Over the next couple months I am going to focus on some case studies that demonstrate an integral form of marketing for financial institutions: Event-based marketing. Generally, when this term is used in reference to financial institutions, it describes a client relationship management (CRM) process in which a marketing message is triggered by a member who is going through a given event. For example, sending an on-boarding information packet to a new member or providing refinance information to a member who recently lost their job.
To begin the analysis with this level of event-based marketing is a bit too exclusive for my liking. What about events in member's lives that aren't as major as switching financial institutions or losing their job? What about those events that affect many members? Surely, the marketing potential around these more light-hearted events can be just as effective as those that are monumental and individual specific.
Below are three such examples of credit unions that have used an event to promote a product. The goal is to give you some examples of how these credit unions were able to make their products and services more relevant by implementing event-based marketing.
Numerica's "Out of the Park Rates on New Money Deposits"
With Major League Baseball's pennant race just around the corner, Numerica Credit Union ($931M, Spokane, WA) decided to boost deposits by offering 18-month 2.39% APY and 24-month 2.72% CDs with a catch (awful pun intended). When members sign up for the "World Series Certificate", they designate a league (American or National), which they believe will win the World Series. For each game won by the league of their choosing, 0.05% will be added to the rate of that members CD. Thus, the winner will be accruing an additional 0.20% to the APY for the term, making the possible terms 2.59% and 2.92% for the 18-month and 24-month certificates respectively.
The promotion has been running for three years now and according to Jane Ronnfeldt, VP of Marketing, the goal this year is to roll-over $10 million in old deposits and generate $10 million in new money. Jane says that the event has become so popular over the years that it is always a part of their yearly marketing plan. Numerica has also built a contingency of loyal members who participate in the event each year, taking advantage of the highly competitive rates.
Community First's "Loan Sale"
Community First CU of Appleton, Wisc., ($1 billion in assets, 77,000 members), held a four-day loan sale beginning January 31, 2008. For those of you that don't remember the momentous event that occurred on that date, this was the day after the Federal Reserve unexpectedly dropped interest rates 75 basis points prior to their regular meeting.
Community First's pre-made ads (they plugged in the interest rate once the Fed's regular announcement was made) hit the airwaves within 24 hours of the Fed’s lowering began making news headlines. The credit union offered rates as low as 3.95% on any secured loan, real estate and refis included (the rate was guaranteed for five years). The lowest rates were for the best credit and for loans of at least $10,000 in new money.
Persons taking advantage of the loan sale also had to have a direct-deposit checking account with the credit union. Community First was hoping for $35 million in loans but was a bit overwhelmed when 2,000 calls came in on the first day. Over the four days of the loan sale, Community First received 3,000 applications for $158 million in loans (well above their goal of $35M).
Mid-Atlantic's 555 CD Promotion
According to Callahan research of bank mergers over the last decade, on average 15-20% of a merging institutions' deposits will leave the continuing bank within 12 months of the merger. In Montgomery County, MD where community based Mid-Atlantic FCU ($243M) is located, three bank mergers in the area in 2008 meant that almost 40% of the county’s bank deposits would be merging into another financial institution in 2009. This could mean that more than $1 billion in deposits in the County will move over the course of the year and at least nine out of 22 bank branches in the county will have new names on their building at some point in 2009.
Realizing that many of the deposits in the area could be up for grabs, Mid-Atlantic launched a multi-phase direct mail postcard campaign, sending out 20 thousand postcards to all non-members within 1-2 miles of a branch. As you can see from the picture above, they emphasized the recent merger activity with some cheeky wording. Mid-Atlantic then went on to explain their 555 CD promotion where if a member opens a new checking account with direct deposit, they were eligible to take advantage of a CD earning 5% APY for 5 months on up to $5,000.
From the beginning of February to the end of March there were 234 new checking accounts opened, where the average volume is normally 116. Mid-Atlantic also set a goal of 375 new certificates during the promotion. Over 520 new certificates were opened during that time – 157 of which were the 555 certificate. The average volume of certificates opened is 153 a month.
Regardless of the size or location of the credit union, these three event-based messages were all topics that resonated with the public at the time. When brainstorming your next campaign, take a moment to step back and look at the major events occurring at a national and local level. By tapping into the public's focus on these events, you'll be able to cut through a lot of static and differentiate your product or message.