Most credit unions and banks are trying to get younger (see all the Generation Y obsessed marketing efforts). Those marketing promotions tend to lead with auto loans as the top product. However, leading with the auto loan is not a slam dunk when it comes to reaching the Millenials.
A recent study indicates there is some good news and bad news for financial institutions regarding Generation Y and auto loans. According to the Deloitte study (Dude, Here’s My Car: Gen Y Shows Interest in Vehicle Ownership), 61% of Gen Y consumers expect to buy or lease a car within the next three years (with almost 23% expect to purchase or lease in the next 12 months).
So that’s the good. There are also some red flag concerns. The report noted that 40% of Gen. Y consumers say the salesperson at the dealership has a major or significant impact on vehicle purchase (compared to 27% of other generations). Also, 53% of Gen Y consumers feel the auto manufacturer websites have a major or significant impact on vehicle purchase (compared to 35% of other demographics).
Perhaps the most important finding (from an opportunity standpoint) was that among Gen Y consumers who do not currently own or lease a vehicle, cost seems to be the main barrier (with almost 80% saying it is because they cannot afford it).
So what do the study’s findings mean for credit unions and banks? Plenty. Consider these points:
- Make the auto loan section of your website rock for Gen. Y—We know Gen. Y is web savvy and focused. But don’t compare your website to other financial institutions. When it comes to auto and auto loans, Gen. Y is going to auto dealer sites. How does your electronic user experience stack up to them?
- Leverage your good finance deals with Gen. Y’s concerns about affordability—The number of these kids (80%) who can’t afford a loan is staggering (you’d think the fact that they are moving back in with mom & dad would give them some extra cash!). The fact is your credit union or bank has lower rates than the dealers. But don't talk about rates: translate the lower rate into actual dollars saved per month.
- Educate Gen. Y on the pitfalls of car dealerships—Are these Gen. Y kids crazy or just naïve? They are actually going to rely on the car dealer salesperson? In a polite way, your financial institution should demonstrate how we are the good guys and car dealers are well, car dealers.
- Promote car loans now—Don’t wait. Gen Y certainly isn’t (unless they’re broke). Your bank or credit union should start dripping regular auto loan marketing messages to young consumers as soon as possible. And make sure those messages are not direct mail (use texts, messages inside home banking, Gen. Y community events, etc.).
Smart financial marketers already know the importance of marketing to Gen. Y. However, the Deloitte study offers additional insights we should leverage as we build our Gen. Y campaigns.
January – the month we look forward to because our new marketing budgets take effect, and we can finally put into practice all those plans we spent so much time making last year. Are your goals set, and are you ready to go?
Marketers always have a full plate. My question to you this January is simple. Are the marketing goals and tasks you’ve set for 2014 the right ones? Sometimes we get so bogged down in making plans for our organization that we forget to look at the overall banking trends consumers are expecting from us.
Take mobile banking, for example. Does your marketing plan include a mobile strategy? A recent FICO survey found that consumers worldwide want more banking via their smartphones. In fact, they want to conduct more banking business than most smart phones today will allow. This goes beyond offering the coolest app to your members or customers. Financial institutions need to be cutting edge and offer life changing conveniences like Remote Deposit Capture – the ability for consumers to deposit checks be capturing the check image on their mobile device and sending it to their financial institution. Only a handful of financial institutions offer this right now. Imagine how yours would stand out if you were one of the few.
It would also improve your financial institution’s user experience or UX, which is another marketing task you should look at for 2014. User experience isn’t just online, mobile or digital. User experience is everything. It answers the question, “What is it like to do business with your financial institution?” The way people feel when they walk into a branch, surf the website, apply for a loan or try any number of services available to them is what defines your financial institution’s user experience. Replace teller lines with concierge stations. Make it as easy as possible to access all of your online services with a single sign on. Send birthday e-mails to members. Do whatever it takes to make consumers feel good about their relationship with you. If financial institutions don’t make people feel a certain way, they will never believe your brand promise.
The January issue of my e-newsletter contains 14 marketing tasks for 2014, complete with explanations about why they are important for financial institutions. After you read it, I invite you to add to that list by leaving a comment below.
New members and new customers. New members and new customers. We must get more (and more) new members and new customers.
Does that refrain sound familiar? At many credit unions and banks there is a rush to consumer acquisition. We need more accounts—specifically more new accounts.
While new business is certainly the lifeblood of any financial institution, it’s not the magic pill or the secret sauce to bottom line financial growth. Rather than focusing our marketing efforts on member and customer acquisition, we should emphasize deepening the product relationships we have we our current base.
Perhaps it’s time we go deep and not just wide.
I often challenge my strategic planning clients with this question, “What would happen if you did not add one new member/customer this year but got all of your existing clients to add just one more additional product or service with you?” The answer is your bottom line would increase exponentially.
Consider these factors when analyzing your current marketing strategy:
- Consumer acquisition is expensive—Current estimates range between $225 to over $250 to acquire a new member or customer. Name recognition, brand awareness campaigns, community events and traditional advertising cost big bucks. So maybe you should allocate your precious marketing dollars more wisely.
- You have a good base—If people are using your credit union or bank, there must be something about it they like. More than likely, you have a core group of people who use your products or services (but not all of them). Rather than seeking new groups, deepen your base.
- Your customers are cheating—Today’s banking consumers are not very loyal. They are cheating with Charles Schwab, cavorting with Citibank and riding the wagon with Wells Fargo. You do not have 100% of your member’s or customer’s business (wallet share). If they have a checking account with you, market auto loans. If they have a money market, pitch a mortgage refinance.
- Work your existing consumers—Every good sales person will tell you your best leads are the people who are already doing business with you. It's called “cold” calling for a reason. Trying to get new consumers to listen and learn about your products is a cold business. Working your current members and customers is much more of a warm lead.
Please note we’re not saying consumer acquisition is a negative strategy and one you should ignore. New people are the lifeblood of an organization.
However, your marketing resources are finite. You will probably experience the biggest bang for your marketing buck not by going wide but by going deep.
As your credit union or bank starts the New Year, conducing some form of marketing research is probably on your 2014 “To Do” list. Member or customer surveys. Focus groups. Demographic analysis.
Putting together an effective strategy often requires some form of the above or other research. As you develop your research plans, it’s best to keep two simple rules in place: look out and listen in.
- Look out: Examine what outsiders of your organization think about you. This includes talking with consumers who use your products and those that don’t. Ask pointed questions, such as “what you are looking for in a checking account,” “why do you choose where you do your loan business” and “why don’t we have all your financial business?” You must dive deeper into external perceptions regarding your brand. While you probably eat, live, breathe and sleep financial products and services, consumers don’t. Find out what they are thinking (or not thinking).
- Listen in: Your own employees are an excellent source of information about what is really taking place inside your bank or credit union. They often know the weaknesses and the problem spots. However, we rarely talk with employees when it comes to research. And when we do so, it is usually just “lip service” in the form of a generic employee survey. Rather than just talking with employees we must listen to them. Talk about any underlying or unspoken issues. Take their advice and implement some of their suggestions.
Research is not overly complicated. In fact, many times we get lost in too much data. While working as a senior vice president at a credit union I once received a bound member survey report about 500 pages long. It was so heavy I could use it to lift weights. It was overcomplicated and just too much.
When it comes to your next marketing research project, just look out and listen in.
In today’s overly competitive financial services industry, most credit unions and banks are “just making noise rather than making things happen.” That clever play on words is actually the subtitle to Chris Brogan’s and Julien Smith’s latest book, The Impact Equation.
Like their previous book—Trust Agents—this new one is a must read. Trust Agents made my Business Book Hall of Fame, and The Impact Equation is a great companion piece. As the authors noted, this is not a book about social media. Rather it’s about “getting a larger audience to see and act upon your ideas and learning how to build a community around that experience to take it all to an even higher level.”
Below are some of the key points Brogan and Smith make and how we can apply them.
(1) Impact = C x (R + E + A + T + E)
As the title implies, the book’s premise involves the above equation. “C” stands for “Contrast,” “R” stands for “Reach,” “E” stands for “Exposure,” “A” stands for “Articulation,” “T” stands for “Trust” and “E” stands for “Echo.”
- Application: Review your marketing to see how you are doing in each of those six key areas. They spend a chapter on each equation part and provide examples and ways for you to measure your “impact” in all sections.
(2) Romance thirty
The authors suggest that as a business goal you “romance your 30 best customers.” They suggest giving them concierge-class attention and service to them almost on a daily basis. Rather than marketing or selling to them, romance them.
- Application: Find your most profitable credit union members or bank customers. It doesn't necessarily have to be 30 (pick a number you can manage effectively). Keep in mind your “best” customers may not be your largest depositors—they probably are the ones with the most loans. Create ways to treat them special and stay in constant contact with them (without bugging them).
(3) Think of yourself as a TV station
The authors ask this poignant question, “What if your business were a TV station? You have a channel.” Just as you wouldn’t turn into a TV station to only watch ads, your marketing should not just be a continuous steam of information (ads) about your credit union or bank.
- Application: Make sure you are employing “content marketing” as a strategy. Your marketing plan should not just include ad runs, billboards and commercials. Rather your credit union or bank should send a continuous stream of financial content that truly interests consumers.
(4) “Tell it to me like I’m six years old.”
We overly complicate marketing. And we certainly say way too much in our marketing. As the authors eloquently say, “Use small words. Use many if you have to (although fewer is better).
- Application: Conduct a marketing audit for your credit union or bank. Review all your pieces (everything from your annual report to your website) and look for ways to reduce copy. More than likely, you are saying WAY too much in your communication pieces.
(5) Brevity and mobile rules
Brogan and Smith note this rising trend, “smart phones and tablet computers are outpacing laptops and desktops as the information-consumption product of choice.” People are consuming more information on smaller screens.
- Application: Make sure your website is configured for mobile (if it’s not, you are already behind). Beyond your mobile site, make sure your marketing pieces are also mobile friendly (shorter messages, e-mails, mobile messages, etc.).
Those are five points Brogan and Smith touch on that help financial institutions—there are many more that will help you learn how to increase your marketing’s impact. I’ve admired Brogan’s work for years—his blog and other content are consistently on my “must-read” list.
If you want to make sure your marketing is truly having an impact—and not just making noise—then read The Impact Equation.