The Worst of Times; the Best of Times.

• Author: Hall, Robert
• Position: Bank marketing strategy - Brief Article - Column - Statistical Data Included

"I just terminated my marketing director. He knew how to do advertising and all the central stuff but he did not have a clue when it came to helping our local stores grow sales, market by market."

That is how the CEO of a large restaurant chain began our recent lunch converisation. Today's marketing director has never had more to work with: all the channels; all the information; all the systems and tools for reaching the right customers with the right value propositions; the ear of the CEO (more than ever before); and, the blessing of the board on major investments.

But follow me as I piece together a puzzle of developments and see if they paint a picture.

* Revenue is the key to shareholder while. "The equity markets value strong revenue growth considerably more than low expense growth," was the clear conclusion of a Furash study. It has never seemed more obvious that a dollar of earnings contributed by revenue growth is worth considerably more than a dollar contributed by cost reduction

* For financial institutions, deposits drive revenue. Of banking's $40 billion revenue growth over the past six years, 83 percent is represented by deposits, according to First Manhattan.

That is the conventional wisdom that drove a lot of big banks' recent spending. To maximize the revenue value of existing customers, they invested in systems to identify high-potential customers, retain them, cross-sell them--all while using an exciting variety of channels. These were heady times for marketing directors, with many of them commanding budgets of a size unimaginable a short time ago.

Now add in another piece of the puzzle, again courtesy of FMCG:

* Smaller institutions hare grown deposits at 10 times the rate of the top 30 U.S. banks over the past six years. American Banker reported that over the last two years, 11 percent of United States mom-and-pop businesses switched their primary banking relationship to a smaller institution because "most mom and shop businesses still prefer human contact, while large bank holding companies have focused their energies on reducing channel costs through expanding online capabilities." (May 11, 2001)

* Why? Noting that the top 30 banks'...