MADISON, Wis.-Credit union marketers are feeling the economy's squeeze on their budgets, and facing a new year's challenge of clearly demonstrating the marketing function's ROI.
"Credit unions have to understand that marketing is a necessary business expense," said Rich Jones, VP of Marketing at Elevations CU and chairman of the CUNA Lending Council. "Marketing doesn't normally get the respect it deserves. We don't sell anything; we don't close the deal, but we start the conversations."
As consumers become ever more conscious of the dollars going into and leaving their wallets, it is critical to get out in front of the public and make strong arguments as to why individuals should keep their money with a respective credit union. The only way to do that, Jones points out, is with targeted marketing messages across a variety of channels. "I think strong brand message is absolutely essential. I think credit unions need to invest in a strong marketing strategy in 2009 to capture mindshare of all those disenfranchised consumers," he said, before pointing to recent big bank mergers. "There is going to be a lot of consolidation of marketplace. You've got 'WellsCovia' and 'ChaseMu' that are going to collapse together that's going to disenfranchise a lot of customers out there. They are going to be looking for options."
Despite its critical mission, marketing is still usually one of the first areas to see cutbacks during rough economic times. "We're faced with having to make some serious decisions in order to cut expenses and boost income to remain viable," said Kerry Parry, VP-Marketing at Premier Members FCU, Boulder, Colo., and a member of the CUNA Marketing & Business Development Council. "It seems like for most credit unions the first and easiest place to look at cutting is in the marketing budget. We're having to take a hard look at everything we do in order to keep funds available to keep our name in the public eye. Sacred cows like newsletters and regular mailings are being reevaluated and in some cases eliminated."
In short, said Parry marketers must meticulously track ROI. Marketing efforts that do not earn their way in the budget are cut, a process Parry admitted is not fun, but noted that it can be a "healthy exercise" as it makes the marketing department and the credit union as a whole leaner and more efficient. "It's like cleaning out your closet. If you had an ever-expanding closet, you would never clean it out," she said. "But with limited space, you force yourself to get rid of some things in order to make room for newer, cooler stuff.
"Our challenge is to do a much better job of instilling in our daily activities the benefits of being organized and strategically focused to produce results-based marketing," added Carol Payne, VP-communications & marketing for the California and Nevada Credit Union Leagues in Rancho Cucamonga, Calif. "Nobody cares what you did yesterday. They only care if it is still distinguishable from the competition, garnering great results."
Tracking ROI on electronic media is very difficult, though it is easier to target select audiences with cable advertisements. Jones noted that direct mail provides the easiest way to track return and build strong models, as the CU knows who received a flyer and who responded.
He advocates a multi-faceted approach to bring in new deposits and loans by changing the message and channel based on the potential member segment.
"If we're chasing down deposit money we need to be in the newspaper and we need to be there regularly," Jones said. "But if we're looking for loans, you're looking to the younger Generation X and Generation Y. So search engine optimization and marketing is absolutely critical. You have to find a way to connect with those potential members online."
Credit unions should also bear in mind that the public still has not fully understood the differences between banks and CUs; Payne argues that CUs need to "move in ways that bankers won't" and deliver that message consistently.
"We have to look outward, not within the industry to expand the potential for branding the philosophical values of the movement," she added. "We have to talk the language that the consumer and members understand-and that's the language of usable promotions. It doesn't do us any good to state goals and objectives to ourselves to make credit unions top-of-minds for American consumers-we have to show them the benefits on a daily basis.
