Transcript NCUA Successful CU Marketing - Cornerstone Credit Union League

Credit Union Marketing
by the Numbers
Presented by
Office of Small
Credit Union Initiatives
Getting Perspective …
Five “P”s of
Marketing
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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/partnership
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Promotion
• Creative Concept
• Collateral Materials
• Advertising Outlets
• Internal Training
• External Training
Planning Process
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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
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Age
Where they reside
Income Level
Gender
Where to find helpful
information
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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
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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 Budget
Illustration: 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 Budget
Illustration: 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
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Newsletter
Website
Posters/Banners
Direct Mail – 3 versions
Specialty Publications
Radio
Cable
Newsletter
Mailed to all members
Direct Mail
Mailed to
10,000 homes
within five
miles of
credit union
Website
Use 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?