No matter how positive recent earnings have been, reality is keeping banking execs with one foot firmly planted in the ground.  Few dare to proclaim that their troubles are completely behind them.

For many banks, an economic and market recovery appears tantalizingly close, yet always seems to stay just out of reach. Profits are returning, but not due to hearty loan growth.

Uncertainty reigns. And not just among management.

Investors are equally as gun-shy when pulling the trigger on investments in banks. A recent survey by RBC Capital Markets showed that investors are split in their outlook for the industry. Of the 145 investors and financial services executives who attended a recent RBC Financial Institutions Conference in Boston, 39 percent believe bank stocks will perform worse in 2011 than in 2010, 36 percent believe stocks will perform better and 25 percent believe it will be status quo.

For those scoring at home, that’s Uncertainty 1 – Confidence 0. Even under normal circumstances investors are a skittish bunch. Kim Caughey Forrest, senior analyst at Fort Pitt Capital Group, said it best: “We're investors, we have short memories. We need a lot of reassurance.”

Unfortunately, a lot of reassurance is not what many banks are offering.

A recent article in American Banker illustrated this very fact when describing the dilemma many banks face in terms of whether to cut their marketing budget in tough times. Slashing marketing budgets is not seen as a positive move by many analysts and investors, as it can indicate weakness. 

Guggenheim Securities analyst (and former CFO of First Horizon National Corp.) Marty Mosby commented, “People need to hear from their banks. It's part of the growth, part of what they have to focus on, their image.” If banks drastically curtail their marketing activities, he said it will “come back to haunt them.”

Maintaining an active marketing presence might not be so easy for some banks that are struggling to manage their nonperforming assets. It could come down to reducing the advertising budget or laying people off.

Even in such a situation, however, banks do not need to run silent. They can still maintain a public presence and promote their brand without full page ads and billboards. And it is important that they do, as the economy will eventually return to some semblance of normal, even if it is a new normal. Customers will once again take out loans and have need for other banking products and services. If they are happy, they will refer others to the bank.

The key for management is to keep the bank’s brand in the marketplace on a consistent basis. While it is harder to do when budgets are tight, it can – and must – be done.

Newsletters offer a cost-effective way to keep one’s brand alive, especially among business customers. It must be informative and offer value to the reader, however, or it will be a waste of resources. Include a message from the CEO, customer profiles, case studies that illustrate how clients solved a business problem by utilizing a product or service, timely or relevant trends and links that to a specific product or service feature that addresses the issue, and other relevant news about the bank and its employees. Email the newsletter as a .pdf document or as a link on your website to keep costs minimal. (See our newsletter issue on creating an effective newsletter here.)

Look to social media as a possible avenue for supporting promotion of the bank’s brand, products, services and community activities, not to mention offering an additional outlet to disseminate financial news. Bank marketing cannot live on social media alone, but social media can be a useful and somewhat inexpensive part of an overall strategic program. (See our newsletter issue on how banks can best approach social media here.)

Publicize charitable giving and community support activities. Do not assume that charitable acts in and of themselves will generate attention for your company. It is the bank’s responsibility to inform the public of what it is doing. (See our newsletter issue on the right way to publicize charitable giving here.)

Remaining silent will certainly not engender confidence on the part of shareholders and customers. If you want to stay in the game, think about your communications differently.

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