Tag Archives: Banking Industry

Bank Marketing is about as exciting as a local car sales campaign

What makes a good marketing campaign? This is a question that many business owners and decision makers in corporate America ask themselves for years. The results of the thinking is raining down on us on a daily basis in form of advertising in many forms, social media activities and uncounted other forms of activity to promote a product, service or a company. Marketing is considered one of the most important activities for a business. And, I think, it is true. If you are unable to make the consumer aware of whatever you have to sell, you won’t sell enough to make your campaign successful.

In the last sentence above lies one of the keys for a successful marketing campaign. Selling!! The activity of selling is at the end of the campaign, but the process of selling clearly is deciding on the success of every marketing campaign. While corporate America is investing incredible amounts of money in the top end of a marketing campaign, the investment in the executing part of the campaign is rather modest. An incredible example for such a blunder are banks. Continue reading

2nd Quarter 2011 Outlook

Please read Disclaimer!

2nd Quarter 2011 Outlook  Shortened, adjusted for Main Street to understand. No misleading and confusing numbers and rhetoric, just a plain description of important indicators that influence growth.

While the quarter started with good news regarding the job market, several other major uncertain issues will determine the outcome of the second quarter 2011. Jobs, as reported on 04/01/2011 look promising, but it has to be seen if the trend has feet and continues.
My opinion: Unemployment will further decrease

The situation in the Middle East is another unknown for the markets. Change is imminent and at the moment it is unclear how the political situation in a number of countries is developing. This, in addition to other uncertainties, will keep prices for oil and gold highand possibly put unrest on the stock market.
My opinion: This can be explosive for a while. For peace and the world economy, it will be important that fundamentalist and religious groups have no major influence in the region. Therefore, current and later US and European involvement is necessary. It will keep oil prices stable and hopefully will turn investors away from gold and into more economical investments.

For the short term, this earnings season will be of major importance, particularly the situation in the banking sector. This is important because many other sectors are depending on the bank’s “well being”. Positive reports from the banks could spike technology and over the next 2 quarters, the very important small business sector. It will also determine the bank’s appetite for mortgage lending. For the short term, the banks can take advantage of the delay of the “interchange regulation”, important for debit and credit card swiping fees. For the future, it is hopefully possible to find a solution that doesn’t pull the fee revenue completely from the banks and leaves something in the pockets of small businesses. The consumer, originally supposed to take advantage of the new regulation with price cuts, one way or the other, will pay for the change in the new legislation. Intended price cuts will not occur and loss of fees by the banks will be passed on in checking fees and other actions taken by the banks, which some of them can already be seen. Disappearing rewards programs have already been reported.
My opinion: The industry will report mildly good results and will make forecasts depend on  regulatory changes. As a result, changes will be mild and serve the purpose of business.

Ireland, Greece, Portugal and Spain remain weak and are still seen as the “undertakers” of Europe. However, in my opinion, while all of them still appear to be a bottomless pit, enough funds have been allocated in the past to save the four from going under. While calling the situation under control would be to much, calling it getting better soon, is in the picture. There is, however, another situation that can derail the European Union. Last weeks election  results in the German States of “Baden-Wuerttemberg” and “Rheinland-Pfalz” displayed concerning results for Europe. With the SPD and the Green Party winning those elections, in the short term, the German economy might get a hit and show some not so desired results. That is important since the Germans are more or less carrying Europe. At least they have over the recent past. It has to be seen if that political trend continues in Germany.
My opinion: Both issues will solve itself. For “business political reasons” the issue with the broke European countries will be used for a while, but eventually will turn into positive news. The political situation in Germany will not disturb the positive German economy in the long run.

Housing in the US is still weak and will stay weak. From my view, there are no major changes expected and therefore, this should not have any influence on the economy’s developments for the rest of the year. There might be a seasonal increase in sales, however, the situation for Main Street’s ability to buy has not changed significantly. The job market shows signs of recovering, but this has not been for a considerable time and therefore “overlapping” positive results will need more time.
My opinion: Housing will not significantly improve before the second quarter of 2012, given the job market will improve.

As reported, the job market showed signs of improvements. Household incomes, however, have not increased. This is concerning. The consumer will lose important buying power due to increasing inflation. Changed behavior in spending might also cut spending. Should the Fed interfere with rate hikes, this might even become worse. Growth, currently, can only happen without rate hikes. At this time, for this quarter, I do not believe the Fed will increase rates.
My opinion: The economy will further grow. Inflation will rise as well, but rate increases will not occur before 3rd or 4th quarter of this year.