They’re NOT your friends and you won’t win any more by trying to be like them
No one ever wins based on their capacity for imitation.
Big banks face enormous fixed costs for human resources, product development, capital systems and equipment, marketing and distribution. In this situation, only through multiple markets and channels can adequate sales and profit be achieved. Consequently, they must present standardized products, services, marketing strategy and distribution strategy.
Naturally, big banks turn to their heavy investments in back office systems, standardization and massive marketing budgets to hammer out share of market. DON’T FOLLOW THEIR LEAD! In another industry, think of Heineken or Budweiser: one size can’t possibly fit all around the world, but that’s what they offer.
On the other hand, community banks and credit unions have an understanding of their customers (AKA – neighbors) that big banks can never match. Their competitive advantage lies in catering to the particular demands of local businesses and consumers. AND, to leverage this advantage further, community banks and credit unions can use marketing methods that fit them, NOT their big bank rivals.
Consumers’ needs and preferences vary from town to town, even in a single state. Community banks and credit unions should compete on the basis of well-established relationships with their customers and REAL presence in their neighborhoods. They’re set up to know these differences and respond to meet the needs of their geographic markets. The differences may be due to differing economic bases and vitality, demography or history, etc. Sticking with the beer example, note the growing list of craft brewers that sell ONLY within local markets.
So, here are three pieces of Dorsey & Company advice to banks worrying about the big boys:
- Compete where your assets are at a competitive advantage.
- No one ever wins talking about their capacity to imitate.
- Your customers don’t want you to be big, and big banks can’t be you!