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CU marketers shifting funds to interactive budgets
MADISON, Wis. (7/16/09)--Marketers plan to grow their interactive media budgets by shifting funds from their traditional media budgets--including direct mail and newspaper advertising, says a report from Forrester Research. Travis CU, Vacaville, Calif., has cut back on its newspaper advertising because newspaper readership is dropping, Cathy Rios, vice president of marketing, told News Now. But the credit union hasn’t reduced newspaper advertising as much as it has increased online advertising, she added. The online advertising has paid off--the credit union has generated a lot of traffic on its website, and many credit union members have joined online. Travis works to target specific groups when advertising online and posts ads on a variety of sites. The credit union continually refines its online advertising based on what generates the most hits. Credit unions’ advertisements will vary based on their fields of membership, branch locations, and members’ interests, John Ferver, Travis CU product manager, told News Now. Online advertising is effective because it allows credit unions to place ads in front of people who live in a certain geographic area or who are searching for related products, he added. Travis also engages in social marketing, through Facebook and Twitter, and offers e-mail marketing with a monthly e-newsletter. Forrester’s study also said that some marketers trimmed their budgets in 2008 in the areas of online advertising, e-mail marketing and social media spending. Although the economy has caused some credit unions to tighten their budgets, Rios and Ferver encouraged credit unions to take advantage of the economic crisis. “Spend your money wisely--it’s not the time to cut,” Rios said. Both noted that spending money on marketing is effective during a recession because many others cut back. And with many consumers dissatisfied with big banks, credit unions have a great opportunity to advertise their benefits, Rios added. When transitioning from traditional media to social media, credit unions should apply similar marketing tactics with other media to online space, she said. Although 40% of marketers Forrester surveyed indicated direct mail would be the first thing they would cut, several credit unions noted direct mail is still relevant. Travis CU said it still receives a strong response from direct mailings. “Direct mail is a strong piece of the puzzle,” added Cindy Jenkins, business development specialist for NRL FCU, Oxon Hill, Md. “It works well for us. There are no plans to cut it.” Direct mail is crucial for NRL FCU’s membership drives, Jenkins told News Now. Her credit union sends out about 12 direct mailings per year. NRL, which stands for Naval Research Lab, doesn’t engage in newspaper, television or magazine advertising. “Our field of membership is pretty specific,” Jenkins said. “It’s not cost-effective.” NRL FCU uses e-mail marketing and sends bimonthly messages about upcoming events and promotions to employee groups. Members also can sign up for e-mails from the credit union, she said. The credit union hasn’t used social media sites like Facebook or Twitter, but plans to use more podcasts in the future, Jenkins said. Sarah Cecchin, assistant vice president of marketing at Pacific Service CU, Walnut Creek, Calif., and chair-elect of the Marketing Association of Credit Unions, said direct mail is relevant to credit unions. “Direct mail is still valuable,” she told News Now. “[With it], we’re able to quantify our results. We can’t afford to cut it.” Pacific Service sends about four direct mailings per month and has become much more targeted in its mailings. For example, instead of sending the same direct mail piece to all members, Pacific Service segments direct mailings to specific groups with pieces that are tailored to their needs. Though the response may not be as large with the smaller group, the return is higher in dollars, she said. Direct mail is expensive--it costs Pacific Service about $1, including postage, for each piece. Some direct mailings can cost up to $3 a piece, Cecchin said. For credit unions that need to cut their direct mail budgets, Cecchin advised to better target the mailings and make them more intelligent. Pacific Service sends out letters that speak specifically to the members who receive them, with information the credit union has about their current products and services. For instance, if the credit union knows a member has an auto loan with another institution, the credit union could send the member a letter with information about refinancing the loan. Although Forrester Research’s survey results indicate that markets may shift toward more interactive media, Cecchin said what credit unions use to market in the future will depend on what’s quantifiable. Credit unions will ask, “How are we able to best spend our money?” she said.
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