credit union marketing by the numbers
DESCRIPTION
Credit Union Marketing by the Numbers. Presented by Office of Small Credit Union Initiatives. Getting Perspective …. Five “ P”s of Marketing. Philosophy Product Pricing Placement Promotion. Philosophy. Structure – Cooperative, Not-for-Profit, Volunteer Board - PowerPoint PPT PresentationTRANSCRIPT
Credit Union Marketing by the Numbers
Presented byOffice of Small
Credit Union Initiatives
Getting Perspective …
Five “P”s of Marketing
• 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/partnerships
Promotion
• Creative Concept• Collateral Materials
• Advertising Outlets
• Internal Training• External Training
Planning Process• 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• Age• Where they reside• Income Level• Gender
Where to find helpful information
• 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• 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 BudgetIllustration: 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 BudgetIllustration: 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• Newsletter• Website• Posters/Banners• Direct Mail – 3 versions
• Specialty Publications
• Radio• Cable
NewsletterMailed to all members
Direct Mail Mailed to 10,000 homes
within five miles of credit union
WebsiteUse 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?