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Scenario 1:

Your CFO pokes their head into your office and says you need to conduct a campaign to raise $15 million in deposits to fund new loans. Also, you have four months and nowhere near a large enough budget. Good luck!

Scenario 2:

You overhear a conversation between two members of your management team. They refer to marketing as a cost center. One of them says marketing should stick to “writing newsletters and posting photos on Facebook.”

Sound familiar? If so, it is because you work at a bank or credit union that does not understand or value the potential of marketing. Many executive teams view marketing as an expense. In reality, marketing can and should be one of the lead profit generators at your institution.

Unfortunately, being profitable these days focuses on cutting instead of optimizing. Your executive team may decide to staff branches as little as possible. When that’s not enough, they come for the indirect costs that often includes your marketing budget.


Marketing can transform into a profit center. You can gain a seat at the table for strategy and planning. Marketing can drive profitability and put the bank on a better trajectory for success.

But how?

The short answer: generate profit. That starts with knowing your most profitable products, customers and internal departments.

Why profitability? Because money talks.

By focusing on the products, customers and branches that generate the most profit, you are focusing your limited time and budget on initiatives that can have the largest positive impact.

There are three main areas of profitability to look at:

1. Product Profitability- the revenue they generate versus the resources needed to service them.

2. Organizational Profitability- measure the profitability of a branch or specific department.

3. Customer Profitability- how profitable are your customer relationships? This allows you to create target segments for marketing efforts.

Your finance department can help you get the data you need for the first two. You will need to use your CRM, MCIF or core to help you with customer profitability.

Seek Guidance from Your Strategic Plan

Once you have this data, you can see what products, customers and business units are making or losing you money. This puts you in the driver’s seat for making smart decisions. However, you cannot start planning out campaigns on a whim. You must consult your institution’s strategic plan for guidance.

Your strategic plan should include these two key elements:

1. The vision. It should answer the question “Who do we as a financial institution want to be five years from now?” It is a look at who you are versus who you want to be.

2. Strategic objectives. These are things that will move you closer to the future state your vision outlines.

You need to know these two core elements in order to help make the vision come true. If your leadership has determined there is an opportunity in commercial lending, it doesn’t make sense to run campaigns that do not help achieve this goal. Knowing profitability helps you keep a clear view of what can make the biggest financial impact.

Following the commercial lending example, let’s say one of your strategic objectives is to hire a head of commercial lending and three lenders.

They will need a salary, benefits, a furnished office and so on. They will also need funds to loan out. Work with your CFO and finance department to find a total number. Once you have this number, you can use profitability to develop one or multiple campaigns to fund the new department.

use your website as a profit center!

The Power to Say “No”

There’s also a bonus benefit of aligning profitability with your vision and strategic objectives: telling people “no”. We all have those people who corner you in the break room or pop into your office with their latest great campaign idea. But now you can filter these “winning ideas” through your profitability metrics and desired strategic outcomes.

Them: “We need to fund some loans, let’s do a campaign for our free checking accounts!”

You: “I appreciate the enthusiasm. More free checking accounts would actually cost us money because we lose an average of $22 on each account per year. We’d be much better off with a rate promotion on something more profitable like long-term CDs.”


Them: “We need to grow our consumer loan portfolio, let’s do a campaign!”

You: “I get it, loans make us money. But our strategic plan has put us on a path to become the premier commercial lender in our communities in three years. This deserves more of our marketing resources.”

So to review:

  • Start by working with your CFO and finance department to get a profitability report for all your products and services at the very least; customer profitability and branch and/or department profitability is a bonus.
  • Identify the products and services with the most potential on your spreadsheet.
  • Consult your institution’s strategic plan to align marketing with your organization's path.
  • For your products and services with the most profit potential, schedule a meeting with the department head or product manager to learn more about the product/service and how to make the most of the opportunity.

Now you’re ready to start your marketing planning process, covered in the next post in our Marketing Campaign series.

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1 comment

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  • Akande Oluremi Olatunji | Aug 1st 2018 @ 8:16 PM

    Very apt and educative

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