SEATTLE-The evolution in credit union marketing has been forced by economic necessity to become a much more strategic and comprehensive function.
That is the message from Mark Weber, president and CEO of Weber Marketing Group, who told Credit Union Journal marketers at CUs have never been more challenged than they have in the last four years.
"The recession has raised the bar for marketing caliber," he said. "I see examples of credit union marketing that have stepped up much higher, and I've seen some go down in flames. The skill set that was needed prior to the recession is very different from during and after a recession. It has been great for those with the knowledge and expertise during this trying period."
Weber said his agency has received many calls from credit unions that found what worked before is no longer working.
"We are not a typical graphic design firm, so our calls have been for higher level strategic challenges," he reported. "We hear from credit unions that are concerned because their market share is not growing. We are asked to evaluate the demographic database of the market for credit unions."
Common Problems & Challenges
Some of the more common complaints by CUs: they feel they know their existing members, but wonder who else is out there? Who should the credit union be marketing to? What share of wallet does the CU have?
According to Weber, resolving such challenges requires a "pretty complex" mapping, research and data-driven capability. He noted most credit unions are feeling an impact on their capital from slow growth, but at the same time have a need to get younger and sell more loans.
Another issue: some CUs might have brick-and-mortar branches in locations that were picked 20, 30 or 40 years ago. Weber said in some cases the branches should be moved, closed, shrunk or even enlarged-and marketing is a key part of figuring out which option to choose.
"Marketing goes vastly beyond simply telling members about a loan promotion," he declared. "It involves looking five or 10 years into the future, revamping delivery systems and possibly revamping the approach to the marketplace. A lot of boards, CEOs and COOs know they don't have the expertise."
Marketers are thinking about the future of their departments as they are asked to solve complex corporate goals such as improving mortgage lending, Weber continued. He noted some credit unions are starting to offer wealth management or small business services, which have not traditionally been mainstays for CUs, meaning the answers are driven by data analysis, research and product development.
The efforts and tactics in CU marketing departments have changed dramatically, Weber observed. He said virtually every marketer has been told to do more with less.
"They are asked to add social media, promote new member growth and do a rebranding, while at the same time getting an e-mail marketing campaign up and running," he said. "It has put immense pressure on marketing departments to rethink the skill set of the team they have, or perhaps start fresh."
This pressure leads many to question when is it best to handle marketing internally and when to use an agency, he added.
Transformational Rebranding
In some cases, Weber believes a credit union must implement an organization-wide, transformational rebranding, including all employees. He said this means making certain every person from management to frontline staff is fully aligned and trained.
"Get everyone speaking the same language," he advised. "Everyone should be able to tell a potential new member what sets the credit union apart from other financial institutions that are available either down the street or online. This improves the chances of a differentiated brand exponentially. It is the difference between a garage band and an orchestra. If all the elements are not orchestrated, it is possible to achieve pockets of success, but it won't be sustained."
The best branding in the U.S. is something that makes a credit union "cool." However, Weber lamented, such branding is not widespread.
"Those that have executed that well are seeing tremendous results in new member growth," he said.
Asked if CUs should still be using direct mail in their marketing, Weber said two or three years ago the answer might have been "no" at many organizations. People reached the point where they saw direct mail as a dated concept, but today Weber said direct mail is a good option, as long as it is highly targeted, highly segmented and members opt in.
"There are lots of successful targeted direct mail campaigns, including mortgage loans, home equity loans and auto loans. This makes for profitable members."
Social Media Is For Dialog, Not Growth
If a CU has more than 50% of its marketing efforts in social media, Weber said it should have a cowbell attached to it as it may go "off the cliff."
"Social media is very important for brand management, and it is important to have a dialog with the community, but it is just one channel," he said. "The impact results on the bottom line have been modest at best. Everyone likes to talk about it, and point to how many hundreds of millions of people are on Facebook and Twitter, but increasing the number of 'likes' does not drive strategic business growth."
Weber insisted he does not to dismiss the importance of social media, but he warned an "over focus" on social media means the credit union is "not minding the store."
"I am part-owner of a winery and people love to talk about wine and food," he said. "People are extremely passionate about wine and food. But they don't wake up on a Saturday morning wanting to talk about their credit union."
In recent years many credit unions jumped on board the social media train and opened up a Facebook page, but Weber said he knows of $1-billion credit unions with less than 150 "likes."
And, he warned, if someone says social media is "free" CUs should "run for the hills" as it is far from "free" to have people-usually from the credit union's marketing department-writing content and engaging members.
While Facebook and/or Twitter might not be a panacea, Weber advised CUs to find relevant ways to use online channels, including search engine optimization to build awareness, grow loans and drive bodies to branches.
Future Branches
Weber Marketing is looking at futuristic branch design, said Weber, noting the agency has designed some 1,200 branches nationwide. He said the prototype branches of the future are about being relevant to each institution for how it is going to tell its story in its brick-and-mortar presence.
"Each credit union has its own answer, based on its culture and the people," he said. "If members have gone through the trouble of driving to a branch, they are looking for human engagement. Yes, the future is about technology, but it will also be about branches."
Branches are not dying, they are being reinvented, he continued. When examining how spaces will be used in the future, Weber said traditional tellers may or may not be part of the picture, but predicted there will be more advisory services performed in branches. Also, he said, more credit unions will be serving the needs of small businesses in their branches.
Wanted: ROI
CEOs and CFOs have never asked for more trackable, measurable and quantifiable results in the all the years marketing has existed, Weber said.
"They want to see the ROI on a brand, and the brand is either an incredible access point or an incredible hurdle," he said. "Even the name 'credit union' is still confusing to anyone under age 35."
There is a science to understanding if a CU's name is an asset or a barrier to new member growth, Weber said. CEOs and boards regularly ask if their credit union should change its name, often due to lack of loan growth or market share, making the issue of brand management one of the fastest-growing skills for marketers.
"We help organizations determine their brand," he said. "If the credit union doesn't know its brand internally, then there is confusion among members and in the community."
The company has done diagnostic brand management for credit unions 160 times, and it has helped change the name of 37 credit unions. According to Weber a name change is the most painful process an organization can go through-more painful than a merger.
"But the opportunity to do a name change well is transformational," he said. "It allows CEOs to align everybody in the same direction and say, 'That's where we are going.'"
R-E-S-P-E-C-T
The credit union marketing position gets the respect it deserves when the work warrants it, Weber believes. He said he works with "incredibly brilliant" marketing people who have evolved tremendously.
"The best marketers understand the best ideas might not come from within the financial industry," he said. "Adaptation is important, and innovation in marketing and branding is coming from outside the industry."
Weber and his firm have partnered with CUES to launch a two-year executive marketing management school in Seattle. It will take no more than 50 people into the future of what marketing is going to look like, including visits to progressive companies such as Nordstrom and Microsoft.
Asked where credit union marketing can improve, Weber responded, "The biggest area is strategic planning. Credit union marketers need to locate their market and identify the share of wallet the credit union has."
