Attracting New Members in Challenging Times
The challenges of the current economic climate have ironically created an unprecedented opportunity for credit unions to really distinguish the co-operative banking model in the eyes of the public. Progress is clearly evident when you look at strong, recent quarters of lending and deposit growth. However, when membership growth rates are considered, the momentum seems modest, given the magnitude of the opportunity. The industry's membership base grew 1.58% in 2008, which represents only a 0.3% increase over 2007 (Callahan & Associates, 2008). While positive progress is good, the minimal improvement across most peer groups does beg the question, is your credit union marketing as effectively and efficiently as needed to still attract new members in these lean times?
Increasing the Effectiveness of Acquisition Efforts:
1. The Strong, Silent Type Only Works in Movies
Silence is seldom good when it comes to effective marketing. It is never good when your industry is suddenly placed in turmoil. Unless your credit union is in a perilous financial situation, now is not the time to cut back on Marketing. A recent Harvard Business School research article concludes:
"It is well documented that brands that increase advertising during a recession, when competitors are cutting back, can improve market share and return on investment at lower cost than during good economic times."
This is the best time to raise awareness and strengthen the perception of your brand while many banks are paralyzed with re-organization, dismal balance sheets, and negative PR. Maintaining a strategic Marketing presence in this climate will not only help attract new members and assets, but equally important, help project a reassuring message of fiscal soundness to current members. However, these objectives can only be accomplished if your credit union maintains consistent and compelling communications. When organizations go silent during recessions, even the most loyal members get nervous.
2. Know What Makes Your Credit Union Truly Unique
A well-differentiated marketing position is central to improving the effectiveness of your member acquisition efforts. A clearly defined brand position is essential in order to stand out in a highly competitive market. The more differentiated your brand is, the greater the resonance with potential members and insulation from competitive pressures.
Bear in mind, good positioning is not based on subjective claims like "better service," "better products," or "better rates"--all promises potential members have heard many times before. No need to fuel additional consumer skepticism, when distrust of the banking system is already at historic highs. Instead, a solid position should always be built on tangible, proven attributes where your organization uniquely excels, consistently delivers, and most importantly, is passionate about.
3. It’s Not Just About Features, but Feeling
Effective acquisition strategies successfully blend the brand's emotional appeal within the message. Too often, many campaigns focus more on product details like playing the "best rate" game. You will undoubtedly attract new members, but have you ever analyzed the actual lifetime value of these "bargain shoppers", considering the sizeable cost of acquisition? Focusing solely on product features without generating an emotional connection puts you squarely in a sea of substitutes, where value is marginalized down to the best deal. Instead, anchor the message in the brand's emotional attributes. Potential members will be more likely to open an account because they identify with and believe in what your brand honestly represents, and not just because you offer the best rate.
Another key initiative that helps draw in new members through an emotional connection is education. If you are offering knowledge, guidance and sensible solutions you will engender trust and interest from potential new members. This is even more paramount today for consumers, given the increased need and desire for support and trusted advice in a volatile economy.
Accomplishing More with Less in Aiding Acquisition Efforts:
For many credit unions looking to take advantage of the market opportunity and reach out to new members, the untimely impact of the Corporate Credit Union stabilization plan could not have come at a worse time. Though added budgetary pressures will not make member acquisition efforts easy, there are still efficient means to help get your message out.
1. Target Your Audience
The average cost of acquisition, per new member, has steadily increased over the last several years. One of the most efficient strategies to mitigating this rising cost is to selectively target potential members who will perceive your message to be most relevant to their individual needs and preferences. Investing marketing resources on key groups that offer a higher conversion rate is far more efficient than the added cost of appealing to the larger, more diverse masses.
If your credit union serves many groups and broad geographies, focus on those that hold the greatest financial opportunity for member growth and product penetration while resources remain tight.
2. Be Vocal About Good News
Given the nature of the co-operative model, it is not surprising that many credit unions are experiencing strong growth in certain areas, despite the economic downturn. If your organization is performing well, make sure you communicate it. Leveraging digital efficiencies such as your website and e-mail communication is great for publicizing noteworthy news. It is also important to continually disseminate timely press releases to local media contacts in your community. Seeing frequent, positive news coverage in this otherwise gloomy financial setting is almost certain to capture interest and attention from prospective members.
3. Help Member Services become More Comfortable with Selling
Effective cross-selling can also be a very efficient means to generate new members and assets. Leveraging the more personal nature of in-branch or call center conversations provides an ideal opportunity to raise product awareness and interest. Train staff to ask members the right questions, so they can then make informed and helpful recommendations about relevant products and services. If done correctly, it becomes more about helping and less about "selling." Not only will members appreciate the consultative approach in looking out for their best interests, but they will also be more likely to pass along a recommendation to others with similar needs.