Naming Rights Deals Equal Big-Time Branding for Credit Unions
Credit unions have a lot of options when it comes to marketing, but one method seems to be gaining popularity: Naming rights.
As the below chart of a sample of recent transactions shows, naming rights deals involving credit unions are popping up all over the country. And they vary wildly, ranging from as much as $7 million to as little as $500,000.
In their most basic form, these deals typically involve trading cash for the right to rebrand a building, arena or other facility. Though having your credit union's name on the side of the local arena can mean huge exposure, buying naming rights often involves complex, lengthy negotiations with a variety of stakeholders, including local governments – and they can cost millions of dollars. In fact, corporate sponsorships, of which naming rights are a big part, eat up approximately 22% of corporate marketing budgets these days, according to Moery Company, a marketing and consulting firm in Alexandria, Va.
In the sample used for this article alone, at least $23 million worth of naming rights deals were cut with credit unions in just the last nine months or so, one of the most recent being the Tullahoma, Tenn.-based Ascend Federal Credit Union. On April 23, it announced a deal with Live Nation Entertainment for the rights to name a new amphitheater in downtown Nashville. Ascend has $1.7 billion in assets and about 150,000 members.
Though she wouldn't divulge the dollars involved in Ascend's deal, President and CEO Caren Gabriel told CU Times the cost was reasonable considering the amount of brand recognition the credit union would receive.
“When you consider how much it would cost you to promote your credit union on a scale equivalent to concert promotion, the initial sticker shock that might accompany a naming rights opportunity begins to fade,” she explained.
Naming rights involve more than just a sign on a wall, Gabriel also noted.
“We believe the number of impressions – or the ‘bang for our buck’ – will surpass our investment,” she said. “Consider the marketing elements associated with concert promotion: Radio, TV and social media; outdoor billboards; newspaper and other print media; posters and flyers; letterhead and business cards; press releases and publicity; ticket stock and much more. The Ascend brand will be on all of these elements.”
CU Times’ sample only includes arena deals, but not all credit unions are interested in sports venues – they’re also buying naming rights to other facilities. In October, for example, the Asheville, N.C. city council voted to sell the naming rights for an outdoor public space to North Carolina State Employees Credit Union for $1.5 million. And in February, the Colorado Springs, Colo.-based Ent Federal Credit Union signed a 15-year extension of an agreement with the University of Colorado that gives it the naming rights to a performing arts center.
“Don't automatically assume that a naming rights opportunity is too expensive; you won't know until you ask,” Gabriel said. “Simply approach the entity, and see if there's an interest on their part. Then work toward a common ground on the cost.”
Gabriel said her credit union's amphitheater deal will make the Ascend brand synonymous with Music City USA.
“We recognize music as a medium that brings people together,” she said. “Memories will be made here, and we want to be part of that.”