How A Memphis CU Learned From Hollywood And Politics

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What can credit unions learn from Hollywood and politics? It's all about image.

What makes a so-so movie a box office blockbuster? What can make a less-qualified politician win over a more-qualified candidate? If you're thinking image, you've hit right at the heart of the matter.

Hollywood relies on the image of its movie stars to sell tickets. In politics, image is everything. The public's perception of any product or service will largely determine its success or failure. As marketers, how many times have you seen a good product flop because it wasn't marketed properly? And really, financial institutions are no different. Being perceived as a quality place at which consumers can conduct their financial business is vital to our survival.

Our local competitive arena may be very much like yours. The remaining community banks are being gobbled up by the mega-banks. This translates into a few very large banks that now literally have a branch on just about every corner. We have 13 banking centers in our market, and while they are in great locations, we are not as big as the smallest bank chain in our market.

In late 2004, we received an expansion to our community charter, so we now serve seven counties in western Tennessee and northern Mississippi. Marketing was charged with the goal of letting everyone in our field of membership know who we are, what we are and what we can do for them.

Our Strategy: Tell The Story

So, in the fourth quarter of 2004, we launched an image campaign. The strategy behind this campaign was simple-tell the First South story. Tell the public what makes First South such a great place to bank. We came up with a new tag line, "Banking with friends since 1957" to make it clear that First South is a financial institution. Consumers understand what goes on in a bank; they are a bit fuzzy sometimes when it comes to a credit union's function. We want them to understand that if they need a checking account or a loan, they can get it from us.

We looked at our competition and at ourselves to determine what we could offer that they could not. Here's what we found:

* Accessibility-if you live, work, worship or attend school in any one of the seven counties we serve, you can join. We don't deny you a savings account because of bad or no credit history.

* Financial strength and longevity-We've been around since 1957 and we are the strongest credit union in Tennessee with a perfect 300 from the IDC for three consecutive quarters. Plus, we cannot be sold to or merged into a commercial bank (unlike all the other banks in town).

* Great Service-you're a member and an owner, not a customer

The message was honed down and distributed in several media formats, including TV, radio, billboards and print ads. We rolled out the print ads first while we negotiated prices for TV and radio spots. The print ads ran in all major local newspapers either weekly or every other week and in two- or full-color whenever possible for the last quarter of 2004 and for all of 2005.

Initially, four billboards went up in May 2005 and we steadily increased those to a total of 12 by the fourth quarter of 2005. We couldn't afford to have huge billboards along the interstates and major roads in our field of membership, but we were able to find some smaller boards in key areas and along major thoroughfares. For example, traffic flow analysis by the Mississippi DOT shows heavy traffic on Highway 61 between Memphis and Tunica, Miss., the home to about 10 casinos. We were able to secure a board right at the intersection that marks the start of "casino row." So for less than $650 a month, First South is exposed to several thousand people each day. And all of these people are eligible to join.

The television and radio ads ran in June and July of 2005, right at the height of the bank-merger mania taking place in our market. Our ads stressed our main image points of service quality, fiscal strength, and stability. The next set of radio and TV ads that ran in August 2005 touted our newest location in Southaven, Miss. This showed consumers that First South is "on the grow," and gave us another chance to stress our convenience and stability.

The image advertising has been a great success. We have used both quantitative and qualitative means to measure the impact it has had on the credit union.

From a numbers standpoint, we felt the best way to judge the success of image advertising was by the increased growth we would hope to see in our major growth areas, such as capital, deposits and assets. If more people know about First South and recognize the name, then they will be more apt to consider us for their primary financial institution.

Here's what we found. By the end of the third quarter 2005, we have seen the following increases compared to the same time last year:

* Our capital has grown by 15.78%

* Our assets have increased by 7.73%

* Gross income is up by 11.66%

* Our ROA is running about 2.56%

And we've actually found out that the image advertising has paid off in some unusual ways. Job applicants have stated that they have seen our billboards or one of our ads, and we've had higher-volume responses to our employment listings. Other business leaders have commented to staff members attending community functions that we are "everywhere" these days. And several of the newspapers we advertise with tell us that they have seen increases in advertising from other local financial institutions once we started running regular image ads in addition to our product promotion ads.

The impact on our product marketing has been clear. We've seen increased ROI on our marketing dollars for product campaigns. One recent mortgage loan promotion netted a 1,882% ROI. We've seen our loans grow by 3.08% and our loan income grow by 7.03% compared to this time last year. We chose to use loan volume and loan income growth as our measures for the impact of our image campaign on our product marketing since net positive growth can be hard to achieve in a rising interest rate environment. Plus, our net margin is up 37 basis points over this time last year. That's another indicator of growth versus environment.

Another Benefit: Cost Savings

Another benefit of our image advertising: cost savings per ad space. Since we are now running both product and image ads with the newspapers, we have been able to drastically cut our "per time" rate. And the additional "umph" of running TV, radio, outdoor and print at the same time has really helped us gain more of the local consumers' attention.

First South will continue to run image advertising for all of 2006 and beyond. We have found it to be a great benefit to us and to our members. By growing the credit union, we can offer better products and services and more delivery channels to our members at better prices without sacrificing great service. Isn't that what being a credit union is all about?

Delynn Daniels is marketing director with First South CU, Bartlett, Tenn., and can be reached at ddaniels firstsouth.com.

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