Direct action: ten simple tactics to punch up your direct marketing and improve its effectiveness.

The use of direct marketing by retail banks has grown by double-digit annualized rates for the last couple of years. Yet, a substantial number of regional and community banks still rely mostly on mass media to communicate with the marketplace--including their own customers. If these banks are using direct marketing at all, it constitutes a relatively small slice of the marketing budget.

Why don't these banks use customer direct marketing to maximum advantage? Here are some possibilities.

Business silos tend to get in the way of the customer-centric mentality required to effectively manage customer relationships. If the asset and liability sides of the bank go to market separately, customer focus suffers.

For nearly a century, banks necessarily have been concerned with awareness and positioning. Product and service parity, largely a legislated circumstance, has nor fostered the competitive differentiation that is at the heart of successful direct marketing in most other businesses.

Direct marketing is often viewed as an acquisition tool, exclusively.

There are still some technology issues to overcome, particularly in a consolidating market. Two merging banks may each have workable marketing database solutions, but sometimes the two platforms can't communicate. The programming effort required to merge them is always a secondary objective behind the integration of back-office systems.

Often it's because banks tried it and it didn't work. Brand-oriented marketing personnel sometimes do not have the experience and skills to effectively use the medium. Direct marketing is a collection of specialized disciplines, different in substantive ways from brand advertising.

Because brand-conscious marketers haven't come to grips with the way brand and direct can work synergistically and symbiotically. Savvy marketers know that direct customer communication is at the heart of the brand experience.

Here are 10 quick-and easy approaches to customer direct marketing that banks--of all sizes--can implement.

1. Send a welcome kit. When new retail customers make their first visit to the bank, they rarely buy everything they're ultimately going to need. Usually, the immediate need--especially if they've recently moved to a new city--is checking. They'll buy a CD when an old one rolls over, and they'll ask for a loan only when they need the money. Knowing that, a follow up mailing that provides account information and a way to buy easily is a smart selling approach.

2. Surprise and delight. It's a sad comment on the times that customers don't really expect much by way of proactive service from most of the businesses they deal with, including their bank. That's why an unsolicited call just to say, "Thanks for the business," is a surprise and delight to most people. Look for logical opportunities to deliver "soft" messages to your better customers using direct media.

3. Sell into natural business flows. Here's a tactic that absolutely requires a departure from the silo mentality that infects some banks. All it takes is one look at a standard marketing database cross-sell report to discover that there are affinities between specific account types. Use that information to sell your customers what they want, rather than what you want them to have.

4. Localize your marketing. Until very recently, encouraging people to visit a branch was considered a bad idea, and at most banks it still is. After all, the initial cost of ATM deployment was first justified by calculating how much money the bank would save because people wouldn't need to come to the bank anymore. But some successful retail banks have returned to a pre-ATM business model in that regard, because they've learned that people who visit the branch are more loyal. There's a personal connection when a customer is talking to a teller that an ATM or website simply can't duplicate.

Maybe you don't want customers standing in line in your branches, but there is another way to establish that personal connection. Use direct mail and e-mail to introduce your customers to the "friendly folks" at the branch or give them a virtual branch experience on the Web. There are plenty of people who would really rather not visit a branch, but it's nice to know that it's there if they ever need to. People like to do business with other people, not institutions. Sometimes, localizing the communication is no more complicated than simply making the mall appear as if it originated at the customer's branch of choice.

5. Survey customers. Want your customers to have a high opinion of your service? Ask them to grade it! The fact that you ask must mean that you care; therefore, your service is good. That may sound simplistic, but it's true. Remember, too, that surveys usually get higher readership than any other communication, so you'll deliver that message to larger number of customers than you can reach in any other way except for direct one-to-one contact.

One caveat: Don't ask what they think of your service unless you're prepared to deal immediately and aggressively with complaints. An unresolved complaint is deadly to a customer relationship.

6. Build top-tier customer relationships. Every bank has a relatively small number of customers--both retail and commercial--who account for a disproportionately large share of the institution's business. In most retail banks, for example, the top 1 percent of customers usually hold 10 to 15 percent of the deposits. These are special people, and they deserve attention.

Create a "private client" group and make them a member without making them ask. Offer them a special rate bonus or discount, or offer to come to them if they need something rather "than making them come to the bank. There are dozens of ways to make people feel special and not all of them cost a lot of money. For very important customers, sometimes the best marketing strategy is to buy them lunch.

7. Differentiate yourself. It's a fact of 21st century life that people are jaded, busy and distracted. Just cutting through the clutter in their mailbox or their e-mail inbox can be a real challenge. This is a place where the creative approach matters greatly. Within the context of a financial services relationship (it's probably inappropriate to do something completely outlandish), you simply need to get noticed. An offer will only work if it's read.

Think about ways to communicate differently. In business-to-business marketing, that usually means "dimensional" mail--things that arrive in boxes or tubes. In e-mail marketing, sometimes the right approach is to use rich media, provided there's a logical fit with the message--and only if you have access to technology that can determine the user's available bandwidth. (It's simply bad manners to clog the digital mailbox of a customer with a slow connection with e-mail that takes forever to download.)

8. Sense and respond. In every customer relationship, there am events that signal a selling opportunity or a required response by the bank. An otherwise credit worthy customer who goes over-line on a credit card might be in need of a line increase or other credit products. A very high balance in a savings account might indicate the need for a CD or other investment. An IRA customer who has not made the current year contribution might appreciate a reminder. A customer who closes an account might have service issues.

Look for the "event triggers" that matter most to you in your customer database and craft a response strategy for them.

9. Drive them to the Web. Some of your customers--a percentage that grows with each passing day--prefer to interact via the Internet. Let them. Every piece of direct mail that makes an offer should provide a URL for responding. The people who want to use that response channel will self-select, and when they respond via the Web or e-mail, make that a data point to use in your communications mix. Provided you have a clear opt-in, make your next offer via e-mail rather than snail mail.

Recognize the fact that the Internet is a goal-oriented medium and that the attention span of most regular users is incredibly short. There's a truism called the "seven-second rule." If it takes longer than seven seconds to deliver on the promise of mouse click, you'll lose up to 90 percent of the audience.

Giving customers a URL to the bank's home page in the hope that they'll somehow figure out how to navigate to the product or service that you're trying to sell is not a good approach, especially since most bank sites tend to be complex. A better method is to build a "micro-site" (Web pages specifically dedicated to a single subject, the sale you're trying to make). This approach limits navigation choices to just those that take the visitor to the close.

10. Sell financial products online. The technology to conduct business over the Web securely has been in place for some time. By federal law, digital "signatures" are legal, and all sorts of Financial services are bought and sold on the Internet every day. For those customers who prefer to open accounts online, you should offer an option to do so. Ultimately, you'll lose them if you don't, and if properly executed, you should see a significant reduction in the cost of delivery as the channel reaches critical mass.

These 10 tactics almost always work. Implement them, and you are on the way to achieving better results from direct marketing.

Richard N. Tooker is a former partner with and consultant for DMW, a direct marketing agency based in Wayne, Pa. Contact DMW at Whunter@ dmwdirect.com. He works currently with KnowledgeBase Marketing.