Credit Unions Must be Proactive in their 2009 Marketing Plans

Is this the time for credit unions to go on the offensive with their marketing campaigns? Market indicators say yes.

 
 

Credit Unions Must be Proactive in their 2009 Marketing Plans
In uncertain economic times, credit unions are viewed as a safe haven for a growing number of consumers.  Over the last several months the mainstream press has highlighted the value of credit unions for consumers in prominent media sources such as the Washington Post, Wall Street Journal, New York Times and CNN.com.  Credit unions being seen as the solution to the current financial crisis for consumers is already apparent in some categories.  For example, first mortgage originations are up 40% in credit unions for the first six months of 2008 as compared to 2007. 

Credit unions clearly have a strong marketing opportunity.  Can targeted marketing help communicate the credit union message?  Obviously, the safety and soundness message is paramount at this moment.  Is this the time for credit unions to go on the offensive with their marketing campaigns?  Market indicators say yes.

  • Credit union auto lending is at a 15.5% market share as of June 2008, according to AutoCount
  • Major lenders are pulling out of consumer lending such as:
    • Student lending
    • Auto lending

Credit unions were created for uncertain economic times like we are in now.  How can you communicate the added value of your credit union?  The planning of your 2009 marketing budget can be extremely important to how your institution will communicate your message next year.  Is the marketing budget solely tied to the size of the credit union?  No.

Marketing Investment per Member by Asset Size
Marketing

Marketing budgets compared to the overall budget ranges of credit unions (as evidenced in the table above) shows that some larger credit unions actually have smaller budgets per member than smaller credit unions, proving marketing investment is also influenced by:

    • Field of membership
    • The community you serve
    • Each credit union’s philosophy

Marketing has to be looked at as a strategic operation of a credit union.  When building your 2009 plan, analysis must be done based on answering these core questions:

  • What are the objectives at your credit union?  How can marketing support these objectives?
  • What are the competitive factors in your local market?
  • What are your specific and measurable goals?

The average U.S. credit union invests $12 in marketing dollars per member, according to annualized 2008 market data.  How will local and regional variations impact marketing investment?  Every credit union faces varying market characteristics.

  • Markets with a higher concentration of community credit unions have higher marketing investment per member.
  • This higher investment is caused by more intense competition for obtaining new membership.

Marketing

Perhaps the most integral part of your marketing budget and subsequent performance goals is to develop some key metrics to measure the success of your campaigns with regard to your overall targets.  For example, some metrics would be:

  • Average loan balance
  • Average share balance
  • Member growth

What metrics will you use to measure success in marketing in 2009?  Let us know.

 

 

 

Oct. 20, 2008


Comments

 
 
 
  • It would be great to know what share of their marketing budgets is spent on web based marketing and as investment into their web presence as a key communications tool with members and driver of revenue from existing members as well as acquisition tool for new members.
    Joe Buhler
     
     
     
  • I'm a little bewildered that "dollars-per-member" is the measure these credit unions are using to budget their marketing spends. Calculating the budget based on total revenue, sales goals, and demographics will give a much clearer picture. In our market (Charlotte, NC), which is heavily banked by some of the Nation's largest financial institutions, the bulk of our marketing is in TV where we are attempting to win a place in the consumers' minds. But our Web spend is steadily increasing because the Internet sales channel evens the playing field with regard to convenience and branch network.
    Nathan Tothrow
     
     
     
  • I'm a little bewildered that "dollars-per-member" is the measure these credit unions are using to budget their marketing spends. Calculating the budget based on total revenue, sales goals, and demographics will give a much clearer picture. In our market (Charlotte, NC), which is heavily banked by some of the Nation's largest financial institutions, the bulk of our marketing is in TV where we are attempting to win a place in the consumers' minds. But our Web spend is steadily increasing because the Internet sales channel evens the playing field with regard to convenience and branch network.
    Nathan Tothrow
     
     
     
  • Good information, but I wish I could read this map; it's too pixelated to understand.
    Heather Snyder