Leverage disruptors for more profitability.
Certain changes in the marketplace can present valuable opportunities for those financial institutions that are savvy enough to recognize them and act quickly. “Disruptors” are events or activities that create limited-time marketing opportunities. Those who capitalize on these opportunities use what we call “disruptor marketing.”
What are some examples of disruptors?
Disruptors can come in many forms, but some common examples include:
- Bank mergers (when a competitor is absorbed into a larger institution)
- Branch closings (which force customers to begin using an alternate, less-convenient location)
- Changes in a competitor’s product lineup or pricing strategy (such as the elimination of free checking)
Each of these events has the potential to motivate customers to look elsewhere for alternatives—rather than “staying put” and accepting the new, less-than-favorable reality, such as an inconvenient bank location, increased balance requirement, and/or higher fees.
Disruptor Marketing in Action: Branch Closure
Let’s say you know a competitor’s nearby branch is closing. You can use disruptor marketing to capture some of their customers—if you act quickly.
Because you know that branch convenience is a key part of the selection process, you can use mapping software to draw a 3-mile circle around your branch and the branch of the competitor. Where the circles overlap is the geography that is served by both banks. Customers living in this shared area should find your branch to be a convenient alternative.
Once your geographical target area has been defined, demographic selections can be made to match your desired prospect profiles to the products your bank offers. These can be as simple as age/income/home ownership, etc. If the defined geographical area is large and densely populated, models can be created to target only those customers who may be the most likely to switch banks.
Timing is everything
With disruptor marketing, there are generally three windows of opportunity:
2. at the time the change takes place; and
3. 30-60 days after the change.
Some customers will want to move quickly as soon as the announcement is made. Others may be more receptive to your approach after the change has taken place, and they’ve started to experience the inconvenience. For that reason (and based on the scope of the disruption), you may want to consider sending multiple communications—to maximize the potential of this one-time opportunity.