Your credit union is not only different than traditional banks and financial institutions, it’s different than every other credit union out there. And while some credit unions have been around for generations, while some are far more recent. While some restrict membership to people in a specific industry or occupation — like a firefighter’s credit union — others are open to everyone.
But there’s one thing almost all credit unions have in common: Tight marketing budgets.
The economics of being a credit union makes marketing difficult when you’re not just competing with other credit unions but also large banks. According to James Schenck, the CEO of PenFed Credit Union, their average annual marketing budget hovers at around just $10 million compared to bigger financial services players whose marketing budgets can top $1 billion, making it critical to develop truly effective marketing strategies that deliver new members and build loyalty.
Unfortunately, there is no silver bullet, one-size-fits-all credit union marketing strategy. But there are some proven best practices and powerful marketing principles that all credit unions should implement in one form or another, particularly for those credit unions that want to thrive in the digital age. But it’s up to you to get to know your members and decide which strategies to employ when creating your own marketing mix.
Differentiate On Your Values
You may think you need to compete primarily on rates and fees, but the truth is consumer decisions are driven by a multitude of factors, including emotions, community, connection, and personal values. In fact, according to psychologists, when making purchase decisions, consumers place greater reliance on emotions and experiences than information. So if you market based on your rates alone, it’s only a matter of time before another bank or credit union outdoes you and you find yourself caught in a losing battle for members’ loyalty. As Jason DuPlant of Neches Federal Credit Union says, “For any offer or rate, a prospective member can probably find 1,000 more just like it — or better.”
With that in mind, credit unions should focus on benefits that extend beyond the rates, fees and products offered, like community connection and trustworthiness, personalized experience, shared ownership and other value-added services. But that’s not to say you should neglect other aspects; you should put your values first and make personal connections with prospects and members, but also show them why your services are a sound, logical choice. Remember, you have a wealth of customer data at your fingertips that can help you determine your members’ marketing personas. You can harness data from account histories, social media, support center information, NPS surveys, and online reviews to gain insights and highlight what makes you uniquely suited to a prospective member’s needs.
Invest in Meaningful Content Marketing
A crucial step toward differentiating your values is to make those values known, and content marketing can be incredibly effective at doing this. As a credit union, you can do this by creating insightful and engaging content for your website, blog, email, social media accounts and any other channels your members use. The key is that the content speaks to the needs, emotions, and questions of your members and the new members you are looking to attract. This content can be educational, such as sharing valuable advice on savings, homeownership, and building a strong credit history, or it can tell stories that will resonate with your ideal member base on a more emotional level, like sharing testimonials or your involvement in the community. Of course, keyword rich content is also helpful in boosting search rankings (SEO) and helping relevant prospects find you.
Furthermore, people looking for the right credit union rely on social proof. They are more likely to want to join your credit union if your current members are satisfied with their experience and willingly say so, and members are more likely to feel satisfied with their experience if they feel other members are satisfied too. This makes content like testimonials, reviews and case studies all the more important.
Now, digital content far and away has the farthest reach, especially if it is designed to be accessible and shareable across channels and devices. And in our noisy, oversaturated digital landscape, creating quality content is key.
A mix of the following types of content can boost your credit union’s content marketing strategy:
- Blog posts
- Customer testimonials and reviews
- Podcasts and webinars
- Case studies
- Social media posts
- Email newsletters
- How-to guides
- Videos and graphics
- Referral programs
Improve Customer Experience & Support
Customer attrition is hard for any brand, particularly for those in the financial services space, like credit unions, that can often have non-binding or short term contracts. While factors like rates and fees might start the thought process to switch, the main reasons that customers actually make the final decision is customer experience and support. Research shows customer experience in financial servics is prioritized ahead of things like your rates and fees, and customer support is a leading cause of churn; meaning that the more you invest in optimizing the customer experience and improving customer support, the more likely you are to win new customers and keep your existing ones.
Collecting valuable feedback through tools like NPS surveys can reveal your members’ pain points, such as issues with customer support accessibility; which you can address to create a more smooth experience and strengthen your customer loyalty. And, analyzing data at key points along the consumer journey can highlight areas that require greater attention; for example if potential customers are viewing your member sign up page but leaving without completing a conversion, it may indicate problems with the sign-up process.
Ultimately, the goal here is to ensure a smooth, user-friendly and satisfying experience for your existing and prospective customers at every customer touchpoint, whether that’s your website, mobile app, in-branch, in your call centers, or anywhere else your customers and prospective customers engage with you.
Digital-Transformation To Target New Members
Digital-transformation has never been more important, particularly for credit unions. While about 52% of older consumers do their banking on a laptop or tablet, nearly 70% of younger banking customers do theirs on their phone. This comes into sharp focus when you factor in that the average age of a credit union member is 47 and past prime borrowing age, and 60% of their children are choosing to bank with a different institution. And while it’s important to take care of your core customers; credit unions typically haven’t invested enough in digital transformation to attract new, younger members who will ultimately represent future banking customers.
With an increasing number of consumers doing their banking online, credit unions desperately need to invest in digital-first financial products; from virtual wealth management tools to robo-advisers to real-time loan approvals. And, those same credit unions need to ensure they’re delivering first-class digital experiences, including having a user-friendly mobile app, a sleek website, and offering 24/7 customer support. And while this may be expensive for credit unions to do, it’s also necessary to acquire future customers. But being digital is only part of the solution, credit unions also need to direct marketing efforts toward key channels in order to engage these new audiences, including social media, podcasts and webinars, influencer partnerships (yes, financial influencers do exist), the list goes on.
If credit unions don’t offer online products, deliver digital-first experiences and engage with younger consumers on their preferred channels, then they will not factor into their decision-making process and consumers will simply choose to bank elsewhere.
Nurture and Reward Members With a Referral Marketing Program
Here’s an important statistic to remember: 92% of consumers trust recommendations from friends and family over all other forms of advertising. This simple fact is why member referral programs are a proven strategy for attracting new credit union members.
Using carefully designed rewards and incentives — whether they’re cash, third-party vouchers or other value-added services — credit unions can drive positive word-of-mouth referrals from existing customers and effectively create brand ambassadors who help market their services and acquire new customers. And the leads those members refer will often resemble their own marketing personas, and thus are likely to have an affinity for you and your products and services.
Vital to credit unions, member-get-member programs cost a fraction of other traditional marketing channels, including pay-per-click (PPC), paid social media campaigns and video ads. And while research shows that the average cost-per-acquisition (CPA) for banks and credit unions can hover between $400 and $700 per new member, referral programs cut the average CPA by up to 80%. And that’s before we get into the value that is harder to quantify, although maybe reflected in future NPS surveys, such as more satisfied, trusting, and loyal members.
Build a Solid, Loyal Membership With Effective Credit Union Marketing Strategies
The marketing strategies that you employ will define who you target, how you target them, and, ultimately, how that audience perceives you. In the current digital landscape, that means highlighting what makes you uniquely suited to help, distributing engaging content across preferred channels, delivering a stellar customer experience, embracing digital-first solutions, and building and launching a world-class member referral program. What your credit union decides to focus on is up to you, but if any of the above strategies gave you an “Aha” moment, then it might be worth exploring for your credit union.
Buyapowa powers numerous member-get-member programs for credit unions, like Delta Community Credit Union and California Coast Credit Union; banks, including BBVA and HSBC’s first direct; and other financial service providers, like IG Markets and Ageas.
So if you’re interested in learning more about the Buyapowa platform and our member-get-member referral programs, don’t hesitate to get in touch; we’re always happy to talk.
Editor’s note: Originally published March 19, 2015. Updated with additional, fresh content and republished December 4, 2020.