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Credit Union Marketing by the Numbers

Credit Union Marketing by the Numbers. Presented by Office of Small Credit Union Initiatives. Getting Perspective …. Five “ P”s of Marketing. Philosophy Product Pricing Placement Promotion. Philosophy. Structure – Cooperative, Not-for-Profit, Volunteer Board

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Credit Union Marketing by the Numbers

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  1. Credit Union Marketing by the Numbers Presented by Office of Small Credit Union Initiatives

  2. GettingPerspective …

  3. Five “P”s of Marketing • Philosophy • Product • Pricing • Placement • Promotion

  4. Philosophy • Structure – Cooperative, Not-for-Profit, Volunteer Board • Original Field of Membership vs. Current FOM • Mission • Vision

  5. Product • Research Consumer Needs • Features • Benefits

  6. Pricing • Research Competitor’s Pricing • Cost Analysis • Breakeven

  7. Placement/Delivery • Face-to-face • Internet • Phone • Third-party providers/partnerships

  8. Promotion • Creative Concept • Collateral Materials • Advertising Outlets • Internal Training • External Training

  9. Planning Process • Identify your uniqueness • Develop your story • Define your audience • Develop your Marketing Plan • Create materials • Train your employees & volunteers • Implement plan

  10. Identify your uniqueness • Structure • Core values • Community involvement • Products & Services • Mission

  11. Define your Market • Age • Where they reside • Income Level • Gender

  12. Where to find helpful information • NCUA – www.ncua.gov • Local NCUA Examiner • In-house Data System • MCIF System • Survey • U. S. Census – www.2010census.gov • Industry Publications • Local Chamber or Development Corporation

  13. Create a Marketing Plan • Be Specific • Clearly State Goals • Develop your marketing mix • Include a reasonable budget • Include Communication Schedule

  14. Key Marketing Information • Average New Car Loan Amount • Average Used Car Loan Amount • Average Savings per member • Contribution to gross income per member

  15. Key Marketing Information • Service/product Penetration • Average Home Equity Loan • Average Checking Deposit Amount • Market penetration

  16. Member Recruitment Costs • New Member - $75-$150 • Existing Member - $20

  17. Another Effective Budgeting Formula Illustration: Need to increase membership by 200 new accounts. Develop budget: Recruitment Cost - $125 x 200 = $25,000

  18. New Member Recruiting Budget Illustration: Need to increase membership by 200 new accounts. Develop budget: Average new member contribution to gross income - $269 x 200 = $53,800 Proposed budget: $53,800÷3 = $17,933

  19. Developing a Loan Promotion Budget Illustration: Need to increase new cars by $2 million Size of target audience: Divide $2 million by Average New Car Loan Amount of $14,767 = 136 loans Response Rate: 2% Number of Mail pieces: 6,800

  20. Potential Impact to Net Income - Formula Projected Loan Generation (Goal $) x Blended Loan Yield (Average Loan Yield – Average Investment Yield) = Increase to Net Income Increase to Net Income ÷ Projected Campaign Costs = Contribution to Net Income per Marketing Dollar Spent

  21. Potential Impact to Net Income – Example $2 million in new car loans x 4.37% net spread (.0437) = $87,400 annualized income $87,400 annualized income ÷ $29,100 total campaign expenses = Earn $3 for every marketing dollar spent

  22. Create Materials • Uniformed/Similar look – Branding is very important • Easy to read • Simple & concise message

  23. Implement Plan • Create Advertising Schedule • Staff Training • Watch deadlines • Monitor Progress

  24. Evaluate Plan • Use gross numbers, not net numbers • Identify what worked & what didn’t • Consider Buying Cycle

  25. Sample Campaign • Newsletter • Website • Posters/Banners • Direct Mail – 3 versions • Specialty Publications • Radio • Cable

  26. Newsletter Mailed to all members

  27. Direct Mail Mailed to 10,000 homes within five miles of credit union

  28. Website Use a consistent message

  29. Specialty Publications • Weekly Newspapers • Business Journal

  30. Sample Campaign Mix $42,500 total budget • 28% in Direct Mail • 20% in Radio • 16% in Cable • 21% in Weekly Papers • 7% in Business Journal • 5% in Newsletters • 3% in Giveaways/Poster/Banners

  31. Results from Sample Campaign • 344 new members • 24% Increase in Car Loans • 21% Increase in Home Equity • 30% Increase in CDs Shares • 5% Growth in Income

  32. Marketing Myths • Cute campaign them cannot mask a poorly designed or priced product • Campaign must appeal to target demographic – Remember this Dr. Pepper Ad?

  33. Marketing Truths • Promotional component is least important of the 5 “Ps” • Informed planning will yield the greatest return.

  34. Understanding “Knowable” • Buying Cycles – watch large retailers for clues • Ratios, data & general demographic information

  35. Understanding “Unknowable” • Humans are controlled by emotion & life experience • Unexpected Society Events

  36. In Closing • Opportunity abounds • Consumers are looking for alternatives • Be bold

  37. Questions?

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