Financial-Services Sector Snapping Up Savvy CMOs
NEW YORK (AdAge.com) -- Career-minded CMOs, take note: You just may land your next gig in financial services.
As financial-services companies emerge from the worst crisis in decades, a number of firms -- from smaller banks to asset or wealth managers, private equity and insurance companies -- are creating chief marketing officer positions to develop more sophisticated strategies and get a jump on their competition.
"There is a tremendous amount of opportunity for strategic marketers to come in and really have an impact on helping the organization deepen its understanding of its customers -- and how to best reach new customers -- to help drive revenue enhancement," said Marie Ford, a consultant in the Philadelphia office of executive-search firm Spencer Stuart.
And marketing spending in the sector is rebounding from a rough 2009. At the largest 100 commercial banks in the first quarter spending rose more than 11%, to $2.22 billion, from a year ago, according to SNL Financial, a Charlottesville, Va., firm that collects data on financial institutions.
Some firms are creating CMO positions for the first time as many recognize that marketing needs to play a greater role in the company's growth strategies. As such, the new CMOs are charged with developing products and campaigns to better compete with the deeper pockets of larger institutions, or create more awareness about their brand -- or just to get in front of others defining what their brand is all about.
"We've seen the decimation of brands and reputations, and if not managed properly, financial firms may find that their defacto CMO is the media," said Carlos Cata, managing partner at Heidrick & Struggles, an executive-search firm in Chicago. "As everybody is emerging out of the darkness, it's time to play offense instead of defense."
Some of the new offensive players include Connie Weaver -- previously at Hartford Financial Services Group -- who recently joined TIAA-CREF, which manages pension funds for nonprofits, to head marketing and communications; Christopher Jones, who left candy company Mars in 2008 to assume the newly created CMO position at insurer Aviva USA; and Andrew Rosen, tapped in March as CMO of Bank of the West. While Mr. Rosen's position is not new, it had been vacant since last summer when Sarah Thornton left the bank.
In general, Mr. Cata said that financial services companies are looking for CMOs with expertise in reputation management, corporate communications, customer relationship management, digital marketing, and research and analytics for targeting and customer segmentation.
But it's not just consumers that financial marketers are trying to reach. Richard Lipstein, a managing director and partner of Boyden Global Executive Search in New York, said that boutique investment-banking firms such as Jefferies and Moelis & Co. and private-equity firms have been hiring more executives to expand their marketing efforts as the competition for fewer deals has intensified. As a part of their new strategy, some are now announcing every deal they close.
"With the deal environment trying to recover, firms are feverishly fighting for pieces of it," Mr. Lipstein said. "So they are now developing credibility by spreading awareness about themselves."
TIAA-CREF's Ms. Weaver said her goal is to take the New York asset-management firm's marketing strategy "to the next level," she said, as it develops a broader array of products, delivery methods and service features for both its nonprofit clients and the end users, their employees.
"People are now acutely aware of the importance of being prudent in their financial planning," Ms. Weaver said. "This is the right time to show customers why we are the right firm to meet those needs."
Aviva USA's Mr. Jones said the Des Moines, Iowa-based life insurance and annuity provider created a CMO position to create awareness about the company in the U.S. In 2006, its parent, British-based Aviva PLC, bought AmerUs Group and renamed the unit Aviva USA. While Aviva is the fifth-largest insurer in the world, its brand is not well known in this country, but under his helm, the unit is trying to change that.
Last year, Aviva USA launched "YOU Movement," that Mr. Jones said goes beyond a branding initiative to the "foundation for a cultural shift." He said it's "about fulfilling the unmet need of customers to be recognized as individuals. We want to be the leader in our industry for providing both expertise and empathy to our customers. Toward that vision, we are changing the way that insurance companies talk to customers and placing our customers at the center of everything that we do."
While Aviva has yet to launch a full-blown ad campaign for the initiative, it has developed a new website and mailed inserts to its insurance brokers and existing clients. The firm plans on launching a more thorough direct-mail campaign to existing customers this summer. It's already launched an internal rebranding campaign to get its American employees on board. Aviva, working with ad agency BBDO West in Minneapolis, placed billboard ads in the three markets where its employees are based: Des Moines, Topeka, Ks., and Woodbury, N.Y. -- with teaser statements, "You. It's our three-letter mission statement. Aviva." The billboards were aimed at employees to generate excitement as they drove to work, but Mr. Jones said it also likely piqued the interest of would-be customers.
One company looking for more awareness among the giants is Bank of the West. While a well-known name in California and its other western markets, its brand -- like many other regional and community banks there -- has been overshadowed in the past year by JPMorgan Chase & Co. and Wells Fargo & Co. Both financial giants made sizable acquisitions in 2008 -- JPMorgan bought the failed Washington Mutual Bank and Wells bought Wachovia Corp. -- and both have been making sure the region knows of their new heft.
"These companies have expanded dramatically and are putting tens of millions of dollars into advertising," said Mr. Rosen. "We can't compete with that level of spending, so we have to find other ways to make sure our story is heard." The $60 billion-asset San Francisco bank is launching a multimedia ad campaign June 7 thanking customers for voting the bank as the highest in customer satisfaction among retail banks in California for the third straight year in a survey by J.D. Power and Associates -- and spending twice the amount it spent last year to promote the award.
In addition to playing defense to combat the aggressive advertising by the bigger firms, Mr. Rosen said that Bank of the West is expanding its marketing efforts now because it again can focus on growth (the bank turned a profit in the first quarter for the first time in 15 months).
The bank wants to maintain the momentum it created last year in attracting new customers, and it is also marketing an expanded set of products and services to existing customers, Mr. Rosen said. It is currently developing campaigns for its markets outside California, working with San Francisco-based agency Hoffman Lewis. While Mr. Rosen would not say how much money Bank of the West has budgeted for marketing this year, he said that it was flat over 2009.
The $144 billion-asset Citizens Financial Group in Providence, R.I., meanwhile, in May launched a marketing and branding campaign called "Good Banking is Good Citizenship." The company is emphasizing a number of initiatives that it believes exemplify good citizenship, including hiring more business bankers and mortgage lenders, instituting a homebuyers' assistance program, and encouraging employees to volunteer.
We are relaunching the franchise and getting everyone focused on the opportunity we have to grow market share," While the ad campaign will run through the summer, Citizens' CMO Theresa McLaughlin said the endeavor goes beyond marketing. "It's galvanizing the company around a common vision. It's been tough in the banking industry for a couple of years, and this gives everyone a focal point around back-to-basics banking."
Citizens' campaign was developed by Ogilvy & Mather, and will include print, online and billboard ads and TV commercials. Ogilvy's creative director Chris Wall said that regional and community banks are in a good position to advertise what they can do for their communities, as the biggest banks have lost the most trust during the financial crisis.
But for those whose business is not as good, there's still a career opportunity -- though not as CMO. Heather Hammond, a consultant at Russell Reynolds Associates, an executive-search firm based in New York, is seeing a number of searches for crisis-management experts. "Some large financial institutions are not necessarily out of the woods just yet," Hammond said. "While business conditions have improved, professionals who can tackle crisis-management issues continue to be in high demand."
Even with the ramp up, most firms won't be spending a lot more money as they continue to be faced with constraints on capital, said James Bell, senior partner at New York brand strategy firm Lippincott. "Marketing budgets will continue to be very tight, and efficiency is being emphasized more than ever," he noted. "Less mass market advertising and more focus on certain niche groups or using cheaper, more efficient outlets, such as online blogs and social media -- things that are not only cheap, but also allow them to speak directly and make personal connections."
That's why a number of firms are now hiring marketers with expertise in social media, and companies such as American Express and Visa are "leading the way" in social networking, said Steve Treppo, a principal in the New York Booz & Co. consultancy.