Today, credit unions are required to market and bring in new members in a more sustainable fashion. One study, of the top 100 U.S. credit unions, shows that most have marketing budgets ranging from 0.07% to 0.11% of assets. In 2018, the average credit union is expected to spend about 41% of its marketing budget online; 45% may be spent by 2020. Below is an outline of challenges, variables, and solutions.
Credit unions face a unique set of challenges in the modern era. The regulatory landscape is always evolving, as is the social sphere. The desire by credit unions to attract and retain younger generation customers, combined with the fact that historical expenditures have been unsustainably high, makes their task rather difficult. One of best ways to achieve this goal is by using social media platforms like Facebook, Twitter, and blogging.
Most credit unions have allocated very little money for social media marketing. In a 2010 study of 187 credit unions 40% had an annual marketing budget greater than $500,000. Most of this was allocated for community events, print advertising, and direct mail. 50.9% had no budget allocated for social media marketing. At the time, most credit unions did not allocate more than 20% to any single category. In 2018 more than 40% of the marketing budget is used for social media/online marketing. Annual marketing budgets are projected to increase by approximately 4%. It is being recognized that digital advertising is a valuable tool for maintaining engagement with prospective and current customers. The growth of capital allocated for social media marketing is a reflection of this.
Credit unions appear slow to adapt their marketing strategies. The need to attract a more youthful membership will necessitate a more nimble approach, while moving away from traditional marketing channels, such as mail or television advertisements. Search Engine Optimization (SEO) is extremely important. Ensuring that your branch location is listed on Google Maps (with its hours of operation) is now crucial. Vital feedback, such as digital marketing performance data, is an indicator of where to point and shoot. Investments in social analytics are predicted to rise in the coming years since 70% of organizations do not gather this kind of data. Automation (eg. machine learning algorithms) can greatly enhance a credit union’s ability to collect and process meaningful data. A more nuanced understanding of preferences for particular social media hubs within demographic communities can help in the development of more effective, targeted, and personalized advertisement.
In summary, credit union social media marketing budgets are currently hovering around 41% of the average total marketing budget of 0.07% – 0.11%. This figure is expected to increase annually. A new set of marketing strategies and tactics for credit unions might serve them well.