Make marketing a profit center
By Roy Page
Is your marketing department a cost center or a profit center? Or to put it simply: are you improving your credit union’s financial performance or just spending money?
Because credit unions are not-for-profit organizations, the idea of marketing as a profit center might seem inappropriate. After all, you’re not in the business of simply making money for your own gain. Instead, think of it this way: being a profit center means you’re helping generate revenue that strengthens the credit union by enabling it to return money to members in the form of lower fees and better products.
In order for your marketing department to become a profit center, you’ve got to take a strategic approach to marketing. That means understanding the role of marketing within your credit union as a whole. Not necessarily the role you play right now – but the role you should be playing.
Peter Drucker, well-known management consultant and author, explained marketing’s role this way:
“Because the purpose of business is to create a customer, the business enterprise has two–and only two–basic functions: marketing and innovation. Marketing and innovation produce results; all the rest are costs. Marketing is the distinguishing, unique function of the business.”
Think about that for a moment. All of the other departments in your credit union are inherently cost centers. Operations, IT, HR and others all play necessary and important roles in your credit union, but none of them actually generate revenue. And the credit union industry is notorious for taking a cautious approach to innovation. So if the marketing department isn’t pulling its weight in terms of driving results that improve financial ratios, how can your credit union ever reach its potential?continue reading »