Offering online service no longer a differentiator

MADISON, Wis. (3/18/05)--Credit union marketers no longer view offering online products and services as a means of differentiating themselves from competitors, but as a necessity, says a recently released study on marketing trends. The study also found that individuals who use online services are the most desirable members for credit unions.

The study's findings, based on a national survey of credit unions and a focus group of marketing executives, are detailed in "Online Marketing: Effectiveness and Impact on the Credit Union Industry." The study was distributed at a pre-conference workshop at the 12th Annual Credit Union National Association's (CUNA) Marketing & Business Development Council Conference in Palm Springs, Calif.

Marc Gagne, workshop presenter and CUNA Mutual Group's marketing campaign manager, said that online members are more desirable because they are "more profitable, have higher loan and deposit balances, respond better to marketing and cost less to serve.

"They also have more assets, higher income and better credit scores than their slightly older offline counterparts," he added.

Respondents indicated they prefer to promote their online services using offline marketing tactics, including branch staff, call centers, print newsletters and statement stuffers. "This could be part of the answer as to why some credit unions struggle to gain online members. Web sites were ranked high as a channel, yet e-mail marketing was not nearly as common," Gagne said.

Consequently, credit unions are placing as much emphasis on online marketing to retain members as to sell products. Yet, results indicated almost three-quarters of smaller credit unions did not notice a decrease in turnover among their online members. In contrast, the majority of larger credit unions report lower turnover. "This could be a result of larger credit unions having more experience offering online services and, therefore, a larger time period to evaluate the results," Gagne said.

Credit unions cited many challenges to online marketing, including:

• Raising member awareness of online products and services;
• Increasing member access to the Internet;
• Assuring privacy and security;
• Building an accurate e-mail database; and
• Devising targeted e-mail campaigns.

To meet these challenges, workshop co-presenter Paul Jaramillo, chief operations officer of DocuMatix, LLC, Salt Lake City, Utah, urged participants to learn as much as possible about phishing, including how to spot a phishing e-mail and understanding the CAN-SPAM Act.

The free online report was the result of a study commissioned by CUNA, the CUNA Technology Council, the CUNA Marketing & Business Development Council and CUNA Mutual Group. Research was conducted by the University of Wisconsin E-Business Consortium in Madison.

To read the study, use the resource link.

	Resource Link
	"Online Marketing: Effectiveness and Impact on the CU Industry"