Each credit union is not only different from traditional banks and financial institutions, it’s also different from every other credit union out there. And while some credit unions have been around for generations, others have only been established recently or are the result of mergers, where two or more credit unions have come together to create the critical mass to support the fixed costs of doing business. And of course, some credit unions restrict membership to people in a specific industry or occupation — like firefighters, teachers or the employees of a large company — while others are open to everyone, although they often focus on a specific geographical area instead, like a State or part of a State.
But there’s one thing almost all credit unions have in common: Tight marketing budgets.
The economics of being a credit union makes marketing difficult when you’re not just competing with other credit unions but also large banks and financial institutions, and increasingly with well funded and innovative fintechs. According to James Schenck, the CEO & President of PenFed Credit Union, their average annual marketing budget hovers at around just US$10 million compared to bigger financial services players whose marketing budgets can top US$1 billion, making it critical to develop truly cost effective marketing strategies that deliver sufficient numbers of new members and build loyalty.
Unfortunately, there is no silver bullet, one-size-fits-all credit union marketing strategy for all credit unions. But there are some proven best practices and powerful marketing principles that all credit unions should consider implementing in one form or another, particularly for those credit unions that want to thrive in the digital age. But it’s up to you, as a credit union marketer, to decide which will work best with your members when creating your own marketing mix.
While we wrote a slightly more critical analysis of some of the credit union marketing ideas that can be found on the internet and how we think that too many are written from the viewpoint of the interested party, we’ve highlighted 7 of the key marketing strategies for credit unions to consider:
- Promote Your Values
- Sponsor Local Communities and Charities
- Invest in Meaningful Content Marketing
- Constantly Customer Experience and Support
- Create Location Specific Content or Landing Pages
- Digital-Transformation To Target New Members
- Nurture and Reward Members With a Referral Marketing Program
1. Promote Your Values
You may think you need to compete primarily on rates and fees, but the truth is consumer decisions are driven by a multitude of factors, including emotions, community, connection, and personal values. In fact, according to psychologists, when making purchase decisions, consumers place greater reliance on emotions and experiences than hard information (although they often use facts to back up their decisions afterwards). So if you market based on your rates alone, it’s only a matter of time before another bank or credit union offers a lower rate and you find yourself caught in a margin destroying battle for members’ loyalty. As Jason DuPlant of Neches Federal Credit Union says, “For any offer or rate, a prospective member can probably find 1,000 more just like it — or better.”
In other words, focus on your credit union branding. What does your credit union stand for, what are its values and how do those align with the values, interests and aspirations of your members and potential members. Once you’ve nailed this, then you’ll want to ensure everyone in your credit union acts in accordance with those values and that you communicate them effectively.
2. Sponsor Local Communities and Charities
Following on from the previous point that credit unions should focus on more than just rates, fees and products offered, and aim to create emotional connections with members and potential members by developing trust, exhibiting shared values and interests and showcasing other value-adds, this is where clever use of sponsorship can help get across that message. If your credit union is focused on a geographical area, your marketing dollars can be well spent building up that connection by sponsoring sports teams at local high schools or colleges, or local social initiatives like helping young children learn to read or help elderly residents with gardening. And it doesn’t need to just be cash – you can encourage your teams to take part and allow them to take paid leave to join in. It’s all part of showing that you’re invested in the places where your customers live and that you’re giving back, and you’re relevant to their lives. Whereas if you’re focused on a profession rather than a geography, you could sponsor initiatives that help people get into that profession or help them when they leave.
Wondering which initiatives to sponsor? Of course, you can’t sponsor everything. But if you’re part of a community, whether based on a place or a profession, that’s going to be easier to identify. Remember, you have a wealth of customer data at your fingertips that can help you determine your members’ marketing personas. You can harness data from account histories, social media, support center information, NPS surveys, and online reviews to gain insights and highlight what makes you uniquely suited to a prospective member’s needs.
And why not ask your members to suggest initiatives and vote for the most deserving?
3. Invest in Meaningful Content Marketing
A crucial step toward differentiating your values is to make those values known, and content marketing can be incredibly effective at doing this. As a credit union, you can do this by creating insightful and engaging content for your website, blog, email, social media accounts and any other channels your members use. The key is that the content speaks to the needs, emotions, and questions of your members and the new members you are looking to attract. This should speak their language and use the words and tone they use. The content can be educational, such as sharing valuable advice on savings, homeownership, and building a strong credit history, or it can tell stories that will resonate with your ideal member base on a more emotional level, like sharing testimonials or your involvement in the community. A great example is showcasing actual members to show that ‘people like you’ are also members. Of course, keyword rich content is also helpful in boosting search rankings (SEO) and helping relevant prospects find you.
Furthermore, people looking for the right credit union will look for social proof. They are more likely to want to join your credit union if your current members are satisfied with their experience and willingly say so, and members are more likely to feel satisfied with their experience if they feel other members are satisfied too. User generated content like testimonials, reviews and case studies can be very powerful, particularly when the people giving the testimonials look like your potential members.
4. Constantly Customer Experience and Support
Customer Experience must be an obsession for any financial services brand looking to stand out from the crowd. That’s because potential customers often struggle to tell the merits of one financial product from another due to the legalese and fine print, and so can’t easily decide what mortgage or loan is the best for them. But customers can tell the difference between a good and bad customer experience when they experience it. And so evidence of customer experience, as expressed by current and past members in ratings and reviews, online referrals and word of mouth referrals, is a great way to attract new members. And that’s great news for credit unions, because it’s an area where they can hope to excel. That’s often due to their proximity with their members, with local branches in small towns and rural areas that the large banks abandoned long ago, and the fact that staff are often from the same demographic as their customers. So it’s no surprise that credit unions often have high NPS scores, often over 50 out of 100.
Research shows customer experience in financial services is prioritized ahead of things like your rates and fees, and poor customer service is a leading cause of churn; meaning that the more you invest in optimizing the customer experience and improving member support, the more likely you are to keep your existing members. But as well as helping reduce churn, good customer experience can help win back lost members, as only current members can credibly communicate to past members that your customer service has now improved and that you deserve another chance.
Improving customer experience starts with collecting valuable feedback from members through tools like NPS surveys and focus groups to find pain points, so you can address these to create a more smooth experience and strengthen your customer loyalty.
You can also use digital analytics to analyze and improve all steps in a member’s digital journey, from application, checking account details, making payments and accessing support. Ultimately, the goal here is to ensure a smooth, user-friendly and satisfying experience across every customer touchpoint. And that should be whether that’s your website, mobile app, in-branch, in your call centers, or anywhere else your customers and prospective customers engage with you.
5. Create Location Specific Content or Landing Pages
Once you have acted on all the above elements and you have ensured your values align with your members, you show you give back to the communities where your members live, you’ve created meaningful and useful content and you’ve made sure your customer experience is as good as it can be, then you need to communicate all that. This is where your credit union’s digital marketing strategy is important.
You should establish your credit union branding across all digital channels including:
- Blog posts
- Customer testimonials and reviews
- Podcasts and webinars
- Case studies
- Social media posts
- Email newsletters
- How-to guides
- Videos and graphics
- Infographics
- Referral programs
6. Digital-Transformation To Target New Members
Digital-transformation has never been more important, particularly for credit unions. While about 52% of older consumers do their banking on a laptop or tablet, nearly 70% of younger banking customers do theirs on their phone. This comes into sharp focus when you factor in that the average age of a credit union member is reportedly 47 and past prime borrowing age, and 60% of their children are choosing to bank with a different institution. And while it’s important to take care of your core customers; credit unions typically haven’t invested enough in digital transformation to attract new, younger members who will ultimately represent future banking customers.
With an increasing number of consumers doing their banking online, credit unions need to invest in digital-first financial products; from virtual wealth management tools to robo-advisers to real-time loan approvals. And, those same credit unions need to ensure they’re delivering first-class digital experiences, including having a user-friendly mobile app, a sleek website, and offering 24/7 customer support. And while this may be expensive for credit unions to do, it’s also necessary to acquire future customers. But being natively digital is only part of the solution, credit unions also need to direct marketing efforts toward key channels in order to engage these new audiences, including social media, podcasts and webinars, influencer partnerships (yes, financial influencers do exist), the list goes on.
If credit unions don’t offer online products, deliver digital-first experiences and engage with younger consumers on their preferred channels, then they will not factor into their decision-making process and consumers will simply choose to bank elsewhere.
7. Nurture and Reward Members With a Referral Marketing Program
Here’s an important statistic to remember: 88% of consumers trust recommendations from friends and family over all other forms of advertising. This simple fact is why member referral programs are a proven strategy for attracting new credit union members.
Using carefully designed rewards and incentives — whether they’re cash, third-party vouchers or other value-added services — credit unions can drive positive word-of-mouth referrals from existing customers and effectively create brand ambassadors who help market their services and acquire new customers. And the leads those members refer will often resemble their own marketing personas, as people tend to socialize with others who share the same demographics and values, and thus are likely to have an affinity for you and your products and services. The fact that good members can often refer you to other good members is one of the reasons why credit union refer a friend programs can work so well as we explain here.
Particularly given the financial challenges of credit unions’ tight marketing budgets, member-get-member programs typically deliver new members at a fraction of the cost of other traditional marketing channels, including pay-per-click (PPC), paid social media campaigns and video ads. And while research shows that the average cost-per-acquisition (CPA) for banks and credit unions can hover between $350 and $700 per new member, referral programs can cut the average CPA by up to 55%. And that’s before we get into the value that is harder to quantify, although which maybe reflected in future NPS surveys, such as more satisfied, trusting, and loyal members (based on the fact, mentioned above, that good satisfied members are likely to be able to refer other good members who will be more likely to be satisfied and so on…) .
Build a Solid, Loyal Membership With Effective Credit Union Marketing Strategies
The marketing strategies that you employ will define who you target, how you target them, and, ultimately, how that audience perceives you. In the current digital landscape, that means highlighting what makes you uniquely suited to help, distributing engaging content across preferred channels, delivering a stellar customer experience, embracing digital-first solutions, and building and launching a world-class member referral program. What your credit union decides to focus on is up to you, but if any of the above strategies gave you an “Aha” moment, then it might be worth exploring for your credit union.
Buyapowa powers numerous member-get-member programs for credit unions, like Delta Community Credit Union and California Coast Credit Union; and other leading global financial service providers like IG Markets, Vitality and AXA.
So if you’re interested in learning more about the Buyapowa platform and our member-get-member referral programs, don’t hesitate to get in touch; we’re always happy to talk.
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