8 FOCUSREPORT/Marketing
Marketing profes- sionals see credit unions investing more resources in
their 2019 budgets for digital marketing campaigns, in the hopes
of increasing their much-needed
market share of the millions of
potential young members who
are searching the web every day to
finance their lives.
This digital marketing strategy is even more critical for credit
unions because a FICO survey
found that only 6% of millennials
and only 9% of Gen Zers are credit
union members. More than 70% of
millennials and 67% of Gen Zers
are customers of national banks,
while 17% of millennials and 20%
of Gen Zers are customers of regional or community banks.
When it comes to digital
marketing, credit unions have
been lagging behind their bank
competitors.
Chris Leone, president of Web-Strategies in Midlothian, Va., cited
research that
showed only 27%
of credit unions
said last year that
the adoption of
digital channels
was a top priority,
compared to 63%
of banks that said
adoption of digital
channels was a top priority in
2017.
But credit union marketing professionals like Leone have noticed
that this appears to be changing.
“Finally, we’re starting to hear
credit unions say that they’re will-
ing to make more significant in-
vestments in tools, technologies
and digital budgets in a way that
maybe aligns a little bit more with
the competition,” Leone said.
“One study I read recently showed
that executives are looking to in-
crease digital spend across the
board. Marketers in those or-
ganizations are most bullish, so
they’re most optimistic on paid
search, paid display, paid social
and paid mobile.”
He recommends credit unions
consider earmarking about 45%
of their total marketing budget
for digital marketing and allocat-
ing those funds to support search
engine optimization, paid search
advertising (PPC) on Google or
Bing, online or banner display
advertising, social media market-
ing (which includes video, but not
organic social media marketing)
and email marketing.
However, when determining
a budget for 2019, it’s important
to know what the credit union’s
goals are. For credit unions, a
main goal is to grow loans and
membership, but it is just as important to specify those goals, according to Marne Franklin, CEO
of Uncommn Marketing Partners
in Greenville, S.C.
For example, if the goal is to
capture 50 new auto loans and
approve 50% of them per month,
credit unions should review data
and performance information to
determine what the ballpark budget number should be.
“That means the credit union
needs to receive 100 auto loan ap-
plications per month – approving
half – to reach their goal of 50 new
auto loans,” she explained. “This is
where we start breaking the num-
bers down further. Where will
those applications come from? If
half are going to come from digi-
tal channels and the other half
from other sources like traditional
advertising and indirect lending,
we now know we need to get 50
applications per month from our
digital marketing campaigns.
Looking at the historical data for
search terms, click-thru rates and
conversions, we can identify how
many people must see a digi-
tal ad, what percentage of those
must click on it, and how many of
those must complete the applica-
tion to get to our target number of
approved applications, which is
25 in this case.”
To keep digital marketing bud-
gets in check and goals realistic,
Franklin recommended limiting
the focus of marketing budgets to
key products that drive revenue.
“While special offers and pro-
motional rates can grab attention,
it is important to dedicate a por-
tion of the marketing budget to
evergreen branding messages,”
she noted. “This helps ensure that
potential members are served ads
about your core stable of services,
such as free checking and auto
loans, no matter the time or day
they are seeking more info.”
It’s also important for credit
unions to allocate about 12% of
their marketing dollars to buying
new analytics tools, chatbots, and
marketing automation and web-
site optimization software.
Updating the capabilities of
your website is a credit union’s
door to future
growth, James
Robert Lay, CEO of
the Digital Growth
Institute in Houston, Texas, said.
While credit
unions won’t think
twice about plowing millions to
open a new branch with an expected ROI within three to five
years, Lay observed, they hesitate
to invest $50,000 to $75,000 and
more to improve their website,
which can produce results within
days or weeks.
Lay said credit unions are digital retailers that need to optimize
their websites for positive member experiences and conversions.
“That to me can yield some of
the best returns on investment,
even more so than any digital
advertising,” he said. “You can
buy all the [consumer] traffic
you want, but if your website has
a conversion problem, whether
it’s a user interface experience or
some other form of conversion ex-
perience, you’re going to be leak-
ing opportunities and you’ll be
literally wasting dollars.”
Personalizing member and
non-member experiences when
they visit your website, for exam-
ple, can help capture more loan
conversions. Typically, when con-
sumers are looking for financial
products, they visit websites to
check rates, fees and other terms
for loans. But when consumers
return to your credit union’s site
for a second or third look at your
home loans, for instance, the
personalization technology tool
will automatically switch out the
content on the home page to fea-
ture the credit union’s latest mort-
gage offerings and other useful
information to help them make a
decision.
Leone emphasized credit
unions need to start acting as if
they are an online-only business
that knows how to make their
member experience frictionless.
For credit unions, that means making all online credit applications
quick and easy, and coupling them
with timely responses on loan
decisions.
“Seventy-three percent of peo-
ple under the age of 34 would
consider banking with Google,
PayPal, Square and Amazon be-
cause they are online-only busi-
nesses, and they understand how
to make the customer experience
as frictionless as possible,” Leone
explained. “I strongly encourage
you to do the same.”
While some marketers recom-
mend credit unions invest in on-
line display or banner ads, Lay
believes display is dead because
the click thru-rates are abysmal,
(less than 1%), noting that 40% of
click-thrus come from bots, not
consumers, and the conversion
rates are even worse.
Some credit unions may nevertheless use display ads because
they may improve brand awareness. But with the rise of ad blockers, many won’t see the banner ad
to begin with, Lay argued.
He urges his credit union clients
to allocate some of their budget
dollars for pay-per-click advertising because it can target members
and nonmembers in real time as
they search the web for financial
products.
Lay and other marketing experts agree there is a growing interest among credit unions about
marketing automation powered
by software programs that manage and automate targeted marketing messages to members via
email, social media and text.
“The opportunity today, here
in the experience economy, is
marketing automation,” Matt Pur-
vis, CEO of Purvis Management in
Eugene, Ore., said. “A major, stra-
tegic budget issue, marketing au-
tomation allows credit unions to
understand individual consumer
interests and needs in real time
and provide precise information
and appropriate offers on a one-
to-one basis.”
However, to maximize the ap-
plication of technology tools,
credit unions must also invest in
their marketing staff’s education
and training to help them achieve
digital marketing campaign goals.
“We see an expectation of many
senior leadership teams that their
marketing department knows exactly how to market to every generation, marketplace or persona,
yet they haven’t allowed a continuous education budget for marketing staff,” Meredith Olmstead,
founder and CEO of FI GROW
Solutions in Stamford, Conn.,
said. “If marketing
isn’t being allowed
time or money for
conferences, learning materials or
podcasting, they
can’t stay relevant.
Marketing departments should be
positioned to invest in continuing education for
their marketing
staff, or have the
resources to employ an agency that
can help them stay
relevant.” n
Leone
Lay
Digital to Dominate 2019 CU Marketing Budgets
PETER STROZNIAK
pstrozniak@cutimes.com
Olmstead
Purvis
Key Takeaways
Y Millions of potential young members are
searching for financial products on the web.
Y To gain their share of young consumers, CUs
expect to invest more dollars in digital marketing
campaigns and technology tools in 2019.
Y CUs should allocate more resources into
training and education to help marketing staff
maximize digital marketing ROI.