This is a reprint of a 1996 article featured in the Atlanta Business Chronicle on how one brand seized a targeted marketing opportunity. I felt that it was important reprint in order to express to marketers what is possible. It’s a brilliant example of how they acted on the opportunity, tracked the results and used every marketing platform from PR to event marketing to execute the plan. And this dates back to 1996. Just imagine the increased significance of the opportunity today.
NationsBank Corp. is pushing into Atlanta with an unusual strategy: The bank has singled out wealthy black professionals as its next round of target customers.
Many banks have pursued niches — such as professional athletes — in private banking. “But I just don’t know of anyone else targeting African-Americans that way,” said a spokesperson with the American Bankers Association in Washington.
NationsBank honed in on the group’s lucrative demographics about a year ago and started looking for ways to hook its members, said Shedrick L. Barber, the national coordinator for a unit the bank calls Professional African-American Market Development.
The market is huge. “We found that this group has an annual purchasing power of $427 billion, and it’s growing,” Barber said. There are more than 1 million black households in which one member makes at least $50,000 a year, and what matters even more to NationsBank, 75 percent of those are in the Southeast, according to its research.
“We found a new customer in our back yard,” he said.
His unit was designed to lure customers to NationsBank through what is increasingly known as “relationship banking.” Barber gathers a team of bankers in each market to work with prospective customers on their specific needs, pulling expertise from different parts of the company’s operations.
But the bank’s strategy has been to work from the top down, rather than starting one-on-one. Barber has gone after deals with larger groups to spread his message more quickly. In fact, one of the unit’s first loans brought the headquarters of Omega Psi Phi, a national black fraternity, to DeKalb County from Washington, D.C.
First Southern Bank, a minority-owned community bank based in Lithonia, actually heard about the deal first. But the $2.5 million loan needed by Omega Psi Phi exceeded the $46 million-asset bank’s legal lending limit, said First Southern CEO James E. Young. So the two banks wound up working together, closing the deal with the fraternity last December.
Since then, NationsBank has concentrated its efforts elsewhere, although it has found Atlanta customers at professional conventions in other cities, Barber said. “Most people assume we’ve been marketing heavily in Atlanta, but we bypassed it during the Olympics. Now, we’re coming back. If not in the fourth quarter, in the first quarter [1997].”
The unit could provide formidable competition. It has booked $148 million in 37 deals through September, and Barber said he has almost $500 million in business in his pipeline, including mortgage loans, franchise financing, securities and other products.
He has found much of that business by marketing the unit at national meetings of black professional associations — often held in Atlanta. In April, NationsBank was the title sponsor of the first Black Enterprise Magazine Entrepreneurs Conference, attended by more than 500 black business owners. The day Barber sent a team of executives into the crowd, he received 84 voice mail messages, he said.
And Barber has reached marketing agreements with several other groups, including the Black Automobile Dealers Association.
The bank has also worked out deals with groups to exchange services for access to potential customers. Its alliance with Meharry Medical College could lure business from alumni of the Nashville, Tenn., medical school — a top producer of black doctors. NationsBank’s private banking unit has offered workshops to alumni in financial planning, and the bank is developing an affinity credit card.
“The people I’m talking to could get their deals done anywhere,” Barber said. But they usually don’t tend to their finances as they should unless a banker seeks them out, he found from observing his and his wife’s friends. The Barbers are black professionals who live in Charlotte, N.C., and Dr. Mary Lindsay-Barber is a pediatrician.
Another part of his job is pure public relations, Shedrick Barber said. “We find we have a lot to overcome in terms of the bank’s reputation for serving African-Americans.” Barber worked in NationsBank’s community investment division, which focuses on low-income lending, before shifting market segments last year. He defends the bank’s new effort as an aggressive way to seek out customers who often are unfamiliar with NationsBank’s products, and he insists that it will not deter community reinvestment work.
Minority-owned banks, such as First Southern, acknowledge their most profitable customers fit the description now wanted by NationsBank. “We recognize that a 200-pound gorilla can sit anywhere he wants,” said First Southern’s Young
