Stay in Front of Members

Database marketing, branding raise CUs above the marketing clutter.

August 1, 2010

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.”

Branding: More than just a logo

John Mathes says some credit unions that have never done extensive marketing will answer his question about their branding by pointing to a logo or a color scheme.

“Those things are brand identity, not brand positioning or differentiation,” says Mathes, director of brand strategy at Bancography. He compares identity to, say, the way a person looks, and positioning to how that person acts and comes across.

“For decades, credit unions haven’t done a lot of serious marketing,” he says. “When they realize they have to, especially to take advantage of current economic conditions, companies like ours become their advocates. They come to us so they don’t have to worry about learning a whole new specialty.”

Changed conditions or not, Mathes says the principles of branding remain the same. “The differences now are in the media execution. The rise of social media indicates that people consume marketing and advertising differently than they did even 10 years ago. There’s a big change in how you talk to members. Communication has gone from monologue—bill stuffers and generic messages—to dialog. Dialog means you approach members from a clear and differentiating position in much the same way a friend would.”

Creating a brand involves what Mathes calls “a brand map process,” planning a branding strategy much the same way you would a journey. “Along the way, we ‘mine for gold,’ digging for the little nuggets that set a credit union apart.”

Those nuggets might be an interesting history or great longevity. “You’re trying to get away from clichés like, ‘We know everybody’s name,’” he says.

Mathes cites Community 1st Credit Union, Shoreline, Wash., as a successful brander. The $120 million asset credit union started out serving postal employees before obtaining a community charter six years ago.

“When I did a brand strategy for them, I dug into their postal heritage and came up with a simple, appealing reference to their past and present: ‘First Class Banking,’ ” he says. “That image built on the connotations everybody has in mind when it comes to ‘first class,’ whether it’s a hotel, airline, or level of mail service.”

With the brand map process, employees fill in a workbook asking such things as:
• Their perception of the credit union;
• Adjectives describing the credit union;
• A comparison to brands from other aspects of their lives; and
• What they see as unique or unusual about the credit union.

“Generally, it takes four to six weeks to deliver a brand map,” Mathes explains. “Our core deliverable is brand positioning, a plan for how they differentiate themselves via a clear, well-defined image. That image has to resonate internally and externally. When it does, everything flows from there.”

CUs Market Next Generation Of Online Banking

Online banking has become a must-have for consumers to handle their finances and run their economic lives. But online banking as we know it has become irrelevant, says Albert Ko, senior vice president of consumer solutions at Intuit Financial Services (formerly Digital Insight), a CUNA Strategic Services (CSS) strategic alliance provider.

Ko’s statement makes sense once you look at Intuit’s latest consumer online banking experience. It’s a lot like looking at the dashboard in a luxury car—every instrument is in a convenient, logical position, and every action that a driver (consumer) might want to take has been anticipated.

“The screen presents real, actionable insights and capabilities across a credit union member’s financial picture,” says Ko. “It’s akin to the experience but in
a banking context. Online banking knows who you are, organizes your transactions, and gives you the tools to make informed financial decisions.”

The online system allows members to manage their finances across the spectrum—checking, savings, bill pay, investments—from one place. This allows credit unions to “take advantage of the incredible databases of information they have about their members and be able to offer services and products at opportune times,” Ko says.

Some offers produce gratifying results. “We have a built-in TurboTax feature where credit unions can help fill in tax documents automatically, and where members can keep a running track of their tax liabilities,” says Ko. “In credit unions that are now using this system, 94% of users opt to deposit their tax returns in that credit union.”

With Intuit’s online banking, consumers experience:
• Account tracking. Consumers can see checking, saving, mortgage, and other transaction histories for five, 10, 14, or more days.
• Transfer feature. This is intuitive and easy to use, which Ko says encourages greater use of online banking.
• Where the money goes. This is a running account of expenditures by type, such as groceries, entertainment, and so on.
• Make a payment. The bill-pay feature, which uses a check metaphor, is powerful and satisfying, says Ko.

“Users instinctively understand how to use the payment function and actually think of it as a check,” he says. “It’s a feature that will do a lot to get many more people using online banking and bill pay.”

Other features credit unions can offer are tax tracking, alerts and reminders, investment and loan tracking, and spending goals.

• Bancography, Birmingham, Ala.: 205-251-3227 or
• CSS strategic alliance provider: Intuit Financial Services, Calabasas, Calif.: 888-344-4674 or
• Raddon Financial Group, Lombard, Ill.: 800-827-3500 or