Marketing during the coronavirus? Avoid the 'gloom and doom'
Financial institutions face a quandary over how to approach marketing in the midst of an economic crisis and a global pandemic.
Credit unions — particularly at the smaller end of the asset spectrum — continually face the challenge of differentiating themselves from the completion and ensuring consumers know they offer most of the same products and services as traditional banks. That challenge has grown as the COVID-19 outbreak has contributed to a sizable drop in loan volumes, a surge in deposits and a general decline in profitability.
How credit unions approach their marketing in the wake of those challenges could have an impact on growth and how consumers perceive them in the months ahead.
“When [the pandemic] first broke out, you went into crisis mode and [the messaging] was just, ‘Let's get our members over the hump,” said Amy McGraw, VP of marketing at Tropical Financial Credit Union in South Florida and a member of the CUNA Marketing and Business Development Council’s executive committee.
She added, “We immediately…created a commercial using one of our employees basically saying we’re here for our members. I hate to say it now, but back then we used the messaging that we’re all in this together; that grew tired very quickly. Everybody was using the same message.”
When the pandemic became widespread, many credit unions initially went forward with messages promoting safety and soundness, in part because there were so many unknowns in March and April. Bo McDonald, CEO of Your Marketing Co., a credit union marketing firm in South Carolina, said that messaging was replaced with a focus on preemptive communications around collections.
“We’re working with pretty much all of our clients to look at those people who opted to skip a payment a couple months ago when we gave that option,” he said. “We’re looking at those going through ACH if they have unemployment income coming in and trying to be proactive in reaching out, saying, ‘If you don’t talk to us, we can’t help you.’”
The depth of the economic downturn has also forced credit unions to change their messaging, added McDonald, pointing to a shift away from promoting products and services to emphasizing service and a willingness to serve consumers going through hard times.
Doug Strickler, CEO of Atlanta-based marketers Hot Inc., noted that uncertainty around the upcoming election is also contributing to wariness among consumers.
So what doesn’t work? In short, sources said, anything that reflects “business as usual” should be avoided.
“Everyone should be focusing on reassuring that as branches at banks and credit unions get to normal — and we’re clearly not there yet — there will be guidelines so members feel safe coming into the branch and interacting with those people who felt to a degree like family,” said Strickler. “The marketing has to be more uplifting. The gloom and doom — if I hear one more slow piano solo I think I’ll tear my teeth out.”
There’s an old adage that when a crisis hits, the marketing budget is the first thing to get cut, and Strickler said he has seen some of that in this new crisis as business paused when things first got bad in March.
“We wrapped up the things we could wrap up, and then there was sort of a time out, almost institution to institution, of, ‘Let’s huddle up in July and see where budgets are,’” he recalled, noting that many shops began to reengage with their marketing messages in the summer. “Our financial institution [and] hospitality clients, they definitely have been struggling, but they are starting to see opportunities to brand and remarket.”
With the pandemic showing little sign of slowing down dramatically before the end of this year, credit unions are also grappling with how to position themselves in 2021.
“Our marketing calendar itself was literally thrown out the window,” said McGraw. “Nope, we’re not gonna do a car sale in April; we’re not gonna do a HELOC promotion when we couldn’t even keep up with mortgage applications.”
McDonald said many of his credit union clients have adjusted their marketing plans to better fit the environment. Summer vacation and travel loan promotions were nixed, while advertising for products like boat and RV loans were prioritized.
Tropical Financial is forecasting no changes to its marketing budget for next year, said McGraw, and may run many of its usual promotions but with different messaging. Its planning sessions will begin in earnest next month, but she said flexibility will be even more important now than in the past.
One example of that is an upcoming “virtual car sale” focusing on used cars since captives have moved back to 0% rates in order to get cars off the lots.
Marketing calendars often change dramatically between the start of the year and the end, she said, “so this is just that on a larger scale; we have to be dynamic, move on a dime and be reactive if things shift again.”