3 tactics for deposit marketing in 2024’s (still) competitive landscape

If you’re a banking marketer, chances are that developing and implementing marketing strategies to grow and retain deposits is a top priority on your 2024 agenda.

Rising rates, rising expectations

The inflation-fighting Federal Reserve raised interest rates 5.25 percentage points from March 2022 until last July. And the Fed has since held key lending rates at their highest point since early 2001, including with its inaction at this week’s meeting. The Fed did signal its likelihood to start lowering interest rates yet this year assuming pivotal inflation measures cool as expected.

While increases in bank deposit rates typically lag Fed rate hikes, average yields on deposits for bank customers rose significantly when the Fed was hiking, most notably during the latter part of last year as competition for deposits heated up. [Read more on the outlook for deposits from BAI.]

For consumers who have money to put into their savings, this is good news, particularly following the prolonged low-rate environment when earning interest on bank deposits was nearly impossible — .01% just doesn’t add up.

Even with the Fed’s signals for lower rates, competition for core deposits is expected to remain intense for some time.

More and more customers are expecting their bank deposits to deliver healthy returns, and it’s easier than ever for customers to move funds to higher-yielding options online. As a bank marketer, your strategies need to acknowledge these consumer expectations and behaviors while at the same time managing the increase in cost of funds for your bank.

Help your bank achieve deposit retention and growth objectives

Here are some things to consider as you develop your deposit marketing plans:

Data, data, data – We can’t say it enough. Start by using the data you already have about your current deposit account customers — balances, tenure, activity, etc. — to help you identify the best target audiences for your deposit marketing programs. Analyzing your data can help you identify which customers and deposits are most at risk and find opportunities within your customer base for deposit cross-sell. You may find, for example, that there’s untapped opportunities among your checking-only or loan-only customers.

Make the data even more powerful by appending third-party demographic, psychographic and behavioral data to your database to provide a more robust view of your customers. Consider leveraging predictive modeling tools to create look-alike prospect audiences most likely to respond to your deposit marketing efforts.

Personalization is a must – Deposit marketing (or any marketing for that matter) is not a “one-size-fits-all” task. Tailor your deposit product offers, personalize your messaging, and customize the design of your deposit marketing communications based on the profiles or personas of your target audiences.

For example, you may be targeting “Working Mom Wanda,” a digitally-savvy, busy working professional, and a disciplined saver looking for better returns on her emergency funds, and “Grandpa Gary,” a conservative saver putting money aside for his grandchildren who prefers shopping and banking in person. Personalized marketing that recognizes the differences in these audiences is key to success.

Choose your channels wisely – There are so many options for where you can reach your target audiences with your deposit marketing. Gone are the days when print ads in your local or regional newspapers served as the centerpiece of your deposit marketing campaigns with targeting limited to which section of the newspaper or day of the week was most likely to reach your desired audience. Using your personas and detailed data about your target audiences, employ an omnichannel marketing strategy to reach your audiences where they are most likely to respond.

It may be a combination of digital display ads, email marketing and social media messaging that gets the attention of “Working Mom Wanda” to your offer of preferred rates on savings for customers establishing an automatic savings program. “Grandpa Gary” may be inspired to open promotional rate CDs for his grandchildren, learning about this opportunity through a combination of direct mail and email.

A new era for deposit marketing

Winning the battle for deposits in today’s highly competitive market may not be easy, but with data and analysis as your foundation, you can gain the insights you need to create and implement cost-effective deposit marketing initiatives.

With a data-driven approach, you can reach the right customers or prospects, with the right messages, at the right times, through the right channels and achieve your deposit marketing goals.

Terry Cole is the Chief Content Officer at MKP communications inc.