Marketing in a Digital World
Marketers and consumers are opting for blogs, tweets, and social media over traditional channels.
The recession is shrinking a lot of things, including many credit union marketing budgets. In an attempt to use their precious marketing dollars more efficiently and to reach younger potential members, credit union marketers are embracing the digital world.
It’s the world where your members and potential members live. It’s where they do research on financial products and services and where they quickly tell family, friends, and colleagues about their findings.
About 65% of consumers report having had a digital experience that influenced their opinion about a brand, according to a survey by Razorfish. In addition:
- 64% report making a first purchase from a brand because of a digital experience;
- 97% report having searched for a brand online;
- 70% have read a corporate blog;
- 67% have watched a commercial or video advertisement on YouTube;
- 65% have played a branded, browser-based game like Got Milk’s “Get the Glass”; and
- 73% have posted a product or brand review on a website like Amazon, Yelp, Facebook, or Twitter.
A youth strategy
Some credit unions are adopting digital marketing strategies primarily to attract younger members. Among them is $220 million asset Erie (Pa.) General Electric Federal Credit Union. Its objective, according to Trent Mason, chief marketing officer, is to have 25% of its membership between the ages of 16 and 30 by 2012. To meet this goal, the credit union will use social media channels such as Flickr, YouTube, Vimeo, Facebook, and Twitter.
The credit union’s summer campaign, launched in July, features BubbaLuv—a local celebrity who wears a cape and dances at sporting events. “He’s a ‘SupaFan’ of the credit union, and we sponsor him,” Mason says. “We give him venues including our microsite [bubbaluvsthat.com]—which got 100 views a day even before the launch—to post videos he thinks are funny, and to blog and use other social media sites.”
BubbaLuv brings new focus to Erie General Electric Federal’s social media efforts. “Instead of saying, ‘The credit union is great,’ we’re using a member who already has a following and helping him gain greater exposure,” Mason says. “It’s a fun, creative outlet as we ask the community to ‘Let the General Electric Credit Union make a “SupaFan” out of you.’ It’s authentic, so it works.”
Credit unions should only use channels that fit their business models, cautions Mason. “We didn’t use Twitter or Vimeo heavily at first, but with BubbaLuv, they fit the model,” says Mason. “As people follow BubbaLuv, they follow the credit union.”
Digital marketing increased Erie General Electric Federal’s marketing budget slightly. The credit union purchases microsites and the talent to appear on some of the sites. “Plus, we advertise using traditional media,” Mason explains, “which drives traffic to our digital offerings. It’s definitely worth it and I’m fortunate to have a CEO and board who understand that. People tell us they ‘see us everywhere’ now.”
These efforts also have increased staffing needs. The credit union has added about one full-time equivalent position to create and monitor digital content. “It’s probably better not to be on sites like Facebook and Twitter if you can’t keep the content fresh,” says Mason. “But people are already shaping your brand in those spaces, so it’s important to get there as soon as possible.”
The value of digital
Montana 1st Credit Union, Missoula, with $63 million in assets, also started using digital marketing to attract young members, but now considers it a general marketing strategy. Its boringissexy.com microsite reminds people that the credit union has been safe and sound all along, and not part of the recent big-bank calamities. In fact, the credit union has been “boring the socks off Missoula for more than 78 years. Just ask your Grandpa,” according to the microsite.
“We use billboards and radio to drive traffic to the site, and more than 4,500 people visited it at the beginning of our three-month promotional period,” says Tyler Disburg, assistant vice president. “We’re pushing out a message that’s relevant to them,” he says, trying to engage them on a level above that of traditional advertising.
To get attention today, messages have to be different. “If a billboard just says the name of a bank, people will ignore it, but if it’s a little different, if it says ‘boring is the new sexy,’ it just might engage people,” Disburg says.
The credit union’s newest site is thankyourbank.com, where consumers can post messages such as, “To HugeBank: Thank you for not returning my NSF fee after I banked with you for 50 years.” Every week the credit union sends the best post’s author a T-shirt, and uses that person’s post for the following week’s T-shirt. The site includes a link to Montana 1st’s website and some unobtrusive product information.
The credit union isn’t using social media yet. “I understand why credit unions are there, but when we do it, I want it to be in a very appropriate, meaningful way,” says Disburg. “We won’t have a Facebook page just because it’s the thing to do. We’ll develop a plan and determine what content we’ll post that’s relevant to our membership, or there’s no point.”
With cuts to his marketing budget, Disburg has shifted dollars from television advertising to digital. “With my limited resources, I can’t do TV with the frequency that would get the message to stick. I get more value for the dollar in the digital space.”
Streamlined and inexpensive
It’s possible to start small with digital marketing if your resources are limited. That’s the approach $67 million asset Nikkei Credit Union, Gardena, Calif., has taken.
In August 2009 it launched an e-mail marketing program to enrich communication with Web-savvy members. “It was such an unsteady year and our marketing budget was fluctuating, but we were able to launch this because it was a very affordable and reasonable investment,” says Jeanne Denton, marketing director.
There were one-time programming and design costs and continuing costs of $14 a month. “The cost savings for postage alone have made it worthwhile,” Denton says.
“I’m a department of one, so we had an agency create easy-to-use templates with a content management system,” she explains. “Now an e-mail marketing piece is so much easier to put together than a print piece and you can see the results much quicker. I know immediately if people open the emails and can tell what they’re interested in.”
An e-mail’s subject line is critical to the “open rate.” “If it’s not intriguing, it doesn’t matter how great the actual e-mail content is,” says Denton. “If you have one that’s intriguing and spells out a benefit only for them, they’re interested.”
The credit union achieved a 56% e-mail open rate on its initial campaign—well above its 30% target. The results of certain campaigns surprise Denton. “One of our biggest open rates was for ‘More branches for your convenience,’ and I didn’t actually think members would open that one. It doesn’t sound very exciting, but convenient branches are important to them.”
So far she sends the same e-mails to all members, but has the ability to segment her membership and hopes to begin sending targeted e-mails. She’s also looking into creating videos that share member stories. “I know most members join credit unions through family and friends, and this would let them share stories with a click of a button that tell their relatives or friends about the credit union.”
McGraw-Hill Federal Credit Union, East Windsor, N.J., with $230 million in assets, posts videos on its website and is in the process of building a YouTube channel for them. “Our CEO, Shawn Gilfedder, is the star of our ‘On the Money’ educational podcasts,” says Sam Ingram, the credit union’s vice president of marketing. “In June, ‘Good Morning America’ featured us in a segment about credit unions vs. banks, and we’ll put it on our website and on YouTube.”
The credit union also uses targeted e-mail campaigns that its select employee groups distribute to their employees. After the employees become members, McGraw-Hill Federal markets directly to them. “We target promotions to youth, seniors, and other groups,” Ingram says. “For our active membership that uses online banking, that’s their store and it’s efficient to reach them digitally.”
The campaigns get results. With three segmented e-mail pieces featuring unique headlines and different checking account types, the credit union secured 150 total new account inquiries, far exceeding its goal.
Ingram has discovered that if he sends bulk e-mails from the credit union’s server, many recipients’ servers block them as spam. “We distribute our e-mails through a company that already has relationships with Internet service providers,” he says. “Now our open rate is 20% to 25%, and of those, our promotions have about a 15% click-through rate to our website. That’s phenomenal considering 1% is good for direct mail.”
During the past three years, digital channels have become an integral part of McGraw-Hill Federal’s marketing. “But we haven’t cut back on traditional marketing,” says Ingram. “We still do direct mail, statement stuffers, and experiential marketing where we raise awareness by participating in events. Digital is part of everything we do. Even our direct mail includes a website people can visit to learn more about the promotion.”
The credit union hasn’t cut its marketing budget as it has added digital channels, but each digital campaign’s creative and delivery costs are lower than for traditional media. “And it’s so easy to see your return on investment,” says Ingram. “If I spend $5,000 on a campaign, I can easily see real-time open, click-through, and conversion rates. I can see how effectively we’re spending our members’ money.”
Now McGraw-Hill Federal is investigating how it can market even more cost-effectively by partnering with a digital marketing company that has tools it can leverage. “You absolutely use either internal or external resources to produce marketing content, whether it’s digital or traditional,” says Ingram. “There are many external resources out there, and you don’t have to spend millions of dollars. You have to find the right resources for your size credit union.”
Tailor your strategy
Mason’s best advice for credit unions when it comes to using digital media: Be yourself.
“Not all digital media work unilaterally for every business model,” he asserts. “Once you pick the media that fits your message, understand that many of the tools and sites you can use, like Facebook, are going to be the same ones your peers are using. Your opportunity is to put your own spin on things—do what fits your culture.”
And the media channels alone don’t automatically equal effective marketing. “Digital media get a lot of hype—and deservedly so—but hype never was a replacement for strategic thinking,” says Mason. “Digital media have their place in a fully integrated and robust marketing and business development plan.”