Credit Union Marketing by the Numbers Presented by Office of Small Credit Union Initiatives
Feb 25, 2016
Credit Union Marketing by the Numbers
Presented byOffice of Small
Credit Union Initiatives
Getting Perspective …
Five “P”s of Marketing
• Philosophy• Product• Pricing• Placement• Promotion
Philosophy• Structure – Cooperative, Not-for-Profit, Volunteer Board
• Original Field of Membership vs. Current FOM
• Mission• Vision
Product
• Research Consumer Needs
• Features• Benefits
Pricing
• Research Competitor’s Pricing
• Cost Analysis• Breakeven
Placement/Delivery
• Face-to-face• Internet• Phone• Third-party providers/partnerships
Promotion
• Creative Concept• Collateral Materials
• Advertising Outlets
• Internal Training• External Training
Planning Process• Identify your uniqueness
• Develop your story• Define your audience• Develop your Marketing Plan
• Create materials• Train your employees & volunteers
• Implement plan
Identify your uniqueness
• Structure• Core values• Community involvement
• Products & Services• Mission
Define your Market• Age• Where they reside• Income Level• Gender
Where to find helpful information
• NCUA – www.ncua.gov • Local NCUA Examiner• In-house Data System• MCIF System• Survey • U. S. Census – www.2010census.gov
• Industry Publications• Local Chamber or Development Corporation
Create a Marketing Plan
• Be Specific• Clearly State Goals• Develop your marketing mix
• Include a reasonable budget
• Include Communication Schedule
Key Marketing Information• Average New Car Loan Amount• Average Used Car Loan Amount
• Average Savings per member• Contribution to gross income per member
Key Marketing Information
• Service/product Penetration
• Average Home Equity Loan
• Average Checking Deposit Amount
• Market penetration
Member Recruitment Costs• New Member - $75-$150
• Existing Member - $20
Another Effective Budgeting Formula
Illustration: Need to increase membership by 200 new accounts.
Develop budget: Recruitment Cost - $125 x 200 = $25,000
New Member Recruiting BudgetIllustration: Need to increase membership by 200 new accounts.
Develop budget: Average new member contribution to gross income - $269 x 200 = $53,800
Proposed budget: $53,800÷3 = $17,933
Developing a Loan Promotion BudgetIllustration: Need to increase new cars by $2 million
Size of target audience: Divide $2 million by Average New Car Loan Amount of $14,767 = 136 loans
Response Rate: 2%Number of Mail pieces: 6,800
Potential Impact to Net Income - Formula
Projected Loan Generation (Goal $) x Blended Loan Yield (Average Loan Yield – Average Investment Yield) = Increase to Net Income
Increase to Net Income ÷ Projected Campaign Costs = Contribution to Net Income per Marketing Dollar Spent
Potential Impact to Net Income – Example$2 million in new car loans x 4.37% net
spread (.0437) = $87,400 annualized income
$87,400 annualized income ÷ $29,100
total campaign expenses = Earn $3 for every marketing dollar spent
Create Materials• Uniformed/Similar look – Branding is very important
• Easy to read• Simple & concise message
Implement Plan• Create Advertising Schedule
• Staff Training• Watch deadlines• Monitor Progress
Evaluate Plan
• Use gross numbers, not net numbers
• Identify what worked & what didn’t
• Consider Buying Cycle
Sample Campaign• Newsletter• Website• Posters/Banners• Direct Mail – 3 versions
• Specialty Publications
• Radio• Cable
NewsletterMailed to all members
Direct Mail Mailed to 10,000 homes
within five miles of credit union
WebsiteUse a consistent message
Specialty Publications
• Weekly Newspapers
• Business Journal
Sample Campaign Mix $42,500 total budget• 28% in Direct Mail• 20% in Radio• 16% in Cable• 21% in Weekly Papers• 7% in Business Journal• 5% in Newsletters• 3% in Giveaways/Poster/Banners
Results from Sample Campaign
• 344 new members• 24% Increase in Car Loans
• 21% Increase in Home Equity
• 30% Increase in CDs Shares
• 5% Growth in Income
Marketing Myths
• Cute campaign them cannot mask a poorly designed or priced product
• Campaign must appeal to target demographic – Remember this Dr. Pepper Ad?
Marketing Truths
• Promotional component is least important of the 5 “Ps”
• Informed planning will yield the greatest return.
Understanding “Knowable” • Buying Cycles – watch large retailers for clues
• Ratios, data & general demographic information
Understanding “Unknowable” • Humans are controlled by emotion & life experience
• Unexpected Society Events
In Closing
• Opportunity abounds
• Consumers are looking for alternatives
• Be bold
Questions?