Many credit union representatives have said that when times get tough — such as during an economic downturn — the CU's marketing budget is the first to get cut and often the last to be reinstated. A recent webinar sponsored by Equifax shed a bit of light on marketing trends at credit unions today, with three analysts offering their perspectives on the current state of the field.
1. Marketing Budget vs. Operating Expenses
Marketing expenses took a bigger hit than other expenses starting in 2009, said Janet Lee, an industry analyst at Callahan and Associates, but since then they have increased at a higher rate than total operating expense growth.
CUs today have also put a greater emphasis on expanding their member base and getting their name into the community. Lee said that while broadening that base remains a top priority for many institutions, budgets will likely stay static for some time as credit unions attempt to manage their expenses while marketing across a broader range of outlets, including not only mass media, but digital and social media channels.
2. The Evolving Role Of Marketing
Sharon Simpson, senior special projects manager at Callahan, noted that credit union marketing itself has also changed dramatically since the early days of the recession, offering real-life examples of CUs that have risen to the challenge to get the greatest return on their marketing dollars.
Houston-based Smart Financial CU, she said, had seen a slowdown in loan growth and a shift away from indirect lending as a result of tepid economic conditions. Following a core conversion, the $580 million credit union shifted its focus to using more of the data it already had to track ROI on its marketing campaigns.
One key was using personalized URLs (PURLs) on direct mailings, allowing the CU to track visits to that specific site and monitor click-through rates. Simpson noted Smart Financial even ran PURLs on general awareness campaigns, not just on mailings for specific loan promos.
Smart Financial also scaled back on its mass media efforts, instead opting to focus on community events and other more interactive ways it could keep its name in the public eye. It also targeted specific member groups as a way to drive organic growth, including those who had not done business with the credit union for six months or more, onboarding new members over a nine- to 12-month period, and reaching out with thank you notes to members who had recently opened to accounts or paid off loans at the credit union.
Since those changes in 2011, said Simpson, SFCU is now able to monitor the impact and ROI of every campaign — including awareness campaigns — from community events all the way down to the newsletter. It also found that one-third of all loans generated were attributable to direct mail campaigns, and determined that it was earning a $14 return for every dollar spent on marketing.
"By the end of this strategy, the VP of marketing and the CFO had become very close partners — and those are two positions that don't always see eye-to-eye," said Simpson.
Another example Simpson offered was Tampa-based Suncoast Credit Union's rebranding and revamping of its website. The CU went outside of its comfort zone, looking at consumer expectations for website design instead of only looking at its own expectations.
Suncoast's site today includes not just product information, but even product reviews from members and other tools consumers frequently see on other sites such as Amazon.
"The site looks very different than other, more traditional financial institutions' sites," said Simpson. "They took some risks."
Simpson said she believed mass marketing can still do a great deal for credit unions struggling with brand awareness and giving potential members a reason to come in and do business with the CU.
"Marketing obviously is changing and continues to evolve to achieve the organization's goals, but most importantly, we're evolving to meet members' needs and expectations," she said.
3. How Insights Can Maximize Marketing Efforts
Credit unions should expect their marketing budgets to remain the same, said Alvin Green, VP of finance for Equifax's IXI division, but moving forward those budgets will continue to be allocated differently, so CUs must identify hidden opportunities to maximize ROI.
One of the best ways to do that, Green reminded, is to focus on deepening relationships with existing members, which is typically easier and less expensive than finding new members.
Segmenting and sub-segmenting members using data the CU already has on those members — including age, gender, address, products and services held with the CU, for example — allows a CU to expand its existing relationships with more tailored marketing messages for those segments as well. Some data can even reveal how certain members prefer to do business with the CU, which can also be very valuable.
"Some clients may not be tracking age or interaction preferences," noted Green. "Those two in particular can be important as we look at the Milennial population, who will become a large part of our financial growth in the future. Tracking information preferences is good to be able to understand how to communicate with them, as well as recognize where they're transacting overall."
