I've been working in and with community banks for nearly 20 years. Over the years I have asked this question many times: "Who is your target market?" Almost 100% of the time community bankers cannot answer that question quickly and succinctly.
If I were to ask you right now "Who is your target market?" Could you answer the question concisely and without hesitation?
Would you answer ”members of our community?” That is the most common answer I receive. If your bank operates in a tiny community, or has a massive marketing budget, that's a fine answer. Frankly, few community banks operate in markets that small or have budgets that large these days. Bottom line; for most community banks that answer is not specific enough.
Two very important reasons to have a target market are:
- Focus… so you know where to find clients and prospects.
- You serve them. You know their life. You know their issues. The people you work with should know you are dedicated to them.
Many banks market by what I call the "spray and pray" method. Spray and pray means you spray your marketing message anywhere someone with a pulse (and hopefully a checkbook) will see and/or hear it, and you pray for responses.
With very few exceptions, spray and pray marketing is expensive and ineffective.
How specific do you need to be on identifying a target market? You need to be so specific that you know who they are and where you can find them.
Here is an example. A community bank that specializes in small service businesses may choose property management firms as a target market. Let's go further, let's say this community bank is located in Raleigh, NC and chooses to serve property management firms in the entire state of North Carolina.
Who is their target market? Property management firms located in the state of North Carolina.
Where will they find them? Property management associations. State licensing boards. Directories. Trade publications. And the list could go on.
What will they market to them? Electronic banking services, such as ACH origination. Remote deposit capture. Treasury management services. Real estate loans structured to meet their needs. Lockbox services.
See the value? By being this specific, we know exactly who we are marketing to and can easily figure out places to find them. Over time, the ultimate goal is to build trust and loyalty from our target markets. By building relationships with a specific target market or target markets we are able to ask our clients and prospects what products and services they need and can respond very quickly to those needs.
Is it okay to have more than one target market? Absolutely, as long as you have staff to serve them.
Consider making a corporate New Year's resolution to identify one or more target markets!