Could geolocation marketing hit the spot?

Community banks can use geofencing to tailor their marketing efforts to specific audiences. Through targeted campaigns, bankers can find new customers or deepen their relationships with existing customers.

By Katie Kuehner-Hebert

It’s a bank marketer’s dream: getting the right message to the right person at the right time, says Jana Jurukovska, ICBA’s vice president of marketing and creative director.

“Community banks have always been the leaders in relationship banking, and by using data and technology, they can deepen their relationships by creating a more high-tech, high-touch experience for their customers,” she says.

MainStreet Bank in Fairfax, Va., has launched a comprehensive digital marketing strategy that includes “geofencing,” or granular, location-based campaigns, says R. Bruce Gemmill, the $1.2 billion-asset community bank’s senior vice president and chief marketing officer. “We are actively planning to make geofencing with radii around each of our branches a key marketing strategy,” he says.

So what does location-based marketing look like to the average consumer? “That average consumer looks at their mobile phone about 150 times each day,” Gemmill says. “If I want to reach consumers within, say, a one-mile radius around one of my branches, I simply use GPS to have my ad displayed on their phones.”

MainStreet Bank aims to drive new customer conversions and increased deposits primarily through promoting its various products and services, he says. The marketing campaign will also focus on increasing value for existing customers via new offerings. Timing and messaging are key. “For example, if I target people on payday, a creative piece suggesting they put some of their pay into a high-interest-bearing CD might be the ticket,” he says.

Staying top of mind

While the object of all marketing is an eventual sale, raising brand and product awareness usually precedes the sale, such as with prospective customers who currently bank elsewhere.

For example, Gemmill could input all of the competing banks within a given radius, and whenever a consumer he is targeting enters a competitor branch, MainStreet Bank’s ad would pop up on their phone.

“To visualize this, let’s say Mr. Smith wants a home equity loan,” Gemmill says. “Mr. Smith Googles ‘home equity loans near me,’ and voilà! His interest in home equity loans is now public [in the form of an IP address], and I send him an ad to appear on his cell phone that offers a better rate than my competition, and I even include directions to my branch.”

He believes taking the time to switch banks is not necessarily a priority for most people, so the best long-term strategy is to stay visible. “There will come a time when a person requires a solution their current bank can’t provide,” he says, “and I want MainStreet Bank to be at the forefront of mind.”

MainStreet Bank uses geofencing to target individuals before, during and after local events that it sponsors, enabling the bank “to reinforce its sponsorship investment and to increase the likelihood for a better return on the investment,” Gemmill says.

As with any marketing campaign, it’s imperative to evaluate a geofencing initiative by tracking results. For example, Gemmill can track a given phone’s GPS signal and IP address and know if the phone’s owner has visited his bank’s website or one of its branches.

“It all begins with proper planning, messaging, timing, awareness and reinforcement,” he says. “One new customer can make all the difference between a successful or disappointing return on investment.”

Finding more customers like your best customer

A community bank can also “geotarget” prospective customers who have the same attributes of the bank’s most profitable current customers, whom it can identify by evaluating data within customer information files, says Jeffrey V. Bibb, a managing partner at BLF Marketing in Clarksville, Tenn.

“Key to using this important—and sensitive—data is keeping focused on one or two marketing tasks at a time,” Bibb says, adding that although there are no data sources that would indicate a clear need for bank services, good indicators for service needs can be found from annual gross sales, number of employees and addresses.

For geotargeting, banks can purchase or subscribe to an online mapping tool, such as Esri GIS mapping, in which they can feed current customer data, he says. Then, banks can peruse prospective customers by relevant information—annual sales, number of employees, location of facilities—to find ones who are similar to current profitable customers.

“The real beauty of creating profiles of key existing business customers is you can apply data profiles to prospects multiple times within your bank’s primary geographies and make profile changes when warranted,” Bibb says.

Geotargeting can be used to provide qualified prospect lists to loan officers for both commercial and consumer lending, as well as for attracting more deposits, increasing brand awareness and promoting new branches.

“These examples of prospect profiles and geotargeting may seem somewhat sophisticated,” Bibb says, “but the end result is what a community banker wants and needs: to know and understand customers and prospects better than primary competitors.”

Protecting customer comfort and privacy

Location-based marketing can help banks better understand where consumers work, where they shop, where they spend money and what they do during their downtime, according to R. Bruce Gemmill, senior vice president and chief marketing officer at MainStreet Bank in Fairfax, Va.

However, privacy is a major consideration while developing a digital marketing strategy and implementing campaigns, he says. At no time should the person targeted have “a creepy sense that they are being stalked,” Gemmill says, adding that people should see value in the messaging. “For example, if I target people visiting car dealerships, I want that person to be grateful for the information sent to them about a special rate for purchasing a new car.”

Banks should make sure data is aggregated and anonymized. “Banks should always be looking at minimizing risk and making sure customer data is safe and secure,” says Jana Jurukovska, ICBA’s vice president of marketing and creative director.

Another thing to watch out for, Jurukovska says, is whether location-based marketing ultimately narrows prospective audiences too much. Bank marketers should work with compliance officers to make sure their efforts are not excluding customers and violating fair lending laws and Community Reinvestment Act (CRA) requirements.

Katie Kuehner-Hebert is a writer in California.