defying the trends: grow in 2010
DESCRIPTION
Webinar for Credit Union Professionals. Successful case studies for marketing campaigns recruiting new members, on-line banking customers, car and home equity loans, and gen y membersTRANSCRIPT
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PRESENTED BY:
DEFY THE TRENDS
A Webinar for Credit Union Professionals
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Today’s Speakers
Kate Dunn– President, Digital Innovations Group– Business Strategy Chair, PODi Apps Forum 2008 - 2010– Board Member Digital Imaging Customer Exchange– Faculty, University of Richmond Robins School of Business,
Executive Education Review
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General Marketing Challenges• Communication clutter
– Typical American is exposed to 5,000 marketing messages a day• notice 52• remember only 4
• Four or five generations in play– Varied levels of comfort and cynicism with technology,
advertising• Voluminous amount of information• Personal and professional duty overload• Loss of personal wealth/employment• Anxious and fearful of future
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The Impact
• Clutter increases marketing expenses• Mixing the mark increases marketing
expenses• Ultimate implication is failure of the
organization– YTD Decline in number of Credit Unions of 110– On pace for 252 closings in 2009
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Sacrificing the Long Term for the Short Term
• Only 15% of short term sales are the result of marketing, but today’s marketing initiatives are responsible for 85% of long term sales.
Source: What Sticks: Why Most Advertising Fails and How to Guarantee Yours Succeeds, by Rex Briggs, Greg Stuart
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Really Good News
• “19% of advertising fails outright and 67% could achieve significant improvement that would require no additional spending.”
• What to tweak:– Messaging – better understanding of customer’s motivations– Marketing Mix – VeriSign found that 10% of spend drove
98% of actions they wanted– Qualification - 80% of all deals are lost due to a in adequate
or non-existent qualification process.ES Research Group Study
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Credit Union Challenges
• Annual loan growth fell to 3.5% through July 2009; will remain sluggish
• Increased cost to recruit net, new members– As of 2008 the amount stood at $467– Increasing rapidly for those with community
charters – Failure to grow relationships following ‘best rate’
offers increases marketing costs– Minimal differentiation in eyes of potential
members
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Marketing budgets have been reduced: Added cost of regulation NCUA assessment Corporate credit union bailout
Bad PR, marginalizes the differentiation
Defying the Trends & Seizing the Opportunity
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The marketplace has delivered us opportunity
Big Banks continue to shoot themselves in the foot
But there are typically less resources to seize the opportunity
PeopleMarketing budgetHarder task to reach out
Today’s Credit Union Trends
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Finding New Members: Where to find them? Knowing what to say Expanding the relationship
Difficulty lies in your charterSEG more difficult than communityNew technologies can help Customized URL for Information“CURL”
Today’s Credit Union Trends
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Where do I get the most bang for my buck? Low hanging fruit
40% of credit union members classify themselves only as “moderately loyal”
Specifically target most likely candidates Ability to be “granular” evolves once your are in a conversation Significantly reduces production cost Greatest chance to maximize R.O.I.
Charter Matters
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What do I sell first?Does it vary by segment?Can I reduce my cross selling expenses?Can I reduce customer attrition?
Expanding the Relationship
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What can you tell them that will work? Very similar value propositions
Share profits – Treat you like an owner Safe, Sound & Secure
Opportunity lies in understanding the needs of EACH member
WIIFM - Specifically
Messaging
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Should social media be integrated into the mix to improve resultsHow can social media be integrated
Big Question
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In Short
• Must capture the loan opportunity that exists today– Cost effectively– Efficiently
• Prioritize your opportunities– Existing members – cross selling– Family members – grow membership
• Focus on member loyalty will pay off– Strengthen relationships with on-line banking, broader product
participation, loyalty and referral initiatives• Improve resource utilization with automation, tracking and
decision support• Improve marketing ROI
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Best Practices in Direct Marketing for Credit Unions
Replicating Success
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Case One: Wallingford Municipal Federal Credit Union
• Business Problem– Low response and conversion rates on new loan
offers from statement stuffers and traditional generalized direct mail
• Solution– Personalized direct mail campaign to existing
members promoting car loans with attractive rates
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Targeted, Simple Personalization with Succinct Messaging
First NamePersonalization
Best Practice: Simple offer and call to action “Save Money” & “Get Pre-Approved First!”
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Results
• Achieved highest monthly loan activity in history of the credit union
• Exceeded annual loan target after only four months using the program
• Extended program to other initiatives
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Case Two: On-Line Banking
• Business Problem– Low on-line banking participation increased
cross selling costs and contributed to member attrition
• Solution– Use best practices developed in loan campaign
to convert members to on-line banking
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Targeted, Simple Personalization and Succinct Messaging
First Name Personalization
Best Practice: Simple offer and call to action “free On-Line Service” & “Call for an application”
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Results
• 17% of membership signed up for on-line banking within six weeks– Cut back on need for multiple mailings
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Effective TargetingCustom personalization using gender, age or other demographic informationConsider appending data if required
Compelling Imagery and TextKeep it Simple
Zero in on WIIFMClear Call to Action
Best Practices
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Case Two: SEG Member Acquisition
Customized URLs
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Why Landing Pages
• Directs respondent to specific content– Relevant fosters relationship– Streamlines response process
• Interactive– Gain information to improve analytics and
nurture the sale• Trackable – provides valuable
information for decision making
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Why Direct Mail WorksREASON TOTAL
ADULTSTiming of the piece arriving coinciding with need for the service/product 67%
Consumer's name on the front of the envelope 66%
The package looks interesting 60%
A special offer or discount 54%The package looks important 52%
Feel something in the package 51%A free gift or token inside 42%Dated material enclosed 35%None of these 5%
Add more cost impacting ROI
Source: Vertis Communications' Customer Focus® survey
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Relevant
Personalized
Over 3x higher
It’s the Relevance that Counts• Relevance is the single largest lever on response in
individualized direct marketing Jupiter research reports:• Relevancy improves campaign revenues by 9 times
over untargeted broadcast mailings• Revenues are improved by an average of 18 times
with relevance
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2007 Vertis Communications Customer Focus®
• 85 percent of women ages 25-44 read printed direct mail marketing pieces
• 53 percent of all women ages 25-44 surveyed who have access to e-mail, read e-mail advertisements
• 63 percent of all adults indicated the have responded to direct mail collateral offering a percentage discount
Women make more than 80% of all consumer purchasing decisions
Source: Source: Mindshare/Ogilvy & Mather
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Case Three: Alerus Financial • Business Problem– Declining credit consolidation loan applications– Low return from static mailings
• Solution– Test the use of a personalized and relevant
cross channel campaign against static mailings• Age Groups:
– 25 – 35– 36 – 45– 46 - 55
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Step One: Direct Mail
Multiple Channels: Direct Mail, Email and Personalized Landing Pages
Personalized
Relevant Copy & Images for each age group
Provides Tracking
Personalized Response Mechanism
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Relevance continuedMessaging Real Estate Expanded
Minimizing cost of mailing
Interactive conversation with prospectQuestions capture additional information
Thank you structure used to nurture interest
Step Two: Personalized Landing Page
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3.67% responded to multi-channel version of campaign
60% of applicants were new to the institution
Response Rates by segment for multi-channel25 – 35 3.98%36 – 45 3.23%46 – 55 2.64%
Response rate from static mailer < 1%
Results
Highest ROI
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The Power of Multiple Channels
• Researchers estimate that 25%-30% of total media time is spent multitasking, and that the more media a person consumes, the more likely they will consume several channels at once
• Seeing a message in more than two channels increases response by 10% to 15%.
Sources: eMarketer Multi-tasking Consumers January 2007; DMA Study
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Why Personalized Landing Pages?
• 46% of Americans prefer to respond to direct mail on-line.
• PURLs:– increase response by up to 400%– provide automated response tracking– provide interactive communication with prospect– automate integration with sales channels
• Campaign changes are affordable• Electronic messaging real estate is cheaper than
print.Source: DMA Study
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Why Email as a Channel
• Links included in emails facilitate response
• 50% of those receiving permission based e-mail say they are more likely to buy products from the sender in the future regardless of the channel
Source: Jupiter Research and Indivia, Epsilon
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Why Social Media?
• 1/3 of all American have profiles on social networking sites• The average LinkedIn user is 40 years old• Most Twitter users are now 35 and older• People from 35 to 54 now represent the biggest group of
users on Facebook.• LinkedIn - business-only has 43 million members in more
than 200 countries
Sources: LinkedIn: Connecting with Success and Timothy J. Wood, Montgomery County Group Leader of Business Development atOBA Bank, contributed to this article
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Why Social Media?
• US Population– 18% create content– 25% critique content– 12% collect information posted by others– 25% join on-line communities– 48% are considered spectators– 44% are currently inactive
Source: Groundswell by Charlene Li and Josh Bernoff
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The Future of Social Networking• People from 35 to 54 now represent the
biggest group of users on Facebook– 99% of Gen Y have one or more active profiles
on social networks such as Facebook or MySpace
Source: strategy Labs; PMN together with the Interactive and Direct Marketing lab at Pace University’s Lubin School of Business, May
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Case Four: Tinker Federal Credit Union• Business Problem– Low enrollment of Gen Y customers
• Business Solution– Created a multi-channel campaign “Buck the
Norm” as a rallying cry for young people to get over what everyone else was doing and to get smart with their money.
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Solution Components
• New web site relevant to Gen Y audience• Video Scholarship Contest for Engagement• Ringtone, Wallpaper, Buddy Icon downloads• TV and Direct Mail Marketing• Reinforce with social media using Facebook, IM, Twitter,
online voting, local bands music players, and contests• “Save the Buck” promotional cards given out at college
hangouts and coffee shops that would cover their bill• Attendance in community events geared toward young
adults
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Multiple Channels: Direct Mail, Web Site, TV, Video, Social Media
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Results
• 35,000 web site visitors• Average of almost 4 pages viewed per visit• ‘Buck the Norm’ video on YouTube viewed
by almost 1,500 people• Facebook event page for the scholarship
contest visited over 3,000 times
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Traditional Sales Funnel
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Why Social Media?
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Case Five: 5,000 Member Credit Union in Northeastern US
• Business Problem– Statements which were labor intensive,
inflexible, and prone to quality errors– Call center activity disproportionately high due
to errors and the confusing statement• Business Solution– Redesign of statement with highlight color to
improve readability and incorporate cross channel tracking in promotional messaging
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Solution Components
• Highlight color statement• Targeted promotional messaging based on
member’s existing relationship• Reinforcement from social media using
blogs, facebook page and tweets
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Results
• 30% of customer base converted to electronic statements saving the credit union $30 per member– Approximately $45,000 per year initially
• 18% of members are following credit union’s tweets– Estimated reduction in other marketing
expenses of $30,000 per year
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Review
• New technologies exist to improve the efficiency and effectiveness of marketing efforts
• 67% of what you are currently spending could generate better results by modifying the tactics
• 19% of what you do fails outright• Opportunity exists to capture opportunity
without increasing spend
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Combine direct mail or statements with targeted messaging relevant to the memberReinforce direct or statement marketing with email
Use links to relevant services to track changes in behavior
Reinforce strategy and social media presenceEncourage members to share reasons for their satisfaction turning them into ‘promoters’
Email and landing page tracking allows you to capture and integrate best practices quickly for maximum ROI
Review
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Review your current member data% of emails and current baseline deliverability statistics
OpensBounces (hard and soft)Click ThroughsDevelop a fun way to capture emails from members
Determine best segments given current economic climateStart thinking about right social media to use
CommunityBlogEtc.Read Groundswell by Charlene Li and Josh Bernoff
First Steps
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Immediately following the webinar you will receive an email so you can download a copy of today’s presentation and a white paper called Beating the Odds: Credit Union Marketing
Questions?