The only CDs most people buy in December are filled with music and given as gifts, and sales of those are declining.
When it comes to certificates of deposit in December, the picture is definitely not bright; especially these days, when rates are lower than the mercury on a deep mid-winter night.
Does that mean CDs can't be sold successfully? Not at all. In fact, if marketed correctly CDs can be sold like the proverbial ice to Eskimos. And, if CDs can be sold successfully in the dark days of December, they can certainly be sold with even greater success during the rest of the year.
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Let me share a story about how this can work. This past December, a credit union in upstate New York realized they had unspent marketing funds that would be lost if they weren't used by the end of the year. The credit union had $20,000 on hand and while it wasn't burning a hole in anyone's pocket, it seemed like a shame to waste it.
Their plan was to use a combination of demographic targeting and trade area marketing to reach specific customers in their area. I certainly didn't have high expectations for the campaign's performance and neither, I suspect, did the credit union.
Nothing could have prepared any of us for what happened next. Not only did the campaign exceed our already low expectations, but it was a great success by any measure.
The campaign generated $2.3 million in new CD sales. CDs. In December. $2.3 million. Let that sink in for a moment. Then, consider the fact that the total investment was $20,000. This effort to sell CDs, which aren't a great investment these days, in December, which isn't the high season for CDs, returned $115 for every dollar spent. No matter how you look at it, this was an unqualified success.
So what happened? What went right? How did this happen?
I'm not one to look a gift horse in the mouth but the unexpected performance of this program requires some consideration. The most important element of the campaign was the ability to accurately model and reach our target audience.
The credit union was able to provide a very accurate picture of past purchasers of CDs. Because these were current members, the credit union also had their addresses, which was critical.
With physical addresses we were able to identify the attributes of people living in the various neighborhoods where past members lived. The attributes of a neighborhood can be determined using publically available data that doesn't involve any personal information since it is based on an aggregate of the residents.
Once we had our audience attributes in hand, we were able to find other neighborhoods that shared the same characteristics, and these look-alike communities became the targets for our efforts.
From the start, we knew the campaign would be digital, so we had to come up with an approach that would allow us to reach these people online. Traditional online targeting that depends on cookies or other fixed identifiers isn't as accurate or effective as many people imagine. Truth be told, cookies typically only allow you to reach 25% to 30% of a target audience, which is no great shakes.
The CD campaign was able to reach 100% of online targets. It allowed us to do this without compromising anyone's privacy and more effectively than any other approach. Finally, and most importantly, it delivered results far better than anyone dared imagine.
Marty Agius is president of The Marketing Grid. He can be reached at 716-725-3738 or [email protected].
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