Marketers' priceless new bank role.

• Author: Bernstel, Janet Bigham
• Position: Cover Story - Brief Article

Gone are the days when marketers were financial officers who inherited the job after an introductory training class. Today, practitioners tend to be experienced marketing professionals who offer strategic guidance to the bank's upper management and its ALCO.

Peggy Hudson knows what it's like to be unpopular. She's senior vice president of marketing for American Trust Bank, Dubuque, Iowa, a position that often leaves her standing alone on the front lines of change.

"Marketing has no peer in the bank," explains Hudson, "and it gets too difficult to champion causes because people perceive them as 'Another expensive idea from marketing.'"

For example, when a regional bank was acquired by another large bank in her community, Hudson saw opportunity. Her bank was one of the few not yet offering free checking, and she knew it was just the product needed to entice customers to make the switch. But her ideas met resistance by others fearful of bringing in the wrong sort of customer, of losing fee income, of change.

"It was hard to stand up because I was the only one advocating it," explains Hudson. 'They were looking at it operationally, not from a marketing perspective. We finally did it and it worked. It was the right thing to do, but it was very unpopular."

Second-place position

Let's face it, marketing suffers from an image problem. It's held a slippery second-place position for years in the hallowed halls of banking and, as Hudson puts it, "Some days it's difficult to be a professional." Much of that poor standing has to do with the old-fashioned practice of asking numbers-oriented financial people to do something creative-like marketing.

Richard C. Dorner, now president and CEO of Ann Arbor Commerce Bank in Ann Arbor, Michigan, was one of those staffers. He's spent half of his substantial banking career in marketing, but he got thrown into his first marketing job with almost no preparation.

"We used to take bankers and send them to marketing schools, and that's the way my career started," explains Dorner. "In December the new president said 'You rake over marketing January 2.' No direction, no market planning, no strategic planning-I didn't have the foggiest idea what I was doing."

It was a move that served him well, though, as he's now the president and CEO of a bank with $290 million in assets, a 22 percent return on equity and a 1.65 percent return on assets. He learned early on that bank marketers were at a disadvantage because of having to sell products that others dreamed up. This isn't the way marketing works in most other industries. He remembers having to report to the bank president on one new product that wasn't going to work due to competitive factors.

"I said 'I'm in kind of a dilemma here. I report to you and my sense is that if this new product doesn't fly, you're going to come back to me and say that marketing failed," explains Dorner. "So I had to tell him right then that that the product wouldn't fly."

The president concurred with Dorner's findings and told the product committee to improve the product.

"So he left and everyone looked at me and said, 'OK, what do you want? Obviously, if we don't do what you want, you're going to go to the president,"' explains Dorner. "It didn't leave me in a real comfortable position and that was just one of my introductions to the upward fight."

Dorner cites frank speaking with executives as one key to his success in dealing with marketing dilemmas. His advice to todays marketing professional is to do the same. Push especially hard to be a part of strategic planning, he says, because you need a hand in product development.

"We tried to make marketing people out of bank people but that didn't work," says Dorner, who admits to making that same mistake as a new CEO. "Of course my feeling now is that you need a person knowledgeable about marketing and about banking. You really have to make them a part of the decision-making and product development."

Outside help

Dorner's view corresponds to the findings on marketers'...