monster’ — hoarding market research results serves no useful purpose. Consider providing copies of the report to anyone in your organization who can benefit from knowing what’s been learned. Two years ago, when an Arizona thrift, MeraBank, took on a whole new look and name, employees took to the new concept like ducks to water. This was by no means a matter of luck. Constant employee communication on the consumer research that had prompted the new strategy had effectively warmed the troops to the new image.

 10. Don’t balk at the cost of market research.
One of the most common reasons given for not doing in-depth market research is the cost.The financial companies in this book would readily argue that it’s money well spent. The Royal Bank of Canada feels, for example, that it cannot afford to spring untested financial products or services on its public. And the $100-billion firm is willing to back up this belief with cold hard cash, to the tune of nearly $3 million each year on consumer research.

However, if you are simply not in that league, you can keep your costs down by sticking to research on only what is valuable and actionable, resisting the urge to delve into what may be just interesting. Bank of Boston has another cost-cutting idea — use your own employees to man survey telephones. Over 1,000 of the bank’s people were only too happy to earn a few extra dollars moonlighting as evening researchers.

Also, consider tapping into the resources available through local university and college business programs. Many commerce or MBA curricula can accommodate projects submitted by local companies.

11. Don’t delegate your final marketing decision to research.    
Don’t expect any financial market research to do your work for you. The buck stops with you and your colleagues who must make the final decision on the pieces of your firm’s marketing strategy. A comment by Russell Cobler. executive vice president and marketing manager of San Antonio Savings Association, a Texas savings and loan company, sums up this support function of research, “Market research doesn’t make the decision; it is only there to help you make the decision.”

From your market research a blueprint for your marketing strategy will be developed. With a marketing strategy in place, the tactical marketing decisions will be much easier to make, and your “marketing vision” will begin to take form. In the words of Wayne Walker, senior vice president of Marketing for The Investors Group, “Marketing vision is the screen that a manager should use for every decision.”

Every great journey begins with a first step. Ours is to look at how we can track down those groups of consumers who will make our marketing efforts profitable.

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