Even though it’s not my core competency, I’ve always had a strong interest in the area of marketing. As both a business owner — and on behalf of the clients’ we serve — I find the art and science of marketing to be simultaneously important and occasionally inane. It is absolutely imperative, yet often challenging, to quantify.
Suffice to say, every industry has a leader and, from a size standpoint, the leader in the credit union industry is Navy Federal. And their focus on marketing is a key reason why.
A recent American Banker article provides some context for how big the nearly $170 billion institution is compared to the CU industry-at-large. Referring to the recent signing of its 13 millionth member, the article states … “To put that in perspective, the next five largest credit unions in the country by assets had less than 9.5 million members combined at the end of the first quarter.”
There are an array of reasons for Navy Federal’s Credit Union’s size, chief among them being a large legacy membership that serves every one of the U.S. armed forces. But rather than simply rely on organic growth, Navy Federal is also a savvy and aggressive marketer.
Consistent and Compelling
Carrie Foran Sepulveda, vice president of membership for Navy Federal says its membership growth is fueled by several factors.
“We research where our members are, what events they participate in and what media they consume,” she stated. “This way, we can reach them with our brand messaging on the right channels at the right time.”
And at an estimated $200 million annual budget – more than the total deposits of many credit unions – invest in marketing, they do.
So yes, while having the resources to out-spend the competition is certainly an asset, having deep marketing pockets isn’t the only key to their dominance. What’s important for Navy Federal – and every credit union — is understanding the message the credit union is providing, how to best reach the target audience, and how to maximize your marketing dollars in the process.
Some time ago, a seasoned marketing colleague explained to me that the optimal marketing continuum includes “five foundations,” that connect to each other like links in a chain:
#1: Awareness – This is the low hanging fruit but also usually the most expensive. This is what paid advertising is primarily meant to do. i.e., Get your name out there, explain what you offer and, hopefully, why your prospects should care.
#2: Interest – It’s one thing to generate brand awareness but another to bridge the gap to sparking actual interest. In short, your message needs to be relevant and compelling to your target audience.
#3: Trial – If your message resonates, this is where you’ll begin to see actual returns on your marketing investment. Trial is proof that your target audience was aware of you, interested, and willing to give you a try.
#4: Loyalty – So your prospect tries you by, say, taking out an auto loan. Then they transfer deposits to you. Then they turn to you for a mortgage followed by a business loan. This is loyalty-in-action and where your marketing efforts merge with your administration and operations.
#5: Evangelism – This is where your loyal customer begins recommending you to their friends and colleagues who then also turn to you for loans, saving and investment programs. Evangelism is the “holy grail” of marketing and one that Navy Federal has certainly achieved.
Recommendations for Smaller Budgets
Now, even without the benefit of Navy Federal’s marketing budget, you still have the opportunity to grow your brand by making sure your marketing dollars are being applied in the most effective ways.
Gut reactions and finger-in-the-wind strategies are risky, especially for credit unions with small budgets. So, my first recommendation is to always begin with market research. When done correctly, research is irrefutable and will ensure that your dollars are properly spent with measurable results. Invest in research and strategy before spending a dime on creative development and ad buys. (Marketing sidebar: Rubicon can assist you here).
Second, based on your research findings, consider passing on the temptation to buy paid advertising. Instead, apply your marketing budget to public relations activities that may generate newsworthy interest including fundraising events that connect with your community. Another strategy is to leverage the cost-effective reach of sponsorships with public radio, cultural programs (i.e., museums and performance venues), and not-for-profit athletic and/or academic organizations. An added bonus of these marketing channels is that they are very effective in reaching low-to-moderate income individuals accomplishing a goal held by many of our clients of serving the underserved.
Even for well-funded leaders like Navy Federal, marketing can be hard to measure. So, as you assess your future strategies, be sure to ask yourself if your efforts are focused on your ideal future membership and if they are likely to achieve awareness, interest, trial, loyalty and – ideally – evangelism all along the way.
Corey A. Waite is a leading commercial real estate advisor to the financial services industry. As Founder and CEO of Rubicon Concierge Real Estate Services, Corey works directly with senior executives coast-to-coast to deliver strategic plans and transactional services focused on optimizing the needs of employees, clients and members.
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