FAIRFAX, Va.-Credit union marketers battling a tough economy should put their focus in three areas, according to Paul J. Lucas.
Lucas, a marketing consultant and contributor to Credit Union Journal, said with the amount of competition in the financial services space "there is a need for focus, and for credit unions that means lending."
"The problem is when marketing people are stuck in the Dark Ages with poor branding. They need to drive loan growth with strong messaging that focuses on values and benefits for individual consumers," he said. "A secondary focus is a quality member. That means not just someone with $5 or $25 in a savings account. The credit union needs members who are engaged, so marketing needs to focus on product and service penetration."
The third area, according to Lucas, is getting members engaged on the e-services side: bill pay, e-statements, online banking, e-signature lending and remote deposit, among other applications.
"Drive those e-services, which are sticky products that maintain member loyalty," he advised. "Those people are more likely to have increased balances and loans."
Lucas said the level of effectiveness and professionalism in CU marketing depends on circumstances. He said some of the larger, more sophisticated credit unions are doing "very good things," and he praised the work of many at smaller CUs. However, he said he has also observed that "there are many people doing very poor things."
"Credit unions have a hard time focusing on the fact they are chartered to be a lender," he assessed. "They need to become highly proficient at marketing retail lending. Credit unions are not a savings club."
With that said, Lucas acknowledged effective marketing depends on the budget of the credit union. He said if the CU has the money for a comprehensive campaign, including direct mail, radio, TV, e-alerts, and even outbound calling, the effort can certainly demonstrate ROI if done properly.
But, he reminded, the messaging and the branding of such a campaign "have to be right."
"On the messaging side: clarity rules on value and benefits, and get rid of clever and cute stuff," he counseled.
All In Or Nothing On Social Media
The use of social media also is dependent on the size of a CU. Lucas said if a credit union is going to use social media constructively, it needs a person designated to do the job full time.
"It cannot be done in a half-hearted way," he said. "None of the numbers say credit unions absolutely need to do social media. Social media is social, and people still digest marketing messages through the main media channels, even Gen Y. This means radio and TV, which still drive good results if done correctly."
One technology trend worth watching is increased use of tablets and burgeoning capabilities of smart phones. Lucas predicted there will be a "shift" as more people use mobile devices.
"At a minimum, credit unions need to make sure their websites can be read by a mobile device. But the real question-how will these devices transform marketing messages in the future-is unknown, he said, adding, "People should be asking: How are we going to make this work?"
Lucas said the bulk of credit union marketing is promotional marketing, while too little attention is paid to branding and messaging.
"Everyone is giving something away. Quit giving something away and give clear retail messaging that highlights the benefits the credit union has," he said. "When you give something away you train your members to ignore the messages unless there is a prize involved. Not every campaign can be a giveaway."
Marketing = Rodney Dangerfield
Asked if the CU marketing position gets the respect it deserves Lucas responded with a flat, "No."
"The marketing department needs to have a professional in the position, just as it does with the head of accounting," he said. "In a down economy marketing should increase, not decrease, but it needs the right person in place. It needs to be a qualified person who can do retail marketing, but many credit unions can't find the right people or pay for good talent. They are willing to pay for CEOs and CFOs, but should realize they need to do so for the marketing position.
"There are a lot of good marketing people, including at small credit unions, they just don't get the budgets and salary they deserve," he added.
Measurables = Results
When Lucas speaks to credit union CEOs and boards of directors, he urges them to get metrics in place that allow for proper measurement of marketing efforts. Similarly, he said, every single marketing executive "needs to have specific goals and objectives that are tied to their salary and bonuses."
"These measurables should be related to loan growth, quality asset growth, and product and service penetration," he said. "Results can be measured; it just takes focus and time."
Lucas offered the example of one client that he said he'd prefer not to identify that hired him as a consultant in January 2011. After initially getting resistance, Lucas said he eventually convinced the CU's loan department to put its focus on the ratio of approved loans to closed loans.
"When I started it was 62%, and by the end of the year it was 91% and the credit union had its best lending year ever."
