January 16, 2020 | Becky Summers
Among the trends we saw in 2019, one theme was constant: The financial services industry is as competitive as ever.
New technologies, channels and competitors continually disrupted the market, creating considerable noise for credit unions to break through. Nontraditional players forced credit unions to compete on multiple fronts – technology, lifestyle and branding – in addition to having competitive products and rates.
The good news is, because credit unions are strongly member-focused, they may have an edge against those disruptors. Relationships will likely be a significant strategic advantage as competition for members and share of wallet increases.
Credit unions can leverage technology to create meaningful, one-to-one experiences. Using data and analytics, credit unions can strengthen their connection with members and nurture important organic growth. And they can create compelling, personalized appeals to new members.
To increase member accounts and share of wallet, credit unions may need to stop selling – at least for a moment.
Members are savvy about modern marketing practices, and they disdain mistargeted communications. They know the businesses they interact with keep loads of information about their personal lives and purchasing patterns. To members, that means businesses and financial institutions should know them and use that information to interact on a more personal level. According to Accenture's 2018 Digital Banking Report, a third of consumers said they abandon business relationships when customization is lacking.
Even with modest marketing staff and budgets, credit unions can deploy sophisticated campaigns. Begin by gathering the right intelligence. To build effective targeted marketing campaigns, find out three things:
Based on where you stand, you can figure out where to grow. Benchmark your credit union against peers to determine where the greatest growth potential exists.
Compared to institutions of the same size or region, how many products per household does your credit union average? What is your share of wallet for loans and deposits? Are account balances high enough based on the profile of your members?
Benchmark data can also be used to refine existing campaign goals and messages. For example, when share of wallet is low, credit unions can shift their campaign focus to relationship-building or encouraging higher balances rather than opening new accounts. Or, for your organization, the opposite may be true: A high share of wallet signals the need to aggressively add new households to grow the institution.
With benchmark data, you can set the right marketing goals based on your organization's capacity for growth.
A demographic snapshot isn't enough to create strategic marketing plans and compelling campaigns. Your marketing team needs more information to identify ideal members and create powerful connections. Luckily, that information is abundant and typically within reach.
Credit unions can combine demographic information with product penetration, balances and transaction-level data to build detailed profiles of your best members. Data-driven member profiles can help uncover the best opportunities for growth.
Products solve problems for members. Your products should demonstrate a deep understanding of your members and the challenges they face.
Perform a gap analysis of your portfolio, taking into consideration your benchmark data and ideal target audience. Evaluate whether you offer the right products, with compelling terms, in language your members understand.
Also consider if your application processes and delivery methods match consumers' needs. Having the right products is one step; being easy to work with is another.
There is always more to learn, especially as member needs change, digital banking evolves and data capabilities increase. Before investing in marketing or sales campaigns, pause. Use a variety of available data points to find an ideal mix of members and products for your credit union.
Targeted marketing starts with investigation and introspection. Dig deep into the information you have. Those insights will define your potential and mark the path toward growth by solving problems for your members.
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