A Rising Tide Lifts All Boats...EXCEPT The Ones That Aren't in the Water

by Ron Daly

It's been a few months since the collapse of Lehman Bros. and Fannie/Freddie, but the hole gets a little deeper every day. For Credit Unions, it's been the good and bad. But looking backward doesn't work - it's time to be forward thinking and to do what most CU marketers have been TALKING about doing for years now: Tell people who aren't members that the credit union is THE place to plan their financial future. There is, in fact, a difference between credit unions and banks. And between CUs and other CUs.

This article from the Ecommerce Journal talks about that difference and I think it sums up all the little nuances. Because I know (and you, fellow Soap-sketeer, know) that the credit union is more than just money changing hands. And what's more, your credit union is likely catering to a specific demographic. As friend-of-blog Jeffry Pilcher said in his most recent post: 

It’s not about the member-owned, not-for-profit stuff you hear all the time. It’s not that this stuff isn’t important. It’s just that these messages don’t differentiate one credit union from another; they only define the differences between all credit unions (as an industry) and other types of financial institutions. Also, these principles don’t drive business for a significant portion of the population. People appreciate the principles as a benefit, but rates, fees and service are way bigger priorities.

Whether on a micro level ("C Credit Union" and "B Credit Union" are different) or a macro level ("C Credit Union" is different from any bank around), marketing is crucial right now. Actually, marketing was crucial a whole year ago, when DigitalMailer published "Is the 'R' word at hand? Time to boost marketing". Point is, cutting your marketing back in a recession is a bad idea. It won't help you keep your head above water and it won't make you stand out when the economy goes back to the "bulls". 

This point is reinforced by Geoff Ramsey of eMarketer in his recent article, "Why now is not a good time to slash your market research budget". The article contains an interesting set of graphs about where spending is going among businesses, with a 70+% upswing in word-of-mouth, search and mobile marketing. Decreases are minimal, but the heaviest loses are in display advertising and market research. Ramsey's right when he says that knowing less about spending habits and your member base is NOT an advantage. Learn more and do more now. 

A segment of DigitalMailer's recent article: 

Recession marketing works! Marketing sage Seth Godin sees recession marketing as the "opportunity of a lifetime," partly because the field is less crowded, but also because consumers have product and service needs even when money's tight. They're just more selective and value-driven in their approach to shopping. 

Multiple studies show that companies that keep their messages and brands in the public's eye during a recession often come through hard times much better than those that don't. One such study, by MarketSense, proved the point with the 1989-91 recession: Brands such as Jif Peanut Butter and Kraft Salad Dressing increased advertising, and saw sales grow 57 percent and 70 percent, respectively. Pizza Hut and Taco Bell stepped up promotion, increasing sales by 61 percent and 40 percent. But McDonald's, which took the opposite approach, had a 28 percent decline in sales over the same period.

A rising tide lifts all boats. When things do turn around, do you want to be the boat that weathered the storm and came out stronger and more profitable? The one that wasn't afraid to spend the money necessary for success? The one that people will want to be sailing? 

Or will you be stuck in dry-dock, not going anywhere at all? 

Comments

[Denise Wymore]

Ron,

I couldn't agree more. Banks are doing an excellent job every single day advertising the difference between us and them - we need to capitalize on that!

But as Jeffry Pilcher has said, and I agree, we have to do it in a different way.

We need to get our members to market FOR us again.

Every time we "wow" a member, either by working with them when they fall behind, making an exception on our loan policy, or just make the errand pleasant, we are building a marketing force.

Our focus needs to be back on People Serving People and we'll leapfrog over the competition while they sort out their computer systems and letterhead and staffing nightmares.