If the marketing call to action for 2011 has been loans, then looking at common challenges through a new lens will be equally important in 2012.
“What hasn’t worked is business as usual strategies. We needed to use fully integrated approaches to [reach] members,” said Paul Stull, senior vice president of strategy and brand at the $1.3 billion Arizona State Credit Union. “Although many are still feeling the recession, others remain in the market for a loan. Letting them know we are lending is a challenge, but when we make that connection, we usually get the loan.”
He added that 2012 looks to be all about loans for the Phoenix-based credit union as well as deepening relationships with existing members and markets.
“Our plan is to continue to improve and communicate our value proposition and reinforce the benefits to individual members and our communities,” Stull said. “Consumers continue to adjust their buying habits and local is a big trend right now. Credit unions are uniquely positioned as local financial institutions and present a great alternative over the ‘too big to fail’ banks.”
Emphasizing local ties has certainly helped the $576 million Red Canoe Credit Union in Longview, Wash.
“We didn’t pare back marketing, recognizing now is the time to be loud and reinforce our brand,” said Amy Davis, vice president of marketing at Red Canoe. “Overall, it’s still a rough economy and here in the Northwest, we have been experiencing higher unemployment rates. So, we’ve had to get more creative and reinvest in the community.”
Increasing the credit union’s community outreach efforts has been paying off, although it is more a marathon than a sprint, she added.
“It’s really painted a good picture of who we are and what we do. The comments from members via social media channels have been that they are proud to be a part of that and how Red Canoe seems different than a bank,” Davis said. “It’s taken 60 years to get there but it’s happening.”
As far as more traditional marketing efforts, the credit union launched a member testimonial campaign earlier this year. Members shared stories of how Red Canoe has helped them.
“People are listening to their neighbors, coworkers, families and friends more than advertising,” said Davis. “It’s one of the campaigns I’m most proud of. Members just came in and did their own radio ads talking about their experience at Red Canoe and how they saved money. Telling their life story, it was genuine, true and hit home.”
Davis said the advertisements have a hometown feel.
“The radio spots sound like the guy down the street not some actor, and the members loved seeing themselves in the paper all over town,” she offered. “It’s been one of the ways we’ve helped build awareness that we’re very connected, friendly, down-to-earth. Members sharing their own story is more powerful than any marketing we could’ve done.”
Red Canoe has also taken the opportunity to deepen its community roots even more. To generate foot traffic at its new branch in a small town of about 3,000 people, rather than do the standard offer of refreshments at its grand opening, it partnered with the school district, the town’s largest employer.
Davis said the deal was simple: Red Canoe would donate $5 for every person the school could get to the branch on opening day and sign a banner to put toward a community garden the school wanted. Local businesses heard about the challenge and they, too, posted signs and talked up the event at the branch
“We had a budget so we had to cap it at $2,500 but I was thinking if we got 500 people, I’d be floored. Really, we were shooting for 100. Well over 1,000 people came,” said Davis.
Teachers and students got word of the promotion and started spreading the message, she recalled.
“Those who signed the banner also got a coupon for 1% off their auto refinance and quite a few came back into the branch to take advantage of it,” Davis said.
When a local library was moved to a mall, Red Canoe was there to create a reading room for the children. Before moving to the retail space, Davis said the library was in a very old building with only two parking spots so everyone had to cross a very busy street, which was quite dangerous.
“The mall was struggling, the library needed to relocate so it was a win-win for all, but it was a huge space and rather stark. We wanted to make this a huge opportunity for the library and the credit union.”
The library was in a huge mall front with large windows so shoppers could see into the entire library. To highlight the open space, Davis hired an artist to design a 13 by 15-foot mural of an enchanted forest scene with storybook characters, animals, and a river running through the landscape. In the middle of the river, is a bookshelf in the shape of a canoe, which has been used to feature the book of the month.
To help furnish the library, the credit union donated tables and leather chairs leftover from a branch remodel. The project’s total cost of $4,000 included a five-year marketing agreement for mall advertisement, kid-sized furniture, more than100 new books, book bags and balloons for the reading room’s grand opening.
“Over 230 people attended the grand opening event and it’s been so rewarding. Kids that come to the mall beg their parents to go to the library,” said Davis. “So it’s opportunities like that, where our brand is infused in the community in a way that’s more engaging and beneficial for everyone [that] we’re going to continue looking for.”
Improving that member stickiness has also been a priority at the $155 million Spectrum Federal Credit Union in San Francisco.
“In 2011, loan growth and member churn continue to be our challenge,” said Brian Burns, marketing specialist at Spectrum FCU. “Our principal [select employee group] is Bechtel, so the typical new member who comes in that way is already a pretty senior person in their field, which means that they're already in an older age demographic. Replacing them is a constant challenge.”
Bechtel Corp. is a San Francisco-based global engineering, construction and project management firm with 52,700 employees worldwide.
Burns said the credit union has a diverse field of membership. In addition to its other SEGs, which tend to be high-end professionals, employees with Charles Schwab, larger local medical practices and those in underserved communities in San Francisco and Maryland are also members.
“As a result, our membership spans those served by San Francisco's Treasure Island Homeless Development Initiative all the way up to a few Bechtel executives who receive seven-figure bonuses a couple times a year,” Burns said. “Finding products and messages that meet such a variety of needs is always a challenge.”
Like some of its peers, Spectrum has taken a fresh look at existing relationships for new opportunities and had success with its Spectrum Partners campaign.
“We've had relationships with a number of third-party vendors, everything from Mass Mutual Financial Planning to VPI Pet Insurance, but had never really created a focus on those revenue opportunities as a whole,” said Burns. “We gave the Spectrum Partners their own page at the website and created handouts that made it quick and easy for members to appreciate the scope of what we have available for them, and the benefits.”
He said the new focus has resulted in all the products performing at above average rates including GAP and mechanical breakdown insurance.
“It’s interesting that both GAP Insurance and MBI have led the way,” Burns said. “These are products that were always natural add-ons to car loans, but simply increasing the frontline staff's awareness and knowledge of them has paid off with increased sales.”
Looking ahead, Spectrum will focus on innovation in electronic delivery via the web, social networking and mobile banking, Burns said, adding that he sees rewards as an area that will only continue to grow, and one where ideas can often be implemented at a reasonable cost.
“Hard times are here, they're not going away any time soon, and we're going to have to constantly be trying to get greater productivity out of all our resources, personnel and otherwise,” said Burns. “I fear that the attitude of ‘credit unions care and the big banks don't’ too often reflects a complacency that's getting more difficult to justify every day, particularly at the customer level. While it’s true that our patrons are technically ‘members,’ that mindset can be a trap; no matter what we call them, they behave as ‘customers’ and we need to be winning their business over and over again, just like any for-profit financial institution does.”
Amy McGraw, vice president of marketing at Miramar, Fla.-based Tropical Financial Credit Union, agreed. Plans for 2012 include the ideas of Web 3.0 and predictive marketing.
“I’m keeping a careful eye on it and plan to incorporate it as much as I can. Basically, it’s marketing in the moment so to speak,” said McGraw. “For instance, one of my first projects that I’m taking on here is updating our website; not just because it’s outdated, but also to make sure it is optimized for the ‘semantics’ web.
McGraw said the credit union needs to be sure that it structures its messages online via the web or social media to allow people or machines to find and follow content based on relevance.
“One thing that social media has taught me is that people are looking to their peers more than ever for buying decisions, and with connections to their peers at their fingertips,” McGraw said, adding “quite literally, with Smartphones these peer testimonials will be even more important. Harnessing testimonials communicated on the platforms where people are congregating is the area I’m looking into in 2012.”
Upon joining Tropical Financial, McGraw’s first goal was to find a voice that the community could relate to. She met with several popular radio stations and asked for only one thing – a demo from morning personalities.
“But I didn’t give them a script, I asked them to talk about what they knew about credit unions. There was only one that came across as more testimonial than script reading – Kenny Walker from WKIS-FM in Miami.
McGraw said Walker now does live reads every weekday morning and all of Tropical Financial’s prerecorded ads for the station. In addition, he opened an account and when he does his live reads they come across as first person testimonials. McGraw even did a short video that airs on both the radio and the credit union’s websites.
“The great thing about Kenny is that not only is he a DJ, but he is also the stadium voice for the Miami Dolphins so he is a trusted personality in the South Florida market.”
In her market, McGraw said 2012’s challenges will continue to be a lack of consumer confidence, unemployment, suppressed loan demand, and a poor housing market.
“The only silver lining I see is that the loan demand has been pretty flat for several years and I think we’re going to start seeing an uptick as people who have suppressed their need for loans start loosening up,” said McGraw. “I don’t think it will be huge, but it will be important that we stay in front of the consumer as the better value for those loans when they are ready to start borrowing again.”