Credit Union Times - November 14, 2018

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