Consciously or not, credit unions amass immense amounts of data about their members. Analyzed properly, those data can be the basis of intensely focused, highly productive marketing approaches that recognize demographic differences among members.
“Demographic segmentation is a way of looking at members and seeing which of your products and services they are the most likely to be receptive to,” says Dan McGowan, marketing director at Raddon Financial Group.
Examples of demographic segments include:
• Credit-driven consumers, younger than age 35, earning more than $50,000 per year. These are credit-consuming members, open to various credit products.
• Low-income depositors, 45 years and older, earning less than $50,000 per year. You make a completely different set of offers to this segment.
• Upscale households with people older than age 35 who earn $125,000 per year or more. They use most everything but have a lot of options.
“The idea is to stay in front of members by approaching them with relevant offers,” McGowan says.
He adds that segmented marketing requires taking a systematic approach and bearing in mind that even if targeted members don’t respond immediately, a credit union is still building awareness. “When it comes time for members to buy the product you’ve been pitching, they’ll think of you first even if they don’t respond immediately.
“The other thing to remember about segmentation is that you’re not only trying to sell a product, you’re also educating members and cultivating relationships,” McGowan says. “You’re telling people at a certain income and age level that these are products they should consider and that you’re a reliable, knowledgeable source for them.”
Raddon offers a customized segmented marketing system called iNTEGRATOR that starts with a comprehensive database analysis to see where a client is strong.
“We assess performance, strengths and weaknesses, product lines, and profit centers to help a client create better member relationships,” McGowan explains. “We can rank their performance relative to other credit unions based on our CEO Strategies Program, which has 500 participating credit unions.
“Our High Performance Index gives them an idea of how high-performance financial institutions operate,” he continues. “Once a client is ready to go to iNTEGRATOR, we have a good idea of their product/profitability segmentation and which member relationships may be winding down or are ready for upgrading.”