Credit Union Marketing On A Shoestring Budget

It may seem odd for a Credit Union marketer to say, but our bank brethren have their priorities in order!

by. Eric Gagliano, SVP Client Management, MarketMatch

According to a 2010 ABA Bank Marketing Survey Report, the top 3 primary marketing goals for banks are:

  1. Expansion of existing relationships
  2. Customer retention
  3. Increasing brand awareness and brand equity

It may seem odd for a Credit Union marketer to say, but our bank brethren have their priorities in order!

If You Have Just $1

We tell clients all the time … If you have just $1 to spend on marketing, focus on your members.

We all know that it costs significantly less to retain than to acquire.  But, unless you have 100% checking penetration and average 4-5 accounts per member, that is also where your best growth opportunity is.

Your current members are more likely to get their next product with you if you stay top of mind.  And they are more likely to refer to you if you give them a reason.

The key is to connect with your members on a personal level.  It’s like Cheers … sometime you just want to go where everybody knows your name.  And who can connect on a personal level more than credit unions?  We are directly tied to our member’s most driving desires … as long as money is involved.  And we can connect better if we rethink segmentation.

Rethink Segmentation

Do you remember when Gen X was a bunch of flannel-wearin’, Nirvana-listenin’, baristas living in Mom and Dad’s basement — and that was the extent of their ambition?

Fast forward to today, when Gen X is driving a minivan to their kid’s activities, meeting a monthly mortgage payment, trying to save for a seemingly nonexistent retirement and … well … writing an amazing article for CUinsight!

As marketers, we understand that segmentation is little more than politically correct stereotyping.

It’s our job to stick everyone in the world into some kind of bucket.  Traditionally, we’ve done this based on generational criteria: The Greatest Generation, Baby Boomers, Gen X, Gen Y, Millennials, Gen Next.  The problem is that generations grow up – they evolve.  Segmentation based on generation is a moving target.

Now, consider this … when Ben, my first child, was born, EVERYTHING changed!  That week, I picked up the phone and started learning about life insurance.  We bought a minivan for the power sliding doors.  During the “nesting” phase, we remodeled the house, prepared a nursery and did all but pad the walls in child-proofing.  All of this had some financial and banking ramifications.  And you know what?  My needs as a new parent were essentially the same in 2003 as a new parent’s needs in 1983 and will likely be in 2023.

As credit unions, we are needed MOST during life’s big changes.  Our job is to identify those needs and translate them into product solutions.

Consider segmentation based on Life Stage.

There are certain events in nearly everyone’s lives that we can predict and that generate specific financial needs.  When your members are getting married, having children, buying a home, retiring, getting divorced … that’s when they need you most.

Once you’ve identified the relevant Life Stages, think about these folk’s needs.

  • How do they save and spend?
  • How do they borrow and for what?
  • What are their needs in the near future?
  • What conveniences do they want and need?

Finally, assign the most likely products and services to fulfill those needs, then you can:

  • Bundle products,
  • Package your bundles in ways that will differentiate you and facilitate meaningful conversation with your members
  • Train your sales staff to narrow the focus of their discussions and
  • Fine tune your targeting of external and internal communications

Rethink Your Geographic Targeting

Even when you’re in acquisition mode, you should focus on your existing members.  You can acquire the very best new members through mirror modeling.  Focus your efforts on those people who “look like” your current best members.

Identify Your Very Best Members

Pretend, for a minute, that you could take one of your members and stick them in a Xerox machine.  Who would you pick?  Someone with the highest deposits?  The most impressive loan balances?  The most services per household?  Would they have checking?  Would they religiously use their debit card?

Your answer may be different than the credit union’s down the street or the community bank from across town.  You need to define exactly what kind of member you want.

Once you’ve identified them, pull an address file of every one of your current members who meet the criteria.

Birds of a Feather

Think of your neighborhood.  I’ll bet most of your neighbors look a bit like you.  Maybe it’s an area with a gaggle of young families with kids.  Or it’s a flock of empty nesters.  The socio-economic law of averages says that birds of a feather tend to flock together.  And this can be a powerful tool for targeting.

By defining a narrow target and geo-focusing your marketing efforts to those areas with the highest concentration of your best members, you’ll have a significantly better strategic effort than if you simply target those who live within 1-2 miles of your branch network.

You can also have a message with a laser focus.  Understand your best members: What are their pain points?  Why did they choose you?  Why do they stay with you?  What life stages are they living through? What products are they most likely to have?  How are they most likely to use them?  Once you understand your best members, you’ll better understand how to communicate to your most desired prospects: What products they are most likely to need with you.  How they are most likely to use them.  What their key purchase criteria is.

With a little upfront homework on understanding our member’s life stages and a mirror modeling strategy, you can retain your best members, you’ll know where they live to find more of them and you’ll know how to talk to them.  That is a powerful marketing formula that will help you operate on a shoestring budget.

Eric Gagliano

Eric Gagliano

Eric is a leading credit union marketer with more than 17 years of marketing experience. Coming from the advertising agency world, as an account executive focused on strategic planning, branding, ... Web: www.WeKnowCreditUnions.com Details