Even smaller banks can compete by showing customers that they 'know them'.

• Position: Marketing News

How do you compete with a larger bank? The answer is to out-market them, says Peter Harvey, CEO of Intellidyn Corp., the database marketing-services agency, which has its headquarters in Hingham, Mass.

Harvey argues that it's possible for a smaller financial institution to out-market a larger bank that has more resources. It's a myth that the larger the assets of the bank, the more sophisticated their marketing practices are. "A few select marketers at large banks may be very good. But, more often than not, these select marketers move on to bigger and better career opportunities," he says.

During their tenure, many expert marketers at large banks have a difficult time introducing new practices across the marketing initiatives already in production. Hence, the majority of marketing spending at the largest banks is still victim of:

* Single channel initiatives.

* Market research findings about customer needs never getting into the hands of agencies and campaign designers to drive value propositions.

* Differences in consumer attitudes and behaviors across segments.

* Direct channel campaigns disassociated with broad market media campaigns.

* Marketing campaigns completely de-coupled from brand awareness media.

* Simply, the lack of sophisticated targeting.

* Standard test and control splits leaving little room for new testing.

* Doing a poor job of recycling responders not ready to open accounts.

* A lack of understanding of market foot prints and the competitive dynamics across these foot prints.

* Not acting like a local bank, when you are a local bank. (It can be the biggest differentiator.)

This is where community and mid-tier banks can leverage their position of being smaller and more nimble.

But first, you must sign up for change, bringing aboard "change agents," either its employees or contractors, Harvey says.

"If you have separate managers and campaigns by channel, combine them. Multi-channel campaigns, done correctly, always out-perform single channel campaigns. Reaching out to consumers via multiple channels improves the likelihood that it will reach your target consumer. Providing those you reach with multiple options to respond boosts response rates. Why, certain consumers may be agnostic to certain channels, or simply inhibited, or simply have a personal preference. Give them their option of choice."

An unadmitted fact: the larger the bank, the more likely that consumer opinion gathered by expensive research never gets in the...