CHARLESTON, W.Va. -- Pioneer West Virginia Federal Credit executives wanted to move its marketing more aggressively into social media.
The 75-year-old, $191 million CU was relying heavily on traditional media, primarily local newspapers, to advertise, according to President and CEO Dan McGowan. "While that route generated a reasonable amount of new prospects, I always flinched when signing the checks to pay for the ads," he said.
When McGowan took over the helm in October 2014, he promised the CU's marketing chief Shannon Bradley that she would get an opportunity to immediately re-shape the marketing budget.
Pioneer had begun using social media in 2011 primarily as a tool for connecting with the public by posting pictures of employees out and about in the community.
"After tracking and re-evaluating the results and cost-effectiveness of past marketing efforts using traditional forms of media we quickly realized we were spending astronomical amounts of money for media that was truly not as effective as [we had] imagined," Bradley said.
Pioneer took a two-pronged approach to generating new sales through social media: the first was using Facebook postings to boost visibility to a broader audience. "Like a newspaper advertisement, this method [got] the word out, but it's still impersonal in nature," McGowan stated.
The second, more personal approach was just through word-of-mouth social interactions among members with their friends and family. And though social media marketing isn't exactly free, it's still "dirt cheap" compared with advertising in newspaper or TV, McGowan noted.
The CU is headed toward "record earnings" this year, according to McGowan, in part thanks to a significant reduction in marketing expenditures.
Between Aug. 31, 2014 and Aug. 31, 2015, the Pioneer's marketing budget plunged by about two-thirds (from $241,600 to $84,900), while loan production fell slightly (from $56.3 million to $54.5 million). Thus, on a loan-per-marketing-dollar basis, that ratio skyrocketed from $234 to $642 -- underlying the efficiency of switching to social media marketing.
"We attribute all of our new loan production to one aspect or another of social marketing," McGowan said.
As for membership growth, McGowan believes social media boosted those numbers too – with a caveat.
"Our total membership has been relatively flat over the past 12 months, currently showing growth of only 99 members to 17,159 at the end of September," he said. "Not much to brag about in terms of aggregate growth, except that new members are in fact coming to us at a rate of over 100 per month, so that's about the current rate we must get in order to replace memberships which come to an end for one reason or another."
But McGowan concedes that Pioneer faces some serious challenges in the coming years. The economy in and around Charleston remains dominated by the faltering coal mining industry, while the region's population is aging.
"Young people are moving away from Charleston to find work elsewhere, as such, we need to attract a younger membership," he said. "And we think social media will help us reach these folks."
