Most U.S. economists expect a recession to begin sometime in 2023, though recent reports suggest it may start later in the year than previously expected because the economy has remained resilient despite steadily higher interest rates. A survey of 48 professional forecasters conducted by the National Association for Business Economics found that about 60% believe the economy is likely to slide into a recession by the end of the year.
This likelihood weighs heavily on the minds of consumers as well as bank and credit union marketers. Bracing for a potential recession, financial marketers may be tempted to cut back on their efforts to preserve company budgets. Instead, consider shifting your focus to educating, reassuring, and strengthening connections with consumers and reallocating your budget toward these specific marketing efforts.
UNDERSTAND WHAT CONSUMERS WANT AND NEED DURING A RECESSION
When crafting consumer-focused messaging in the face of a recession, you want to build trust and personal connections. Keep your tone honest, straightforward, and conversational, considering how each one of your customers may be personally affected by the financial situation – and what your institution can do to help.
Your customers will likely be trying to spend less as inflation and rising interest rates diminish what they earn. They may be worried about potential layoffs and anxious about maintaining their standard of living in the face of rising costs. Some may make risky financial moves like taking out loans at high interest rates or neglecting their savings, which could cost them in the long term. They need expert advice and guidance on how to navigate the economic downturn and come out on the other side. There is a clear opportunity to be a leader in these efforts.
According to the J.D. Power 2022 U.S. Retail Banking Satisfaction Study, 63% of customers say they won’t switch banks, and 78% will reuse their current financial institutions if they deliver support to them during challenging economic times. Despite the clear link between support and loyalty, only 44% of respondents said their financial institution was delivering on that need.
Creating simple and direct ways for consumers to consult with your staff and financial advisors will help you deliver the support customers need and strengthen relationships with both new and existing customers. Offering effective banking experience tools is critical in increasing that access and engagement.
Consider adding or upgrading the following tools and features to give consumers more ways to interact with your experts:
- A nationwide ATM network to help customers access money fee-free
- Chat capabilities
- Online account management tools
- Mobile app notifications and calls-to-action
- Queue management solutions (in-person and virtual)
- Real-time appointment booking
- Video banking
Acting as a resource for your customers by delivering personalized experiences and enhancing your communication and response capabilities with technology will help you build new or deeper connections with customers, even in the face of economic uncertainty.
Also, consider how the downturn might affect specific groups of consumers based on their stage of life. Anticipating these effects can help you proactively address issues these consumers may face before they turn into bigger problems – building trust with your financial institution and, likely, long-term loyalty. Marketing efforts in these areas could include:
- Creating video content on platforms like TikTok or Instagram Reels that compares product offerings to help Gen Z consumers make confident financial decisions and shows how products are relatable or applicable to their lives
- Providing realistic homebuying advice to millennial consumers, including mortgage approval prospects and insights on what the current rate environment will mean for them
- Crafting content and messaging for Gen X and baby boomer consumers focused on how to best protect retirement savings
It is also important to think about your customer segments according to how they might respond to a recession in ways not defined by traditional demographics like age or income level. Speaking to your customers with empathy and understanding will help build trust and rapport. Regularly reassess your marketing strategy to ensure your messaging, products, and services meet your audiences’ needs, priorities, and interests as they shift – or don’t – with economic instability.
CHOOSE MARKETING CHANNELS WISELY
Recession-proofing your marketing efforts – and your financial institution’s customer relationships – means focusing on marketing opportunities that don’t overextend your budget. Be selective with paid or sponsored marketing engagements and focus on communicating and enhancing relationships through social media, blogs, and other content focused on financial wellness that responds directly to your customers’ needs, anxieties, and pain points.
Keep an Eye on KPIs
Examining which of your channels regularly hit desired Key Performance Indicators (KPIs) can help you better determine which marketing efforts you can increase, enhance, or eliminate. With limited resources, you want to ensure you’re investing in marketing activities most likely to support your desired outcomes. Keep in mind that measurable KPIs may be different in this rate environment than they were during the low-rate environment of a couple of years ago. Returns may not be as free flowing as when people had disposable income and low rates at their disposal.
Speak to Your Audience
Personalized marketing is another way to ensure your marketing budget is being directed to campaigns and communications that reach your audiences and respond to their needs. In tight financial times, your focus should be on showing consumers that your guidance, products, and services are the best solutions for their needs – and hold the most value in the current market.
Invest in Local SEO
For many banks and credit unions, investing in local search engine optimization (SEO) is a smart move, as it’s a low-cost way to see what products, services, and advice people in your service area are searching for through Google – and then engage with those local consumers looking for what you can offer. To improve your presence in local search results, you can:
- Set up your Google Business Profile with your financial institution’s name, address, and phone number to ensure you appear to consumers in your area
- Upload photos and videos to your listing to illustrate the value your services and products can deliver to these audiences
- Request customer reviews, as the number of reviews affects how Google will rank you in local search results, AND it will show potential customers that current ones trust you
Recognize the Value of Video
Video testimonials by current customers, demonstrations of products or services, and snippets of financial insights or answers to common questions provided by your experts are great ways to show your value to current and prospective customers. Share videos on your website and social media accounts and in email campaigns to show how you can add value to customers’ lives, especially in uncertain times. No budget for a full video shoot? Get creative with filming through Zoom/Teams or having the customer self-film on a smartphone. Raw video content can be more powerful than polished content on social media.
Reach Customers With Remarketing Ads
Engage with people who have already visited your website or social media accounts through remarketing ads on Facebook and Google. Since these ads only appear to people who have sought you out in the past, the consumers who view them are more likely to remember your brand, increasing the chances that they will engage with you again. Again, remember to target these ads to your audiences’ needs and pain points and provide helpful content like informational blog posts and comparison guides to build trust.
Want to recession-proof your institution’s marketing strategy? LIGHTSTREAM can help you choose the right channels and dial in your messaging for maximum cost efficiency. And to make your marketing dollars go even further, ask us about Strategy Academy. You can get access to hundreds of timely and informative financial wellness articles, videos, infographics, assessments, and more – all customizable to your institution.