Communicate Safety and Optimism

CU360
November 20, 2009 | COMMENTS

In troubled times, community-based financial institutions are advised not to leave a recession with the same products and same message they had when they entered it.

Whether in a slump or in a recovery, credit unions can either strengthen or weaken their position depending on how they use their marketing budget to influence market behavior.

With ongoing reports of bank failures and Wall Street bankruptcies, consumers remain critical as they search for value. Members and potential members make a major decision when they choose where to do their financial business, and they want to feel comfortable about that decision—especially in a time of turmoil.

Currently, there are two main messages likely to have the greatest influence on potential members:

• They want to hear that their financial institution is strong and safe. If they're left with doubt, then nothing else matters. And, they're not going to search reports from a federal regulator to gauge the strength of an institution. Expect members and the public to continue asking one question: “Is your institution safe?” Train staff to answer that question well.
• Consumers also want to hear optimism from their financial institution. Repeat to members and potential members know that it's business as usual at your credit union, and make it clear that you're ready to help.

Separate marketing fact from fiction

One of the most important aspects of shaping marketing plans is knowing if you're working with fact or fiction. Research shows, for example, that 70% of bank customers don't want to change institutions. Credit unions may pride themselves on service and friendliness, but check out most other institutions—staff is likely to be equally earnest and helpful. Friendliness is no longer a differentiator.

To determine key points in your marketing plan, consider these research techniques:

• Staff survey. Typically, employees receive a questionnaire that asks marketing-oriented questions such as: “What do you believe are our two greatest competitive strengths?” “Where are we weak?” or “How do you believe we compare to other financial institutions?” Answers can be aggregated to make peer comparisons, and the results can help focus efforts where needs are greatest.
• Member surveys. These basically ask, “How are we doing?” Questions are structured so all credit union functions are measured. When repeated each quarter, management can track changes. Much of the feedback can be gathered online.
• Focus groups. They're a relatively low-cost option to test marketing plans and promotional ideas. Bring together perhaps 10 members, selected randomly. In just 90 minutes you'll get important information and guidance.
• Telephone surveys. These may mean phone interviews with 250 to 300 people, all selected at random. Usually the first question is “Which financial institution would you most likely recommend to a new neighbor?” Another question is, “Which financial institution do you consider to be your primary one?” Insight comes from comparing who they'd recommend to who they actually say is their primary financial institution.

Allocate a portion of your marketing budget for research and product development. As the recession eases, growth opportunities are available to institutions that show energy, positive thinking, and strength. Marketing plays a key role in this.