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Marketing for Growth [Credit Union Management](Credit Union Management Via Acquire Media NewsEdge) How three CUs use different tactics to reach lofty goals. Credit union growth had been stagnant in recent years. According to the National Credit Union Administration (www.ncua.gov), industry membership growth was a tiny .63 percent at the end of 2010. By the end of 2012, membership was up 2.2 percent for the industry overall, while deposit growth was up 6.1 percent nationally and loans grew by 4.6 percent, compared to just 1.2 percent in 2011. While many struggle, these three CUs are making the most of their marketing efforts. Bold Goals An example of an aggressive marketing approach is that taken by $550 million/ 50,000 -member Alabama Credit Union (www.alabamacu.com), Tuscaloosa, Ala. Two years ago, its leaders established a strategic plan dubbed "Good 2 Grow" with the goal to become a billion dollar CU within a decade. Underpinning the goal was a commitment to maintain high service standards in the process. "We wanted to reach this goal while maintaining healthy financial ratios," says Kelley J. Jones, marketing manager. "To do this, we put an emphasis on increasing services per households and our Net Promoter® Score." She says that using Harland Touché marketing customer information file system from CUES Suppler member Harland Financial Solutions (www.harlandfinancial solutions.com) has been pivotal. "We are now able to target more specific segments of our membership to reduce the cost of marketing while seeing higher returns," Jones says. One such effort has been a new member onboarding program that aims to increase services per household in the first six months of membership. The program combines direct mail and reiterating e-blasts. Members receive six touch points within the first six months, coming at intervals of one to seven days after joining, 30 to 45 days, 45 to 60 days, 60 to 75 days, and then four and six months. Direct mail is alternated with email and at the end of a year members receive another email contact with a survey asking them to grade the CU The early focus is placed on easy-to -adopt products such as bill-pay, online banking and mobile banking. Further into the process such products as mortgages, credit cards and auto loans are added. "We always have special offers for these more difficult-to -adopt products to encourage members to act," Jones says, "such as $300 off closing costs on any home loan." The first month of this promotion brought a .05 percent response, which translated to four home loans with a total of $391,000. Similar results have been seen in subsequent months, Jones says. The pieces are designed like coupons so members recognize them and, in the process, feel they are getting a special deal. Net Promoter Score Jones says that an important indicator for success for many years has been an annual member satisfaction survey using Net Promoter Scores (http://tinyurl.com/crct3qy). NPS measures customer loyalty by looking at detractors and promoters. A score of +50 is considered excellent. "We have always received excellent results from the survey, but last year we received the highest Net Promoter Score in our history of +80," she says. In addition to the Net Promoter Score, CU leaders review traditional measurable indicators such as services per household, which stood at 4.56 percent last year and 4.49 percent in 2011. Services considered as part of this calculation include checking, loan products, online banking, bill-pay, direct deposit, e-statements and deposit products such as money markets, CDs and IRAs. As a follow-up, quarterly branch report cards are distributed internally that include information pertaining to branches' services per household ratio compared to the credit union's overall score. The goal for 2013 is 4.60. "Allowing our employees to see a record of their performance and how that performance compares to other branches has made a huge impact on our overall culture," Jones says. "Our culture has changed more toward the attitude that each employee has the power to change our credit union for the better." She adds that lagging branches have improved not only because they feel more pressure to compete with other branches, but also because they have a better understanding of what products other branches are successfully promoting. "This allows them to ask fellow co-workers for advice and tips that have worked to encourage members to add products and services," Jones notes. The credit union's efforts are paying off. Membership growth was 6.9 percent in 2011 and 7.8 percent in 2012. And the CU's assets grew by an impressive 23.0 percent in 2011 and another 14.6 percent in 2012. The onboarding program has made a difference: Members who completed the onboarding matrix had 70.2 percent higher deposit balances, 30.7 percent higher loan balances and a six percent higher retention rate. She notes that while every campaign may not be successful, the focus is placed on overall performance. "We view all marketing as a long-term success and if a specific campaign does not meet our expected goals, we try to evaluate the big picture," Jones says. "We also do not give up on a well-thought-out and organized plan quickly. We re- evaluate specific tactics regularly to determine any new opportunities that exist." Unprecedented Growth At Ventura County Credit Union (www.vccu online.net) with more than 50,000 members in Ventura, Calif., recent growth has been unprecedented, according to Tina Estes, AVP/ marketing. She notes that this trend began in September 2011, just before Bank Transfer Day, and has continued to the present. The credit union has experienced more than 10 percent growth in not only members but also assets in each of the last two years, ending 2011 at $567 million and growing to $627 million by the end of 2012. In addition, more than 7,000 new members were added in 2012, while loans increased by $13 million. "I think our brand and name recognition were strong in our community before Bank Transfer Day and when people wanted to leave their big banks, we had strong word of mouth recommendations from our current members," Estes says. In addition, a combination of radio and newspaper advertising, bus panels, search engine optimization and search engine marketing has proved successful. "We measure where our members first heard about the credit union whether it is from employer, advertising, family and friend recommendation, drove by a branch or search on the Internet," she says. Analyses have shown that 35 percent of members come from family and friends' recommendations, about 37 percent from employers and approximately 5 percent from radio, newspapers and other marketing efforts. "We have an ROI calculator built into our MCI F system [Raddon Integrator from CUES Supplier member Raddon Financial Group (www.raddon.com)] that gives back the actual costs and profit of each new account opened and tracked," Estes says. "Each marketing campaign is tracked in our MCIF and assigned an ROL It helps us decide whether it was successful and to keep running it." Marketing plans and budgets are developed at the beginning of the year but are designed to be flexible. Estes explains that if rates go up more quickly than expected or if more liquidity is needed, or if a new product is launched earlier than planned, the marketing plan and budget need to ebb and flow with the changing needs of the credit union. "We of course have our plan but unexpected items pop up, and marketing needs to be able to keep up with the changes," she says. Short-Range Planning At $195 million/23,900-member Cabrillo Credit Union (www.cabrillocu.com), San Diego, a short-range approach is the order of the day. "Some CUs plan their goals for the coming decade, but ours are more shortterm, more realistic and more attainable," says CUES member Toby Hayes, vice president. "Our strategic plan looks at what we want to do and where we want to be two years from now. Right now it's all about technology." He notes that the oldest Millenniais are now in their 30s, so technology-based ways of connecting with members are key relationship builders. "We're transitioning everything to the mobile platform, including account opening and loan applications," Hayes says. "If we don't have it, they'll go somewhere else." Cabrillo uses mShift (www.mshift.com) for mobile banking, and has also begun a relationship with MeridianLink (www.meridianlink.com) to launch a combined online account opening and loan application by year-end. Other goals include greater penetration within existing select employer groups and maintaining, if not growing, the credit union's loan-to-asset ratio. "For SEG membership, we're shooting for two percent net growth this year," Hayes says. "As far as loan-to-asset ratios go, we're sitting right at 67 percent. Without doing any dealerdirect lending, we're aiming for $3 million a month in consumer loans, which we often hit." Hayes says having close connections between the marketing and business development functions is a plus. "We want to put our best image forward, communicating membership advantages to our SEGs and growing loans all at the same time," he says. "Having a CU that sees these two departments function as one is a key hurdle to driving growth." Hayes adds that not every campaign is a success. "Some are runaway hits and others fall flat on their face," he says. "ROI is important, but it's not everything." He says that for campaigns where the return can be measured, 800 percent is the goal for first-year ROL Hayes notes that this ROI represents a high number that is met about half the time. "In those instances, we know we've hit the sweet spot of how successful the campaign can be," he says, "so it's an easy decision to do it again." An ROI less than 800 percent, on the other hand, means that it could use some tweaking before being re-launched. "The important thing is to keep trying and keep doing," Hayes says. One success was a fall 2012 initiative that promoted auto loans by giving members $100 for bringing in loans they had financed at other institutions. "In most cases, members deepened some shallow relationships," Hayes says. He recalls that in one case, a member with just a $5 savings account brought over three auto loans totaling more than $67,000. All told, the promo brought in more than $1.5 million in loans. "At 70 loans, we paid $7,000 in incentives to the members, plus an additional $580 in marketing print costs (posters, flyers, handouts, etc.). With a first year yield of $62,301 and a total campaign cost of $7,580, it generated an ROI of 822 percent and break even point of just 44 days. "We rely a lot on our SEGs for growth, then we market monthly campaigns in our branches, on our website and through email," he says. "Without doing mass market advertising, even though we're community chartered, we're growing at a net rate of 2 percent a year. And that is solely focusing on our SEGs." Resources Read Web-only bonus coverage at cumanagement.org/032713focused. Attend CUES School of Strategic Marketing, Sept. 9-11 in Seattle, cues, org/sosm. Read a series of articles about SEO at cumanagement.org/0313seo. Mark Rowh is a freelance writer based in Dublin, Va. (c) 2013 Credit Union Executives Society |