One of the most common questions I get is, ‘how much should we spend on marketing?’ If I had the magic answer to that, my bum would be sitting on the sand of a Cayman beach and not a care in the world.
A magic number doesn’t exist, however, here are four factors to remember to find the right answer for your credit union.
- Consider it re-investing in your credit union. Marketing is not a mere expense. I see claims as vast as 1% to 30% of revenue reinvestment is needed to experience desirable growth. Let’s find the middle ground. In 2022, Nielson found that the average brand re-invests 3.8% of its revenue back into marketing. However, that’s still not your magic number. That number should increase if you are up against big brands that have a larger share of mind in your market. That number will also depend on the maturity of your credit union brand and current share of mind in your market. All too often I hear, ‘We are the best kept secret!’ – instant red flag that you haven’t dedicated enough to brand awareness.
- How much are your competitors spending? Let’s dive deeper into No. 1. Your marketing budget shouldn’t be a copycat game. It’s always good to have an idea of what you are up against, but that shouldn’t dictate your credit union marketing budget. Consider how the (now Coca-Cola-owned) sport-drink brand BODYARMOR, which challenged the PepsiCo-owned Gatorade brand with a fraction of the latter’s budget, by targeting niche communities and building brand advocates. With less budget and a more intentional strategy, BODYARMOR tripled its market share over a two-year period.
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