It’s not surprising that vertical marketing has become increasingly widespread among leading banks. If done right, this new form of targeted marketing offers several advantages both to the bank and to clients. For the bank it expands and deepens customer relationships, improves retention, breaks down internal silos, more efficiently allocates marketing dollars, builds market differentiation and improves overall profitability. For clients, it typically delivers greater efficiency and lower costs.
Early stage vertical programs have targeted law firms, medical practices and health care companies, corporate executives and generic business owners. But the success of vertical marketing is driving banks to add new verticals that may be industry-specific, lifestyle-oriented or segment-targeted in other ways. Recent examples include LGBT individuals/non-traditional families, professional athletes and entertainers, international wealth, and non-profits.
We expect that this evolution to more refined vertical segmentation will continue. To keep pace, we recommend that banks take the initiative to identify existing core areas of business concentration that can serve as the basis for the organic development of new verticals. These areas may be sourced from commercial bankers with expertise in a specific industry or wealth managers with a focus on a well-defined affluent segment.
We believe that more fully leveraging current competencies through vertical marketing can work for both larger banks with well developed vertical marketing programs as well as for smaller regional institutions that have not yet adopted this approach. In either case the up-front cost of formalizing a vertical marketing effort may pay off in carving out and retaining share in an increasingly competitive and demanding marketplace.
For more information on how we have helped successful organizations develop and targeted marketing programs, please contact us at 203.255.1066.