Defy The Trends a Credit Union Webinar


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This webinar describes how several Credit Unions have shown best practices while implementing successful marketing strategies in difficult economic times. It discusses the various elements of a comprehensive, successful marketing plan.

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  • The legislative environment will continue to have a significant impact upon the credit unionsystem and the NCUA. Congress’s enactment of new laws continues to place increasing focuson anti-terrorism monitoring activities, compliance, privacy/data security and corporategovernance issues. These new regulatory requirements will continue to expand the burden onindividual credit union operationsProtecting the privacy of consumerinformation is another challenge that has and will continue to receive increased emphasislegislatively because of financial modernization and technological developments. This willrequire the credit union system to find the appropriate balance between information sharing fornormal business purposes and the need to protect individual privacy.
  • Amount to recruit has grown as those converted to community charters use mass media to create awareness and expand their audience. This is especially important if your credit union has converted to a community charter. You certainly have a larger pool. SEG Cus can reach out to a single sponsors or multiple SEG relationships.
  • 67 pages of Google Hits when Credit Union Connecticut was googled. 16 – 30% of consumers change brands based on one night of watching commercials.
  • 266 credit unions closed in 2007.Failed Banks and Credit Unions, 2009Interactive Map: See Exactly Where Institutions Have Closed or Been Acquired September 21, 2009 - Linda McGlasson, Managing Editor8% of credit unions, or roughly 800 have sub-prime exposure, carrying a total of $18 billion in exotic mortgages on their books.
  • Total US Ad Spend in $300 Billion
  • Defy The Trends a Credit Union Webinar

    1. 1. DEFY THE TRENDS<br />A Webinar for Credit Union Professionals<br />
    2. 2. Today’s Speakers<br /> Kate Dunn<br />President, Digital Innovations Group<br />Business Strategy Chair, PODi Apps Forum 2008 - 2010<br />Board Member Digital Imaging Customer Exchange<br />Faculty, University of Richmond Robins School of Business, Executive Education<br />Review<br />John Franco<br /><ul><li>Executive Vice President, Arga Marketing
    3. 3. Former Chairman and CEO of Harbor National Bank of Connecticut</li></li></ul><li>Marketing budgets have been reduced:<br /> Added cost of regulation<br /> NCUA assessment<br /> Corporate credit union bailout<br />Defying the Trends & Seizing the Opportunity<br />
    4. 4. Need to do more with less<br />Targeted relevant marketing<br /> Cross sell income producing products/services<br />Bring in new members<br />Today’s Credit Union Trends<br />
    5. 5. Recruitment of Members – Challenges:<br /> Where to find them<br /> How to reach them<br /> What to tell them to make them respond<br />Today’s Credit Union Trends<br />
    6. 6. Should social media be integrated into the mix to improve results<br />How can social media help us reach our business objectives<br />Big Question<br />
    7. 7. Where do I get the most bang for my buck?<br /> Low hanging fruit<br /> Specifically target most likely candidates<br /> Get very granular<br /> Significantly reduces production cost<br /> Greatest chance to maximize R.O.I. <br />How is your credit union chartered?<br />
    8. 8. What can you tell them that will work?<br /> Value proposition<br /> WIIFM <br /> Share profits – Treat you like an owner<br /> Safe, Sound & Secure<br />Messaging<br />
    9. 9. What do I sell first?<br />Does it vary by segment?<br />Can I reduce my cross selling expenses?<br />Can I reduce customer attrition?<br />Next Best Product<br />
    10. 10. Credit Union Challenges<br />Uncertainty in national and global markets influences credit unions<br />Increased legislation, data security stretch internal resources<br />Almost certain budgetary sacrifices as a result of re-capitalization of NCUSIF<br />Membership which grew through July 2009 will stagnate during rest of year<br />40% of credit union members classify themselves only as “moderately loyal”<br />Wave of job loses make it harder for members to stay current on loans<br />
    11. 11. Credit Union Challenges<br />Annual loan growth fell to 3.5% through July 2009; will remain sluggish<br />Increased cost to recruit net, new members<br />As of 2008 the amount stood at $467<br />Increasing rapidly for those with community charters <br />Failure to grow relationships following ‘best rate’ offers increases marketing costs<br />Minimal differentiation in eyes of potential members<br />
    12. 12. Challenges<br />Communication clutter<br />Typical American is exposed to 5,000 marketing messages a day<br />notice 52<br />remember only 4<br />Four or five generations in play<br />Varied levels of comfort and cynicism with technology, advertising<br />Voluminous amount of information<br />Personal and professional duty overload<br />Loss of personal wealth/employment<br />Anxious and fearful of future<br />
    13. 13. Implications<br />Failure to cut through the clutter increases marketing expenses<br />Failure to capture additional opportunity from existing members increases marketing expenses<br />Ultimate implication is failure of the institution<br />YTD Decline in number of Credit Unions of 110<br />On pace for 252 closings in 2009<br />
    14. 14. Sacrificing the Long Term for the Short Term<br />Only 15% of short term sales are the result of marketing, but today’s marketing initiatives are responsible for 85% of long term sales.<br />Source: What Sticks: Why Most Advertising Fails and How to Guarantee Yours Succeeds, by Rex Briggs, Greg Stuart<br />
    15. 15. Really Good News<br />“19% of advertising fails outright and 67% could achieve significant improvement that would require no additional spending.”<br />What to tweak:<br />Messaging – better understanding of customer’s motivations<br />Marketing Mix – VeriSign found that 10% of spend drove 98% of actions they wanted<br />Qualification - 80% of all deals are lost due to a in adequate or non-existent qualification process.<br />ES Research Group Study<br />
    16. 16. In Short<br />Must capture the loan opportunity that exists today<br />Cost effectively<br />Efficiently<br />Focus on member loyalty will pay off<br />Strengthen relationships with on-line banking, broader product participation, loyalty and referral initiatives<br />Improve resource utilization with automation, tracking and decision support<br />Improve marketing ROI<br />
    17. 17. Case One: Wallingford Municipal Federal Credit Union<br />Business Problem<br />Low response and conversion rates on new loan offers from statement stuffers and traditional direct mail<br />Solution<br />Personalized direct mail campaign to existing members promoting car loans with attractive rates<br />
    18. 18. Targeted, Simple Personalization with Succinct Messaging<br />Best Practice: Simple offer and call to action “Save Money” & “Get Pre-Approved First!”<br />First Name<br />Personalization<br />
    19. 19. Results<br />Achieved highest monthly loan activity in history of the credit union<br />Exceeded annual loan target after only four months using the program<br />Extended program to other initiatives<br />
    20. 20. Case Two: On-Line Banking<br />Business Problem<br />Low on-line banking participation increased cross selling costs and contributed to member attrition<br />Solution<br />Use best practices developed in loan campaign to convert members to on-line banking<br />
    21. 21. Targeted, Simple Personalization and Succinct Messaging<br />Best Practice: Simple offer and call to action “free On-Line Service” & “Call for an application”<br />First Name Personalization<br />
    22. 22. Results<br />17% of membership signed up for on-line banking within six weeks<br />
    23. 23. Effective Targeting<br />Custom personalization using gendering, age or other demographic information<br />Consider appending data if required<br />Compelling Imagery and Text<br />Keep it Simple<br />Zero in on WIIFM<br />Clear Call to Action<br />Best Practices<br />
    24. 24. Why Direct Mail Works<br />Add more cost impacting ROI<br />Source: Vertis Communications&apos; Customer Focus® survey <br />
    25. 25. It’s the Relevance that Counts<br /><ul><li>Relevance is the single largest lever on response in individualized direct marketing </li></ul>Jupiter research reports:<br /><ul><li>Relevancy improves campaign revenues by 9 times over untargeted broadcast mailings
    26. 26. Revenues are improved by an average of 18 times with relevance</li></ul>Relevant<br />Over 3x higher<br />Personalized<br />
    27. 27. 2007 Vertis Communications Customer Focus® <br />85 percent of women ages 25-44 read printed direct mail marketing pieces<br />53 percent of all women ages 25-44 surveyed who have access to e-mail, read e-mail advertisements<br />63 percent of all adults indicated the have responded to direct mail collateral offering a percentage discount <br />Women make more than 80% of all consumer purchasing decisions<br />Source: Source: Mindshare/Ogilvy & Mather<br />
    28. 28. Case Two: Alerus Financial <br />Business Problem<br />Declining credit consolidation loan applications<br />Low return from static mailings<br />Solution<br />Test the use of a personalized and relevant cross channel campaign against static mailings<br />Age Groups:<br />25 – 35<br />36 – 45<br />46 - 55<br />
    29. 29. Multiple Channels: Direct Mail, Email and Personalized Landing Pages<br />Step One: Direct Mail<br />Personalized<br />Personalized Response Mechanism<br />Provides Tracking<br />Relevant Copy & Images for each age group<br />
    30. 30. Relevance continued<br />Messaging Real Estate Expanded<br />Minimizing cost of mailing<br />Interactive conversation with prospect<br />Questions capture additional information<br />Thank you structure used to nurture interest<br />Step Two: Personalized Landing Page<br />
    31. 31. 3.67% responded to multi-channel version of campaign<br />60% of applicants were new to the institution<br />Response Rates by segment for multi-channel<br />25 – 35 3.98%<br />36 – 45 3.23%<br />46 – 55 2.64%<br />Response rate from static mailer &lt; 1%<br />Results<br />Highest ROI<br />
    32. 32. The Power of Multiple Channels<br />Researchers estimate that 25%-30% of total media time is spent multitasking, and that the more media a person Consumes, the more likely they will consume several channels at once<br />Seeing a message in more than two channels increases response by 10% to 15%.<br />Sources: eMarketer Multi-tasking Consumers January 2007; DMA Study<br />
    33. 33. Why Personalized Landing Pages?<br />46% of Americans prefer to respond to direct mail on-line.<br />PURLs:<br />increase response by up to 400%<br />provide automated response tracking<br />provide interactive communication with prospect<br />automate integration with sales channels<br />Campaign changes are affordable<br />Electronic messaging real estate is cheaper than print.<br />Source: DMA Study<br />
    34. 34. Why Email as a Channel<br />60% of business decision makers with access to the Internet prefer email as the method to receive marketing messages.<br />Links included in emails facilitate response<br />50% of those receiving permission based e-mail say they are more likely to buy products from the sender in the future regardless of the channel<br />Source: Jupiter Research and Indivia, Epsilon<br />
    35. 35. Why Social Media?<br />1/3 of all American have profiles on social networking sites<br />The average LinkedIn user is 40 years old<br />Most Twitter users are now 35 and older<br />People from 35 to 54 now represent the biggest group of users on Facebook.<br />LinkedIn - business-only has 43 million members in more than 200 countries<br />Sources: LinkedIn: Connecting with Success and Timothy J. Wood, Montgomery County Group Leader of Business Development at
OBA Bank, contributed to this article<br />
    36. 36. Why Social Media?<br />Affluent working women with family incomes of $75,000 or more are growing in number<br />94.3 percent access the Internet during an average month<br />About half are considered heavy users of the Internet.<br />Heavy use of radio, television, newspapers and direct mail has declined<br />Women make more than 80% of all consumer purchasing decisions<br />Sources: comScore, May 2009, BMS Media, January 2009 survey, Mindshare/Ogilvy & Mather<br />
    37. 37. Why Social Media?<br />US Population<br />18% create content<br />25% critique content<br />12% collect information posted by others<br />25% joiner on-line communities<br />48% are considered spectators<br />44% are currently inactive<br />Source: Groundswell by Charlene Li and Josh Bernoff <br />
    38. 38. The Future of Social Networking<br />People from 35 to 54 now represent the biggest group of users on Facebook<br />99% of Gen Y have one or more active profiles on social networks such as Facebook or MySpace<br />Source: strategy Labs; PMN together with the Interactive and Direct Marketing lab at Pace University’s Lubin School of Business, May<br />
    39. 39. Examples of Social Media Integration<br />First Tech Credit Union, Portland, OR<br />Internal social network helped create a sense of community<br />Striving for more committed and engaged employees who will carry that to customer interactions<br />
    40. 40. Examples of Social Media Integration<br />Verity Credit Union, Seattle, WA<br />Internal social network for employees<br />Allows employees to tap into institutional knowledge for handling customer service issues<br />Advantage Federal Credit Union, Newport News, VA<br />Internal social network includes CEO blog and employee home pages, Wikis for sharing of institutional information<br />
    41. 41. Case One: Tinker Federal Credit Union<br />Business Problem<br />Low enrollment of Gen Y customers<br />Business Solution<br />Created a multi-channel campaign “Buck the Norm” as a rallying cry for young people to get over what everyone else was doing and to get smart with their money. <br />
    42. 42. Solution Components<br />New web site relevant to Gen Y audience<br />Video Scholarship Contest for Engagement<br />Ringtone, Wallpaper, Buddy Icon downloads<br />TV and Direct Mail Marketing<br />Reinforce with social media using Facebook, IM, Twitter, online voting, local bands music players, and contests<br />“Save the Buck” promotional cards given out at college hangouts and coffee shops that would cover their bill<br />Attendance in community events geared toward young adults<br />
    43. 43. Multiple Channels: Direct Mail, Web Site, TV, Video, Social Media<br />
    44. 44. Results<br />35,000 web site visitors<br />Average of almost 4 pages viewed per visit<br />‘Buck the Norm’ video on YouTube viewed by almost 1,500 people<br />Facebook event page for the scholarship contest visited over 3,000 times<br />
    45. 45. 5,000 Member Credit Union in Northeastern US<br />Business Problem<br />Statements which were labor intensive, inflexible, and prone to quality errors<br />Call center activity disproportionately high due to errors and the confusing statement<br />Business Solution<br />Redesign of statement with highlight color to improve readability and incorporate cross channel tracking in promotional messaging <br />
    46. 46. Solution Components<br />Highlight color statement<br />Targeted promotional messaging based on member’s existing relationship<br />Reinforcement from social media using blogs, facebook page and tweets<br />
    47. 47. Results<br />30% of customer base converted to e-electronic statements saving the credit union $30 per member<br />Approximately $45,000 per year initially<br />18% of members are following credit union’s tweets<br />Estimated reduction in other marketing expenses of $30,000 per year<br />
    48. 48. Review<br />New technologies exist to improve the efficiency and effectiveness of marketing efforts<br />67% of what you are currently spending could generate better results by modifying the tactics<br />19% of what you do fails outright<br />Opportunity exists to capture opportunity without increasing spend<br />
    49. 49. Combine direct mail or statements with targeted messaging relevant to the member<br />Reinforce direct or statement marketing with email<br />Use links to relevant services to track changes in behavior<br />Reinforce strategy and social media presence<br />Encourage members to share reasons for their satisfaction turning them into ‘promoters’<br />Email and landing page tracking allows you to capture and integrate best practices quickly for maximum ROI<br />Review<br />
    50. 50. Review your current member data<br />% of emails and current baseline deliverability statistics<br />Opens<br />Bounces (hard and soft)<br />Click Throughs<br />Develop a fun way to capture emails from members<br />Determine best segments given current economic climate<br />Start thinking about right social media to use<br />Community<br />Blog<br />Etc.<br />Read Groundswell by Charlene Li and Josh Bernoff<br />First Steps<br />
    51. 51. You’ll receive a survey following the webinar, once you complete it you will be sent a copy of today’s presentation and a link to download a white paper called Defying the Trends, Grow Revenues in 2010<br />Questions?<br />
    52. 52. Thank You!<br />