Public Relations’ Role in Banking
By Rick Keating
Banking used to be simpler. People maintained accounts and loans at one of a handful of local banks close to their home. Marketing and public relations were not necessities because competition wasn’t as fierce. Banks could count on a loyal following, based in part on the personal interaction bank employees had with their customers.
This is not the case anymore. Between ATMs and online banking, many customers no longer need human interaction for their day-to-day banking transactions. As a result, many banks have lost the opportunity to provide a personal touch. This, combined with domination in some markets by a few, large banking institutions and the ongoing need to introduce new products and services, means that banks must take greater measures to stand out to their existing and target customers, no matter the size.
To achieve this, banks are investing in marketing and public relations to promote their offerings and corporate brand. These investments, according to the American Bankers Association, are increasing every year. In 2001, banks spent $3.8 billion on marketing; in 2002, they spent 8.6 billion; and in 2003, they spent $9 billion.
Marketing is a necessity to remain competitive. The question is no longer, “Should we invest in marketing and public relations?” but rather, “How can we best spend our marketing and public relations dollars to achieve our goals and create maximum impact in the marketplace?”
THE ROLE OF PUBLIC RELATIONS IN YOUR BRAND-BUILDING
Public relations builds confidence, communicates differentiators and clearly states the key messages. Your bank’s messages should always be consistent and convincing.
There is no better vehicle to define your brand, raise your visibility and, ultimately, increase your customer base, than public relations. Public relations allows your company to deliver its carefully crafted messages to target audiences in a credible manner.
One of the key objectives of any PR campaign will likely be to differentiate the client’s brand from the competition. When it comes to banks, the average customer may find it difficult to tell the difference between all the banks on the block. According to the New Jersey Department of Banking and Insurance, there have been 60 bank mergers over the last five years. This translates to a great deal of confusion and frustration among customers, who often complain that they no longer know what their bank is.
Before undertaking a PR initiative, it is essential to determine what separates you from the competition. If you are unable to answer why a customer should choose your bank over another, then you cannot expect a customer to be able to make that differentiation either. A public relations firm can work with you to define and highlight your differentiators, if this hasn’t already been determined.
The 360 DeGRee Approach
It’s essential to incorporate a 360 degree strategy when embarking on a PR initiative. This means not relying on one or two tactics to achieve your PR goals; rather, implementing a wide variety of tactics to cast as wide a net as possible. While media relations is often the most common vehicle to deliver messages to your target audiences, other tactics, such as byline articles, op-eds and speaking engagements, are necessary to complement media placements.
Also, do not forget internal communications. Internal communications is often relegated to an afterthought, but it is a crucial component of your outreach. Your employees are often your best salespeople.
Working with a PR Firm
One of the most often-heard comments about public relations is, “How do I measure the short- and long-term success?” My firm measures success by three criteria: knowledge, counsel and results.
Knowledge – Understanding the client, the industry, the competition, the client’s business objectives, differentiators and challenges is the basis for establishing a thoughtful and comprehensive PR campaign. True client knowledge builds an intelligence foundation and sets the tone for strategy and implementation throughout the engagement.
When evaluating your PR firm’s knowledge, consider the following:
1. Do they know: Your business and communications objectives? Your key messages? The competitive landscape? The market?
2. Have they analyzed your current communications program regarding strengths, weaknesses and opportunities?
3. Have they interviewed or held briefings with senior management and key intelligence sources, such as, salespeople, advisors, investors, board members, etc.?
4. Have they established a scope of work?
5. Does the firm invest in knowledge databases, such as LexisNexis, to help them monitor the competition?
6. Are they positioning you and your bank in the most appropriate outlets?
7. Do they know the media? This is proven through the intelligence and opportunities initiated, as well as the results shown for other clients.
Counsel – Counsel can come in the form of good or bad advice – many times costing the client the same in fees. The firm should clearly guide you on realistic media expectations, as well as what to expect on the road to penetrating the media. Following are items to consider when measuring your firm’s counseling:
1. Do you have a good feeling about the project leader and key firm staff engaged on the assignment?
2. Is the advice given based on knowledge and supported by facts?
3. Is the firm “counseling” or “processing”? Your answer will tell you if you have hired an order-taker or advisor. Do you get sophisticated input or do they “just do it”?
4. Are they positioning the pitch with relevance, or making your news relevant in a broader context, asking: “Why this story, why now?”
5. Is the firm providing proactive media opportunities with counsel as to what the opportunity is, what possibility might come from it, and make suggestions on what you should say? When appropriate, does the firm provide additional intelligence to provoke you and add substance to your interview?
Results – Results without focus on objectives can be time consuming, brand diluting and ineffective. A key result of a well-orchestrated PR program is one that has a positive impact on brand and corporate reputation and, ultimately, sales.
A debated tool for measurement is one that is counter to achieving the client’s goals: analyzing what a media buy would cost to purchase the same size space as the PR placement. Traditionally, firms calculate the media cost, add an editorial value multiple of between 5 times and 10 times, and determine a “value.”
This type of measurement is insufficient because it encourages firms to spend more time at driving coverage in all media – relevant and non-relevant – to get a high multiple rather than focusing its energy on penetrating the key influencing media to accomplish the program objectives. For instance, The Wall Street Journal may not be the best outlet for achieving certain predetermined objectives. Rather, it is essential to reach the media that your consumers are reading. Often, consistent hits in targeted outlets are more valuable than a one-time-only hit in a broad top-tier outlet.
How to Measure Results
Following are some questions to help you ascertain the success of your public relations program:
1. Is your brand better positioned in your industry, including greater analyst, investor, media and public awareness?
2. Are you receiving placement in appropriate publications?
3. Do you have key messages and tactics that continuously support the key messages?
4. Are the outreach materials and press releases well written and supportive of the brand and its positioning?
5. Keeping in mind that you may not yet have news that warrants coverage in The Wall Street Journal, are you receiving coverage in high-impact media?
6. Have strategic media relationships been cultivated on your behalf so that when newsworthy activity arises, you are well positioned with key targets?
7. Are sales figures on the rise? Are you achieving other key business objectives?
8. Have you changed attitudes or perceptions about your business? This can be measured informally, through internal perception, or more formally through focus groups.
Standards for success must be established upfront to ensure a successful relationship with your PR firm. Too often, firms and clients are not clear on what their expected outcomes and deliverables are, setting the way for a program that will not meet its full potential.
Public relations is an essential tool within your overall marketing program to increase visibility, maintain awareness and drive relevance of the brand to target and existing customers. Every day is an opportunity to reach out to your customers and reinforce the brand – are you prepared to meet the opportunity?
Rick Keating is president and chief executive officer of Keating & Co., a strategic communications firm. As its second-generation leader, he has been with the firm his entire professional career. Keating also serves as chief executive officer of KeatingCicatiello, a public affairs firm he launched in 2004 with Tony Cicatiello. He can be reached via email at firstname.lastname@example.org.