A successful marketing strategy means defining goals, using data wisely and giving members the starring role.
Digital has magnified the marketer’s playground, providing both new tools and new channels for reaching audiences. Despite the innovation, there remains a constant: Marketing abhors a vacuum. “The truth is, if you’re not occupying at least some of the space in your market, it’s guaranteed someone else will,” says Terrill Herbig, president of The BA Group, a credit union marketing firm based in Northfield, Minnesota. “Big banks, community banks and fintechs all are occupying the space of current and potential members, and the competition is only going to get stiffer.”
Currently, the financial services sector accounts for 12% of digital ad spending, or around $15.65 billion, according to a 2019 report by eMarketer. “This investment makes it critical for credit unions to find their digital focus, one that not only embraces their brand but helps to define and support overarching goals and communicate relevant messages with target audiences,” says Herbig. “Without a share of the digital pie, it’s difficult for credit unions to elevate their brand, let alone give back to members.”
Achieving digital focus will also help a credit union to sharpen its goals and service objectives. These can vary by credit union and segment—for example, brand affinity, product adoption or enhanced relationships. But it requires understanding the tools available and differentiating between the strategic and tactical processes, stresses Herbig. “Strategic activities will define your goals over time as well as the key, measurable objectives to achieve them. Tactical actions, however, are task-related and will provide guidelines on how to best use specific channels and resources, based on their respective strengths.
“Once goals are set, evaluate the digital tools and tactics available—and ensure the tools you’re using are the right ones,” he advises.
There are countless digital channels, and it’s tempting to want to be part of them all, so be sure to hone strategic goals at both the business and campaign levels, and then align goals with the desired channels to effectively reach the intended audience. “This requires the same level of strategic thought and planning as other aspects of the marketing plan,” says Herbig. “For example, a well-thought-out marketing plan wouldn’t be thrown together on assumptions and ‘this sounds good’ theories. Creating a digital media plan should be approached in the same manner.
“Realize, too, the limits of digital as it pertains to your objectives and target audience,” he adds. “Don’t rely on digital as only a ‘tactic’ to deliver a message; it’s deceptive to assume that simply … boosting Facebook ads, running a Google Ads campaign or splashing some mobile display ads is enough for sustained awareness or growth.” Financial institutions should also use caution if considering a digital-only approach, notes Karen McGaughey, VP/client services/principal for CUES Supplier member Strum Agency, Seattle. “Digital may provide too narrow of a focus to achieve strategic objectives alone (i.e., brand awareness, product adoption, deeper member relationships, enhanced onboarding, etc.)—and to be effective, a digital marketing strategy needs to be integrated and shared across many channels to support the overarching goals of the credit union.”
When making decisions about digital, be selective, stresses Jim Pond, partner at James & Matthew, Boston, a digital advertising agency. “Consider not only what you do well, but what you should be doing well. This might include pulling back to only one social media platform or ditching a website blogging effort that is not yielding quality traffic. Also, consider that only 3% of users on Facebook will see posts organically, so if you’re not putting ad dollars behind your Facebook posts, you shouldn’t be on it.”
Let’s face it—most people (247 million in the U.S., according to Statista) are on social media, making it an obvious area of focus. But still, select your channels wisely, says Pond, and don’t target members only by age. “That’s antiquated, based on old TV and radio ad models. Instead, tap into Google Analytics. It offers excellent behavior data on your audiences, so you can monitor who is coming to your website and what they are doing. Aligning with the right channels will let you be authentic to your brand.”
While it is important to be strategic about your channel choices, it can be easy to become dependent on a select few, Herbig warns. Too often, marketers lead with the tools they have or are comfortable with—regardless of whether they are the right instruments for the task.
“And it’s easy to be impressed, distracted, even biased by the array of digital innovation and tactics available,” he says. “We often see this with in-house marketing departments or vendors where an individual has specialized in a specific channel. While he or she may be adept in that area, it may be at the expense of other necessary supporting channels.”
Budget & Mindset
Credit unions, like all industries, have been thrust into an evolutionary state of mind, and modern marketing has become increasingly complex. “Tools requiring more expertise and specialization continue to escalate, and the challenge is compounded when operating budgets don’t keep pace to meet digital demands,”
McGaughey explains. “Marketing teams everywhere are struggling to build the right infrastructure, to make the most informed and strategic decisions, and [to] embrace this rapidly changing ecosystem.”
It’s natural to see the budget for digital leaping, with some credit unions allocating as much as 60-70% of the total marketing budget to it, says Pond. At a minimum, he advises assigning 10-30% of marketing dollars to digital channels. “However, this requires that credit unions understand their brand well enough to align with the appropriate channels. For example, you do not want to invest heavily in Instagram or YouTube if you do not have the photography or videography talent in place to support it. Contributing low-quality content is never a good idea.”
Undoubtedly, budget is a driver of digital strategy, “and it dictates what you can access and the resources you acquire,” continues Pond. “It also demands that you have the right software with the right people running that software. Otherwise, it’s like buying a high-end car with no one to drive it. No software is plug and play; any solution takes people, talent and training to execute properly. Vendors tend to undersell the effort it takes to engage with the software after implementation, so understand what using the software will look like 12 to 24 months out.”
“Data is a beautiful thing—if you have smart people making decisions about your data,” submits Pond. Used wisely, it can enhance a credit union’s digital focus. “But without the wisdom, data can feel useless—or worse, become a crutch, which leads to less risk-taking and potentially poor outcomes.”
Remember, marketers are in the business of moving hearts and minds, says Pond. “So, if you’re only trying to move minds with data … and solely relying on the behaviors reflected in your data, messages become uniform and stale, and you lose the human aspect and the opportunity to create brand awareness.”
An individual can get a loan from anyone, he adds. “Your member will choose you, not because of the data collected, but because you connected with them from that data. Data and numbers are just money, and without heart, the connection is lost.”
Segments Versus Personas
Shrewd data can also help marketers identify key segments—who to reach and why—for more effective communication. “These insights can reveal critical perceptions or pain points at the individual level, such as financially triggered events, hobbies, interests, brand preferences and media consumption,” explains McGaughey. “They empower us to connect more closely and in more meaningful ways with our target audiences. Essentially, the consumer wants to know what you stand for—not just what you sell—and … how you can uniquely help them.
“Identifying and defining segments and personas enable you to connect with consumers in relevant, helpful ways and provide value even before they become a member,” she adds.Understanding differences between segments and personas can sharpen a credit union’s digital focus. “While there is some cross-over (i.e., shared data insights), the two are not interchangeable,” McGaughey notes. “Personas humanize the data with storytelling and take a holistic view as if they were real people. This makes personas relatable and easily understood at all levels of the organization—and they empower staff with actionable data to help manage, track and build personalized experiences.” In short, segments plus the humanization of data equal personas.
Personas reflect distinctive new member growth and member retention groups. “These are identified from segment penetration, growth opportunities, product and service usage, applied profitability models, financial habits and triggers, channel usage, and psychographic insights such as lifestyle, life stage, media consumption and brand preferences,” says McGaughey.
“People can’t empathize with data, but they can understand people,” she continues. “With proper integration, credit unions can … leverage their member data and use it to build higher impact strategies—such as greater personalization, enabling the brand experience and service delivery to resonate with members fiercely.”
Successfully defining segments and personas will also benefit a credit union’s digital relevance and presence—and place the member at the center of decisions and strategy. This can include product and service solutions, finely tuned targeting, efficient media spend and allocation, and member acquisition and retention.
“Remember, fact-finding journeys, such as comparison shopping, usually begin on a digital platform,” says McGaughey. “Being digitally present—ready to share the relevant aspects of your brand story to specific segments at all stages of the purchasing funnel—will lead to more conversions and happier members.”
Approaches will vary by segment, and no single approach will have the same appeal. The right approach requires using data-driven insights derived from consumer behavior (i.e., channel usage, product adoption, propensity to buy and brand preferences) to tailor relevant messages and create valued experiences not ignored by the consumer, says McGaughey. “For example, imagine you’re a new parent filled with equal amounts of joy and fear. Then a financial institution reaches you with a message congratulating you on your growing family while sharing the reality that in 18 years, college will cost an average of $180k. The message highlights the importance of saving now, plus an offer for a special incentive. Here, having a baby triggered a financial need, and the financial institution personalized the message with a relevant solution.”
Filling the Knowledge Gap
“There’s often a knowledge gap of what an organization’s digital focus should be and what it actually is,” reflects James Robert Lay, founder and president of Digital Growth Institute, Houston. “Ultimately, it should feature a set of systems and processes designed around the modern consumer journey that generates, nurtures and converts leads for loans and deposits, where each step is seamless.”
Lay adds that the member experience is nothing more than activities developed over time to create either a positive or negative emotion, defined in the eye of the beholder. “But without understanding what your digital focus is, credit unions can get stuck in the tactics (i.e., sending emails or placing ads that push commoditized products) without accomplishing what they need for a positive member experience.”
He suggests dividing the concept of member experience into two categories, digital and human. Subsets of the digital experience include: 1) the lead experience; 2) the member experience; and 3) the referral experience.
“We hear a lot about the member experience, but what good is that if the lead or referral experience is not good? To prevent a failure at any point, a credit union must activate the right digital channel and deploy leads and referrals accordingly for an excellent experience,” says Lay.
Filling this knowledge gap also gets to the core of what people want, the key components of the human experience: help and hope, Lay reflects. “This goes beyond the commodities of banking and money—and for financial institutions, it can mean providing a financial coach. Here, digital can help deliver the human experience and get folks on the road to a better life, to benefit from the results of what money can secure.
“Financial products are boring, but the result of managing money right is not,” he continues. “There is so much emotion tied to money. Let digital lead your members to a better financial life and give hope for a better future.”
Lay notes that 97% of consumers do not have financial goals for 2020 and beyond. “Help your members be healthy, wealthy and happy. Instead of centering content on products, showcase success. Use defined personas to guide members beyond their present state to a desired future state, which may be homeownership, getting out of debt or saving for retirement. Have them start with smaller, more attainable goals—like saving $100 in 30 days—then create momentum toward bigger goals. Assess their situation, learn and be aware of opportunities, create emotion, and define a purpose that transcends financial products through a vision rooted in their needs.
“Today, 81% of consumers start their buying journey online,” adds Lay. “As credit unions, we need to mesh the digital and human experience to connect with these people.”
Finally, marketers should become educators and help colleagues become financial coaches—digitally, in branches and everywhere, concludes Lay. “Write a digital strategy that is open to change, that redefines the conversation around success and failure. Redefine your digital focus and consider ‘failure’ as seeds for future growth.” cues icon
Stephanie Schwenn Sebring established and managed the marketing departments for three CUs and served in mentorship roles before launching her business. As owner of Fab Prose & Professional Writing, she assists credit unions, industry suppliers and any company wanting great content and a clear brand voice. Follow her on Twitter @fabprose.