Data-driven marketing is replacing the crystal ball at credit unions that anticipate members’ future wants and needs with targeted marketing offers.

Marketing experts say credit unions are using data to forecast which member segments are likely to respond to appeals for specific products and services, personalize offers delivered at the right time using the right channel, and simultaneously manage 30 or more microcampaigns.

Adopting member-focused, data-driven marketing is typically a two- to three-year process. It starts when credit unions begin experimenting with the data they can access now to focus on strategic goals.

Data access

Marketers’ first challenge typically is accessing data in a usable format, according to Felipe Gil, CEO/co-founder at Prisma Campaigns.

He says marketers can start by: 

• Exploring existing capabilities for accessing and extracting data from the core system, which will typically include third-party providers over time.
• Understanding which data is required to craft a specific offer for a specific member segment.
• Learning how to transform and cleanse the data into a standardized format to make it readily usable. This may require help from an outside vendor.

Credit unions often begin data-driven marketing using resources they already have, Gil says. That allows them to achieve marketing wins that demonstrate the power of data and build credibility with decision-makers.

As credit unions expand their use of data to drive marketing, business intelligence solutions often play a vital role by identifying member segments to target. Adding a marketing automation platform automates the delivery of multiple campaigns to specific member segments using multiple channels.

Marketing automation sits between the data and delivery channel to tailor messages to a specific member’s profile in a microsecond, such as displaying a personalized message or banner ad to members using online banking or a mobile app.

As credit unions gain experience with data’s benefits, marketing automation can take a broader role in member communication. For example, credit unions can automatically provide reminders to members whose loan payments are late when they use the mobile app.

“That’s the mind shift that happens when you start thinking about the possibilities of data-driven marketing and how it maps to your requirements,” Gil says.

Making the transition

In phase one of its data-driven marketing transition, $420 million asset River Valley Credit Union in West Carrollton, Ohio, used core system data to target members based on a 30-day, rearview-mirror measurement of member response to marketing offers.

Three years later, River Valley made the leap to phase two in early 2022 by gaining the ability to measure member response every Monday. That makes it possible to adjust segments and refine marketing offers to make each microcampaign more effective, says Eric Gagliano, senior vice president, sales and marketing. 

The credit union relies on vendors for third-party marketing data and marketing automation.

For example, a data-driven auto loan promotion might increase page impressions but fail to generate more applications. That would prompt Gagliano to reexamine the landing page to see if it’s clear and whether the application button is in the right place.

If applications increase but approved loans remain stagnant, he reexamines targeted member segments.

“This is data driving decisions on a week-to-week basis as opposed to looking in the rearview mirror each month,” Gagliano says.

Reaching nonmembers

One surprise was the effectiveness of emailing nonmembers, which started as a one-month trial but became an ongoing effort when it achieved an open rate of 20% to 25% and a click-through rate of 2% to 3%. That was a huge improvement over earlier nonmember outreach, he says.

A broadcast media conglomerate provides nonmember prospect lists based on people who search online for selected auto loan or mortgage terms in geographic areas near branch locations, as well as demographic data.

Phase three will start in late 2022, when River Valley begins using a business intelligence solution to collect behavioral data based on members’ activities or actions. For example, the credit union can use the data to identify and reach out to members who behave in ways that make it statistically more likely they will leave the credit union, such as opening accounts at other financial institutions.

Gagliano says these approaches can help marketers change their image within the credit union from “arts and crafts” to “strategic drivers.” 

River Valley’s shift includes giving a talented marketing employee the experience and education required to become a data analyst.

“The fear with data analytics is getting into analysis paralysis,” Gagliano says. “It is so easy to drown in the data. You’ve got to stay focused on corporate objectives and marketing objectives.”

Next: Simultaneous campaigns