Magazine publishers posted an 18% decline in advertising revenues last year, more than twice as steep as a year before, according to the Publishers Information Bureau. Strategic advertising consulting firm TNS Media Intelligence reports advertising revenues in 3Q 2009 dropped 3.1%, their largest year-over-year decrease since the last recession in 2001.
Likewise, credit unions pulled back annualized marketing expenses to levels last seen in late 2006 and early 2007. Average educational and promotional expenses decreased 11.4% from 4Q 2008 to 4Q 2009, with the largest credit unions cutting back the most.
|
$1B+
|
$2,025,756 |
-14.80% |
|
$500M - $1B
|
$815,936 |
-13.25% |
|
$250M - $500M
|
$479,353 |
-11.77% |
|
$100M - $250M
|
$207,558 |
-10.88% |
|
$50M - $100M
|
$88,154 |
-8.18% |
|
$20M - $50M
|
$34,566 |
-9.95% |
|
$10M - $20M
|
$11,324 |
-10.72% |
|
All in US
|
$120,036 |
-11.40% |
$0 In External Marketing
The change in marketing budgets may be more than just a sign of tougher times.
“We allot zero dollars to outside marketing – no direct mail, no benefit fairs, no TV, no billboard, no nothing,” says Diana Dykstra, CEO of San Francisco Fire Credit Union ($646M, San Francisco, CA). Instead, for the past four years San Francisco Fire has relied solely on word of mouth promotion and appealing to current members.
In 2004, San Francisco Fire started tracking its Net Promoter Score, which gauges the loyalty of customer relationships. Now, the credit union bases all staff incentives on the score. “It is this focus on the member that creates word of mouth,” says Dykstra. And she’s right. As San Francisco Fire’s Net Promoter Score rises, so too does its gross new member growth.
|
2006 |
8.00% |
64.69%
|
|
2007
|
8.60% |
67.68%
|
|
2008
|
8.70% |
75.13%
|
|
2009
|
14.00% |
78.96%
|
But member growth isn’t the most important statistic as far as Dykstra is concerned.
“Our retention improved in 2009 to 98% of existing members,” she says. “A lot of credit unions open a lot of new memberships but lose as much on the back end.”
Wallet-share is an important aspect of growth from within. Only 20% of San Francisco Fire’s members have less than two services. That’s impressive wallet-share, especially considering the credit union does not count members with less than $500 in deposits as a service.
Well, Not Quite $0…
The credit union opts out of direct mail, benefit fairs, and TV, but it does spend $250 monthly on one form of external marketing: Yelp!. Dykstra believes approximately 80% of new member sign-ups are a result of the consumer review site. On Yelp! the credit union has 61 (mostly) glowing reviews and a perfect five star rating. The impact of Yelp! referrals is likely driven by the culture of the community.
“In San Francisco, when people are disenfranchised, they do something about it,” Dykstra says.
It’s this “do” aspect of the community that dictates Dykstra’s approach to marketing. “People don’t care what you say, they care what you do,” she says. “If your organization isn’t aligned with that, you lose”.
In the current environment, where competition is stiffening and advertising spending is likely to rise from its 2009 slump, how will your credit union differentiate itself to current members? To a potential field of membership? Regardless of your marketing mix, employing strategies that foster loyal member relationships is an effective way to grow organically and reduce attrition.