River Valley Credit Union is taking a three-phase approach to data-driven marketing, says Eric Gagliano, senior vice president, sales and marketing.

Turn data into action

Data-driven marketing allows credit unions to provide the right offers at the right time in the right channels.

November 18, 2022

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.

‘If you think you’ve tested your workflow enough, test it five more times.’
Hilary Kissell

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

Simultaneous campaigns

Clackamas (Ore.) Federal Credit Union began implementing data-driven marketing in the fall of 2021. By September 2022, the $650 million asset credit union had 25 to 35 marketing campaigns running simultaneously based on next-day data, says Hilary Kissell, director of marketing and community development.

Clackamas Federal scrambled to develop one-off, standalone marketing emails after its former email marketing vendor refused to allow a phased transition to a new marketing automation platform. That allowed the credit union’s five-member marketing team to gain experience quickly.

“Those one-offs were a good learning point for building an email template, setting up funnels, and checking to see what’s working,” Kissell says.

Clackamas Federal’s early automated campaigns focused on member onboarding and key products using data pulled from a business intelligence solution. A home equity loan campaign launched in February 2022 combined third-party and core data to target homeowners.

In the campaign’s first five months, emails to more than 35,000 members had a 61% open rate, leading to 127 home equity loans with a balance of $2.75 million.

The member onboarding campaign relies on four onboarding journeys to segment new members for promotion of “next best” products and services using seven different personalized offers.

The credit union uses another 15 marketing automation journeys to promote products. It monitors and tweaks campaigns based on early responses. Return-on-investment models built into the platform tally direct and indirect results of each effort.

Testing and education

Kissell notes that testing is a key element of developing marketing workflows that automate the delivery of offers and responses.

“If you think you’ve tested your workflow enough, test it five more times,” she says.

Education was critical to prepare the marketing team to apply data-driven tools. “It’s been a fun bonding experience for my team to go through this journey together,” Kissell says.

‘The true understanding of our members and their wants and needs is the key to serving them better through our products and services.’
Brandon McAdams

The marketing department shares data-driven marketing tactics and results with all employees by email, as well as during a recent presentation at an all-staff meeting.

“We need to tell our marketing story so our co-workers know what we’re doing to help,” Kissell says. “Getting to tell them that our home equity campaign was all intelligent decision-making based on data was really cool.”

Clackamas Federal will add text marketing in the coming months. Over time, Kissell will tie website and mobile app messages to data-driven marketing.

Top-down commitment

Isolated successes in using data to drive growth in mortgages and understanding digital app satisfaction allowed $4.8 billion asset Coastal Credit Union in Raleigh, N.C., to realize the benefits of making a top-down commitment to data-driven marketing, says Brandon McAdams, vice president, strategy and insights.

“We’re now on a journey to make data and advanced analytics foundational to all marketing efforts,” he says. “The true understanding of our members and their wants and needs is the key to serving them better through our products and services.”

Coastal consolidates data into a single view of each member to find “the right products and services for the right members at the right life-stage.” This effort includes:

  • Creating a data set that includes all members, products, and services.
  • Using analytical techniques to score every member against every product to determine their likelihood to adopt it.
  • Identifying small member segments who share behavioral, geographic, attitudinal, and/or demographic characteristics.
  • Developing targeted, personalized marketing content aimed at member segments with a high propensity to adopt a specific product or service.
  • Delivering those appeals to small audiences in microcampaigns it can track and tweak.

McAdams says a vital step in the process was creating a structured analytics data library that transforms the raw data in Coastal’s data warehouse into the information required for both strategic decisions and marketing campaigns.

“Specifically, on the marketing side, these structured data elements encapsulate members’ attributes, behaviors, and history, which are all used to help us better identify the best targets,” McAdams says.

The data also helps prioritize long-term strategies. For example, Coastal explored the data when depositor segments began to transfer money out of the credit union.

“We know their ACH data, we know who they pay, and we have personal segmentation to understand what type of depositor they are and what brands they like,” he says.

That information revealed gaps in credit card and mortgage product lines that Coastal plans to address.

McAdams notes the need for education and enablement that allows “everyone to speak the same language around data.” 

Coastal launched an organization-wide data fluency initiative to integrate data and analytics into everyday operations.

Next: Two challenges

Two challenges

Data-driven marketing lets you show members you know them and can address their financial challenges, says Josh Wilson, senior vice president of marketing at $2.1 billion asset Whitefish (Mont.) Credit Union.

He says credit unions often encounter two challenges in this area:

  1. Justifying the high expense of data-driven marketing and demonstrating results. This typically becomes an issue when decision-makers lack confidence in the potential results. 
  2. Making data-driven marketing scalable. This requires the marketing team to create and manage dozens of microcampaigns each year.

To make investments in data-driven marketing pay off, Wilson says credit unions must translate data into actionable insights. 

He adds that data-driven marketing communications must show you know who your members are, which includes using their preferred channel for engagement.

“The heart of data-driven marketing,” Wilson says, “is understanding your membership and communicating how your credit union can solve members’ financial challenges.”