How much does a new member really cost?

The calculation is not a complex one: credit union growth is imperative for long term survival. Retain your current members while at the same time adding new ones. While marketing budgets often focus on the amount of money you are willing to spend to build your member base, how do you actually determine that number?  When budgeting for member acquisition, the options for marketing programs are endless – print, digital ads, social media, email campaigns. Where are marketing dollars best spent? What is the “right” amount to spend on each medium? To begin to answer that question, you must determine how much it costs for you to earn a new member.

How Much Does a New Member Cost?

Unfortunately, there isn’t a universally defined way to calculate this number. It can vary greatly depending on how credit unions decide to categorize costs. Acquisition certainly should count all marketing, advertising, and other awareness-building activities. Most business strategists believe in the philosophy of also adding more general overhead costs as well, such as salaries, rent and labor expenses. Calculating your fixed costs and your variable costs is a logical first step in the equation. Then, having a set goal for revenue and member growth will assist in determining your current position versus where you want to be. Depending on your risk tolerance and aggressive growth goals, you can elect to spend a percentage of your revenues on new member acquisition.  Generally speaking, and highly dependent on methodology and accounting type, according to a study by market analyst firm Vetter, the average cost of acquiring a new member for US credit unions is somewhere between $400 and $700 per new member.


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