How much should my credit union spend in digital?

“How much should my credit union spend in digital?”

It’s a good question. And one we get asked often.

Sometimes, the question is directed around a specific tactical item.

For example, I find this to be the case when a credit union has self-diagnosed regarding a particular challenge (our website is old), written their own prescription (we need a new website) and are coming to us to fill that prescription for them (how much will a new website cost).

And it’s not just websites. This pattern extends to email marketing, web videos, content marketing, referrals, social media, digital marketing campaigns and just about any other digital tool.

This is where I believe the problem exists.

It’s an epidemic that plagues a vast majority of credit unions as they continue to adopt digital tools and channels with no unified digital lead generation framework.

Diagnosis: Digitoolitus (Are you infected?)

It’s time to stop looking at the “cost” of these individual digital tools.

Instead, consider investing in a unified digital framework that can reduce the cost of acquisition, increase share of wallet and improve operational and marketing efficiencies.

Perhaps credit unions view digital tools as a cost because they do not have a clear way to report the benefits, impact and value that these tools can bring to a credit union’s bottom line.

For example, if your credit union spends $37,000 on a digital video series (yes… this was a budget for a series we uncovered as part of a digital diagnosis), then this series should, at a minimum, generate $37,001 in revenue from loans and new accounts. But really, it should be much more.

For some, this may be hard to track if the video is not properly distributed within the digital sales funnel or does not have the proper calls to actions to a particular landing page that accounts for channel and revenue attribution.

But with a proper digital marketing and lead generation system, this is now possible.

One question begets another question.

Before I can answer how much your credit union should spend in digital, I must first ask some additional questions as part of the digital diagnostic process we employ at CU Grow.

• Define a lead at your credit union. Is it as simple as an email address from a member or consumer?

• What is the average loan amount applied for through your digital channels? How does this compare to your physical branches?

• What is the volume of leads being generated through your digital channels? How does this compare to your physical branches?

• How many of those leads are being converted on a weekly, monthly or quarterly basis?

• What loans are most profitable to your credit union? Auto? Mortgage? Credit cards? Personal loans?

• Are you competing on loan volume or do you have other income tied to that loan or account?

• How well-positioned are your most profitable loans in your digital channels? Are you positioning them on more than just features and rates?

• What is your loan application abandonment rate?

• Where do your offline channels (TV, print, radio, direct mail) drive consumers to apply for a loan?

• Have you ever tried to apply for a loan or new account at your credit union on a mobile device? How does this compare to Simple’s or Moven’s UX?

• Do you re-engage or follow up with abandoned application leads as part of a nurture process?

• What is the average cost to acquire a lead?

• How does the acquisition cost to acquire a lead vary between digital and traditional channels?

HINT: Here’s how to calculate that number. I recommend doing this separately for your digital channels and then compare that to your physical channels. Which one has a lower acquisition cost?

• Once a lead is acquired, do you have a defined digital process for onboarding and cross-selling that account?

• How are you using transactional data to cross-sell a new account to increase share of wallet based upon third-party relationships?

• How much is a lead for a loan or new account worth for you over a lifetime?

I have one final question for you:

Once you’ve done all the hard work above and taken time to answer the questions, take a moment and think. All other benefits aside, what if an investment into a unified digital lead generation framework, a true digital asset, could:

• Increase yearly net loan growth by 9.8%?

• Increase yearly total number of account holders by 9.2%?

• Generate 75% of leads versus the 25% acquired through traditional channels?

I now have one final question for you to consider.

How much should your credit union spend in digital to make that happen?