Time To Get More Creative In Soliciting New Business

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With internet banking and banking by telephone using interactive voice response, there's no disputing that the credit union industry has embraced technology, at least operationally.

Yet notwithstanding a few exceptions, there's still a noticeable absence of creativity in the way credit unions use new technology to solicit business.

I believe this may have more to do with the way credit unions approach advertising in general for business development purposes. For the most part, just like banks, credit unions generally rely on brand advertising, a timid soft-sell approach that effectively seeks to do nothing more than ingrain the name of one's financial institution in the mind of a prospective member. Brand advertising generally doesn't compel anyone to call or visit a credit union or their website, and its effectiveness is generally not measurable. However, to the delight of commissioned advertising account reps everywhere, brand advertising, they say, requires a significant amount of repetition to be effective. It reminds me of that old beer commercial, "Miller Lite, less filling, tastes great," except that for our industry and so many others, it's become "Brand advertising, less measurable, more repetition." Adding to the challenge is that we have two less-than-favorable conditions competing for prominence.

With the high cost of media being what it is today and with the audience for advertising messages becoming increasingly fragmented, credit unions, like other financial institutions, need to rethink how they approach advertising. It no longer makes sense to simply run ads that restate the name of your credit union over and over again and make "what if" offers, unless, of course, you're introducing breakthrough products and services that would actually compel consumers to call. Instead, brand advertising should be a byproduct of a credit union's community involvement and/or direct response marketing, efforts.

If credit unions want more business, isn't the least they should have to do is ask for it? The most self-evident and universally accepted axiom of sales is to simply "ask for the business," which is exactly what the function of direct-response marketing is intended to accomplish. Ironically, however, most credit unions do not employ this type of marketing extensively, or at all, and frequently don't "ask for the business." The consequence is that credit unions have ceded a significant volume of potential business to a competing industry that does.

I'm referring in particular to the mortgage lending industry and, even more specifically, to non-financial-institution affiliated mortgage companies. This entire industry exists, and more importantly thrives, because it employs the very marketing tactics that credit unions do not, thus allowing them to siphon off a significant volume of mortgage business that could have otherwise gone to them. This is borne out in the disproportionate number of mortgage solicitations we receive online, in the mail, or see and hear on TV and radio, respectively, from mortgage companies. How often do you hear the same message in the same media from credit unions?

Because brand advertising requires no interaction on the part of those subject to its message, it's generally tuned out. If credit unions would embrace direct-response marketing for mortgage business the way mortgage companies do, and combine that with an embrace of technology as the mortgage companies have, too, they could create enormous marketing synergies for themselves. For example, credit unions have far greater opportunities than mortgage companies to cross-sell other financial products and services to a mortgage borrower. Furthermore, credit unions can package those additional financial products and services with a mortgage to create cost efficiencies that in turn can be used to offer comparatively lower pricing to consumers, or simply improve that credit union's bottom line, something generally not otherwise possible when offering financial products and services on a stand-alone basis. These reasons alone should be enough to incent credit unions to more zealously pursue mortgage business via direct-response marketing.

However, choosing to pursue direct response marketing over brand advertising will by no means assure greater financial success for credit unions. It simply just means that credit unions will have finally stepped up to confront mortgage companies for a greater slice of the mortgage market.

Thinking outside the box is never an end-goal, but a requisite intellectual exercise intended to discover and/or test bold new initiatives.

If credit unions want to succeed wildly against their mortgage company counterparts, the very least they will have to do is engage in bold new thinking. To simply acknowledge that direct-response advertising is more measurable and cost-effective than brand advertising for soliciting mortgage business, and then doing just that does not qualify as thinking outside that box. Playing catch-up to what others are already doing right is not a corporate strategy. What may now be required to recapture business lost to mortgage companies is unconventional thinking that leads to bold new marketing.

One of the many benefits that came out of the Internet boom was the abundance of new, technology-intensive marketing ideas. Many of those marketing ideas, or a slightly modified version of them, are still waiting to be rediscovered for use in a variety of new applications and industries. In fact, some of these previously discovered technology-intensive marketing ideas can be used by credit unions to offer a variety of free services to the public and/or to certain groups of consumers from whom a particular type of business is being sought.

For example, any Internet-based service that may not be cost-effective for any one person to pay for may be cost-effective for a credit union to offer free to a large group, if it can be branded with the name of their credit union and will lead to further interaction and thus increased business with members and non-members. This free service would, of course, integrate direct-response marketing components soliciting existing and prospective new members to inquire about other products and services offered by your credit union, and ideally, this free service should originate off the credit union's own website.

Given the high cost of traditional brand advertising, it's not unreasonable to assume that in the final analysis, paying instead to offer a free service to the public and/or to certain groups of consumers whose business is being sought, may ultimately be a more cost-effective way to generate business while also garnering greater goodwill from the community being served. And what better way to exemplify the value of credit unions than to demonstrate that even your efforts to generate business are borne out of giving something back to the community.

Carlton Roark is a licensed California real estate broker and commercial real estate lending professional serving the San Diego and Riverside County areas of Southern California who can be reached toll free from those areas by calling (877) LOAN OFFICER, ext. #1 or by visiting 877LoanOfficer.com

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